Business and Culture: Transatlantic Business Leaders Offer Advice, Wearing High Heels

Five business leaders walked onto the stage of the Texas-EU Summit to talk about managing transatlantic businesses. Two run European units based in the United States; two developed European units of U.S. practices; and one has done it all. Four wore stilettos.They didn’t have much time, and they had something to say. Not one wanted to be called out for her gender, and not one considered that remarkable.

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(L to R) Ana-Barbara Llorente, partner, Pendas International, moderator; Belen Marcos, president, Cintra US; Cristina Silingardi, Austin managing director, VCFO; Sharon Schweitzer, founder and principal, Access to Culture; and Liz Wiley, partner, Grable Martin Fulton PLLC and honorary consul of France

The hardest thing: Finding and keeping talent

Without question, the biggest challenge confronting a European company in the United States is finding and retaining talent. “Americans’ resumes look great, but you have to train them,” said Belen Marcos, president of Cintra US, one of the world’s largest private developers of infrastructure. Marcos, an engineer by training, noted that in Europe educational credentials are paramount. Americans job-hop more than European hires. They tend to specialize and resist working in areas outside their specialty.

“Europeans are generalists. They expect to do many different jobs.”

Belen Marcos, president, Cintra US

Navigating European statutory regulations

Disruptive business models challenge both business and cultural norms. Consider the vacation rentals that have turned many traditional neighborhoods into latchkey hotels. Cristina Silingardi, a Brazilian with deep finance experience, helped Austin-based HomeAway successfully navigate the sticky process of integrating acquisitions in both Spain and Brazil.

“Understand the statutory regulations before you do business … It went off without a hitch.”

Cristina Silingardi, Austin managing director, VCFO

“Contracts are part of the law in Europe,” said Liz Wiley, an attorney and partner, Grable Martin Fulton PLLC. who specializes in intellectual property.

“Very little if anything can be negotiated (in Europe). Expect negotiations to take much longer.”

Belen Marcos, president, Cintra US

Marcos knows a thing or two about the subject. Her company Cintra is part of the Spanish infrastructure provider Ferrovial. She and her team negotiate the construction and long-term management of roads, airports and concessions, many of which are public-private partnerships.

Belen Marcos (holding microphone), president of Cintra US, negotiates infrastructure contracts in Europe and the U.S.: “It takes longer in Europe because of statutory regulations.”

Codes vs. negotiation. Consider privacy.

Europe is not a monolith. Both EU and country-specific regulations come into play when determining who owns what. For example, “the EU has the General Data Protection Regulation (GDPR), but France has its own data protection authority, the CNIL, which handles GDPR complains and defends the French position with GDPR-related issues,” said Wiley

“The United States is not a code country,” commented Wiley, “We make our own deals.”

Liz Wiley, partner, Grable Martin Fulton PLLC

Wiley, whose practice includes both French and American startups, recommends first filing for U.S. patent protection, then filing in other countries to ward off infringements.

Soft skills matter

“When in doubt, err on the side of formality,” advises Wiley. And in the hurley-burley world of entrepreneurs, she recommends oral presentation training for cautious French startups that compete in the winner-take-all American pitch culture.

Sharon Schweitzer’s company, Access to Culture, cross trains business people to be effective in other cultures. Recounting an incident where two older Czechs silenced their giggling younger colleagues with a steely glare, Schweitzer said the significance of a seemingly minor incident caught her by surprise.

Sharon Schweitzer (holding microphone), founder of Access to Culture, majors on the soft skills matter.

But do high heels also matter?

The specter of political change is everywhere. Here too, dress is brand. This year’s Yellow Vest protests revealed the deep divide between France’s privileged class and rest of their country. As I’m writing this, on the other side of the world, young people in Hong Kong wear black and mourn a man in a yellow raincoat.

Remember Mark Zuckerberg’s testifying before Congress, stripped of his signature t-shirt and uncomfortable in a blue suit? Melania Trump in a white pussy-bow blouse and sky-high heels? Dress is political, and high heels stand unrivaled as a symbol of gender and power. Flip flops may reign in U.S. youth and tech enclaves, but search “business women” and you’ll find women in power in wearing heels — because they choose to.

In another culture where talent and a diverse work force weigh heavily on its future competitiveness, Japanese women unsuccessfully petitioned their government to ban gender-based dress codes (#KuToo), and specifically high heels. My guess is there’s another shoe to drop there.

In 1869, men in the Wyoming Territory needed wives. Politicians in Washington needed more voters in the Western territories. So Wyoming gave women the vote. John Morris wrote to a national magazine promoting women’s suffrage:

It is a fact that all great reforms take place, not where they are most needed, but in places where opposition is weakest; and then they spread.

