How Globalization Strengthens Silicon Valley

There was an interesting article this weekend on the San Jose Mercury News. It said that in spite of the globalization and the rise of tech hubs in countries like Israel, China and India, there is no immediate threat to Silicon Valley’s economy and it remains strong as the heart of innovation and industry.

Various reasons: from Social Networks headquartered in the Bay Area that conquers audiences worldwide to companies such as HP and Cisco soaring from the expansion of global markets.

In a recent statement, HP highlighted how revenue from the BRIC countries - Brazil, Russia, India and China - had increased 37% percent compared with the same quarter in 2006. And Cisco reported 45% year-over-year growth in emerging markets.

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If on one hand businesses that are started in the valley expand throughout the world, on the other hand the valley also attracts the world to itself. Silicon Valley draws highly skilled professionals from different parts of the globe: according to the same article, 55% of its science and engineering professionals were born abroad.

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Still on foreign born executives, here’s a must read. It is called “They Made It”. It’s a compilation of interviews with some of the top Silicon Valley executives born in France, Israel and India (among many other countries) . You can pre-order you book here.

The Chinese Challenge

BRIC is an economical term used to refer to the combination of 4 emerging countries/ markets: Brazil, Russia, India, and China. By the year 2050 it is estimated that BRIC economies will most likely eclipse some of the wealthiest economies in the world. China is the world's fourth largest economy and one of the major and most interesting challenges they are currently facing is how to transition to capitalism and maintain the peasantry, a pillar in their economic growth.

One of the first tasks I was given as a consultant for a large company that wanted to establish a presence in China was to create a manual of idiosyncrasies for this country including the dos and don’ts. Same as a handshake in the US, in China, part of the business etiquette is exchanging business cards. When someone receives a business card, he must hold it with both hands and pay close attention while reading it.

However, when doing business internationally, common sense plays a very important role: if you are not acquainted with the local etiquette, just treat others with respect and think how you would like to be treated.

Deconstructing South America

Sometimes a mistake turns out to be acceptable and logical, if we look at it in a certain way. Last week I heard someone mention that he did business in several countries including Japan and Europe. Needless to say, Europe is not a country. However, if we think of Europe as an acronym for all the countries of the European Union that share a common flag and currency we can understand where he was coming from.

Interestingly enough, this is reminiscent of how South America is mostly regarded as: a number of resembling countries that share the same language, except for Brazil. However, in this case, it would be a stretch.

The truth is different than what most people think. The majority of South American population speaks Portuguese, not Spanish. By the way, South American official languages comprise Portuguese, Spanish, English, Dutch and French.

Brazil alone is the 5th largest country in the world (if we do not count Hawaii and Alaska as parts of the United States). So if, on the other hand, someone says that a country like Brazil is a continent, that would probably sound more acceptable as a figure of speech.

The Butterfly Effect in Global Branding

The premise of global branding is that you need to regionalize your strategy in order to successfully establish you brand in a foreign country. Of course we are not only talking about translating your marketing collateral.

For instance, you can have local decision makers or celebrities to corroborate what you want to say. You can also use focus groups to better understand how the colors of your logo convey different messages in certain parts of the world. While a person dressed in white is most likely to be related to a doctor in western cultures, the same does not apply to Japan, where wearing white is a sign of mourn.

However, sometimes regionalizing strategies is not enough. In a global economy, we must bear in mind the butterfly effect.

In a nutshell (and don’t be intimidated by this) the butterfly effect is a basic technical condition for the chaos theory. Let’s go to the part that matters to us: The butterfly effect got notoriety with the sentence "the flap of a butterfly’s wings in Brazil can set off a tornado in Texas".

What the butterfly effect teaches us is that although we may be ready for implementing a strategy regionally, we must take into account the complexity of relationships amongst these countries and its neighbors, trading partners and groups, amongst others.

Let’s be honest: working on a global economy is complex. Although our job as communicators is to simplify, we will run out of breath and resources if we try homogenize the world and accommodate simplistic needs. We will only be able to work synergistically if we pay close attention to each region's idiosyncrasies and its global relationships.