John Morris, following the Wyoming Territory’s decision to give women the vote

“To be sustainable, change takes time,” Wiley noted. Would this panel have happened 30 years ago? 20? Maybe.

With that thought, I’m pulling out my high heels to wear sometime soon.

Hats off to Ana-Barbara Llorente and Pendas International, for sponsoring the panel, and the World Affairs Council of Austin for hosting.

Austin, Texas: A Case Study in Managing Competitive Crises

Three things are clear about the future: technology will determine competitiveness; talent comes in all colors, nationalities and genders; and the problems are too big, too complex to solve in isolation.

The annual CULCON Symposium on U.S.-Japan Collaboration was held in Austin last week, the site where 30 years ago a rallying cry of “make America great again,” created SEMATECH, now a model of how government, industry and academic institutions can work together to manage competitive crises.

Today Japan, nestled precariously between North Korea and China, is doing something similar, boosting its competitiveness in science and technology by expanding university-industry partnerships and building a more inclusive work force.

Who owns the future? The electromagnetic spectrum and 5G

Bursts of “make Japan great again” thinking punctuated the session. In what was apparently a last minute change to his presentation, cybersecurity expert Dr. Motohiro Tsuchiya, pointed out that the United States owns Japan’s electromagnetic spectrum, the highway for next-generation 5G mobile technology, the internet of things (IoT), as well as x-rays, gamma rays and radio waves.

The electromagnetic spectrum hosts 5G technology, which will improve the reliability and reach of mobile internet communication. Illustration/ Children’s Health Defense

Thirty years ago, who would have thought something called the “electromagnetic spectrum” would become so essential to a single country’s competitiveness? But 5G technology has vast implications for not just cellphone upgrades, but but for medicine, business and national security. Case in point: Russia recently signed an agreement to allow Huawei, a lightening rod in the U.S.-China trade war, to develop the country’s next-generation wireless network, but since the Russian military owns their electromagnetic spectrum, there could be blips in its implementation.

This world and then the next

Dr. Takashi Tanaka, an expert in machine learning at the University of Texas and like the other panelists a product of international collaboration, pointed out that rocket technology can also be applied to missiles, a critical capability for an island nation with testy neighbors.

Space technology extends scientific inquiry to national security. Illustration/Nikkei-Asian Review

Proprietary rights in space? Dr. Moriba Jah, an expert on Space Domain Awareness, brought up the ever-controversial Elon Musk’s launch of 60 Starlink satellites into the crowded night sky, the first of a proposed fleet of 12,000 designated to provide global internet coverage.

Funding and talent

Innovation is all about funding and talent, which implies a partnership between the public and private sectors. The U.S. Department of Defense’s Defense Advanced Research Projects Agency (DARPA) provided the seed money for SEMATECH. The National Science Foundation funds emerging sectors like artificial intelligence where American leadership is increasingly challenged. Japan, a global leader in robotics, is stepping up its investment in other sectors as well.

“Last year (2018), the Council for Science, Technology and Innovation, the government’s science advisory body, announced a 7% rise in spending on science and technology (to 3.84 trillion yen), after years of stagnant funding. The government is considering another 100 billion yen for the upcoming fiscal year to pay for exploratory research aimed at achieving what The Mainichi newspaper calls “moonshot” results. The government is on track to hit a goal of spending 1% of GDP on science and technology in higher education by 2020.”

David Swinbanks, Nature, Nature 567, S9-S11 (2019)

Talent is increasingly collaborative. The CULCON panelists referenced cultural barriers in Japanese universities that inhibit the collaboration, from silo-ed departments to paying research assistants. But then again, perhaps the group’s of Austin as a meeting site was significant. The city is a case history in how a single successful experiment in public-private collaboration, SEMATECH, spawned a vital tech hub that continues to attract jobs and talent.

Stumbling from failure to failure with no loss of enthusiasm

I shared Churchill’s quote with my seatmate, Mr. Naoyuki Agawa, who asked a bedrock question of Austin’s assistant city manager, Ray Arellano: What do you say to people who have failed? Mr. Agawa teaches American constitutional law at Doshisha University in Kyoto, following a long career practicing law in New York and Washington and a stint as Japan’s Minister for Public Affairs.

His point was well taken. Without role models, without examples, without encouragement and social and financial support, failure is a hopeless quagmire.

I said I could do it, and I did it

Mykaela Dunn, Brooke Owns Fellow, University of Texas at Austin. Photo/The Daily Texan

Eureka! Beamed into the panel discussion on space technology was a Texas success story. Mykaela Dunn, a native of tiny Stafford, Texas and a recent aerospace engineering graduate from the University of Texas, has just started her internship in the California-based Stealth Space Company, courtesy of a Brooke Owens fellowship. Dunn encouraged the audience to consider more than grade point averages (GPAs) in evaluating talent, mentioning that she had to remind herself to do the same.

Well done, Mykaela!

Do Tariffs Make Us More Competitive?

David Firestein dropped by last week’s “World Spins” session to reassure us that at about $1 trillion, give or take a few million, the U.S.-China trade relationship is too big to fail. But he had some thoughts on where we’re taking it.

Firestein‘s credentials in U.S.-China relations are wide and deep — the State Department, EastWest Institute, and now, president and CEO of the George H.W. Bush Foundation for U.S.-China Relations — in addition to his role in academia launching the LBJ School of Public Affairs’ China Public Policy Center.

Perceptions of growing authoritarianism

“China’s rising authoritarianism colors U.S. views in a profound way.”

David Firestein

The Uighur minority and the telecom giant Huawei are the poster children of American perceptions of China, prompting national security concerns that have underpinned both the administration’s trade narrative and domestic regulatory actions. On the heels of watching China use facial recognition software to persecute the Uighur and other Muslim minorities, San Francisco banned the technology. Last week those same concerns spread to Washington, bubbling up at the House Committee on Oversight and Reform.

Blacklisted by the administration, Huawei typifies China’s state-supported hybrid economy. The telecom giant sits on a deepening Maginot Line between the Internet of the East and that of the West, drawing a line between American interests and increasingly, everyone else’s.

“In public and private statements, American intelligence officials and telecommunications executives and experts have begun to concede that the United Sates will be operating in a world where Huawei and other Chinese telecom companies most likely control 40 percent to 60 percent of the networks over which business, diplomats, spies and citizens do business.”

David Sanger, The New York Times

There’s a silver lining for Big Tech. Nothing unites like a common enemy, and China has provided Qualcomm, Facebook, Google et. al. with a new “America First” narrative to relieve regulatory threats.

The missing quid pro quo

“China is vastly more closed to us than we are to them,” Firestein said. “When someone from China gets off a plane in San Francisco, they have immediate access to their email through WhatsApp. But an American landing in Beijing can’t access their Gmail.”

David Firestein

For an administration determined to deliver on its “America First” campaign promises, protecting America from China is a top priority. Vice President Mike Pence’s watermark speech at the Hudson Institute frames the U.S. response to Chinese “economic aggression.”

With China, all silk roads lead to intellectual property. In the absence of any Chinese quid pro quo to American openness, in 2018 the administration has expanded its powers to protect domestic technology from foreign investment. The Treasury Department’s Committee on Foreign Investment in the United States (CFIUS) began to block mergers and acquisitions considered a threat to national security. The Export Control Reform Act (ECRA) and the Foreign Investment Risk Review Modernization Act (FIRRMA) are charged with protecting tech sectors that map with its “Made in China 2025” strategy — advanced manufacturing, artificial intelligence, self-driving vehicles, semiconductors and telecommunications.

Applying worst-of-breed practices

Unintended consequences abound. The ban on Huawei network technology hits rural areas the hardest because the small network providers have to swap out cheaper Huawei equipment for more expensive offerings. And faced with its American supply chain being cut off, China will accelerate its build-your-own strategy, a trend that is already impacting U.S. tech companies’ stock prices.

Which brings us to where Firestein breaks rank. A trade strategy based almost exclusively on punitive tariffs has penalized American producers by eliminating lucrative markets, disrupted supply chains and cost consumers at check out.

“The United States is adopting “worst of breed” practices that are destructive to the economy … Our trade deficit with China is the largest good and services deficit dating back to 1776.”

David Firestein

Nowhere is the cost of the trade war more obvious than in the agricultural sector. Last week at a “hats on” event, President Trump announced a $16 billion farm aid package in a robbing Peter to pay Paul strategy to offset farmers’ losses with taxpayers’ dollars.

In fact, tariffs can make industries less competitive.

It breeds a kind of laziness here,” said Simon Lester, director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute.  Tariffs are taxes on outside goods, so they inherently protect some U.S. businesses from foreign competition. “You don’t have to compete with the best in the world you can just relax you don’t have to work that hard and face any competition,” he says.

Marketplace, May 27, 2019

Despite the national security narrative, the relationship between China and the United States is not about military might. Certainly, the U.S. technology industry is rooted in federal defense funding, and the Department of Defense continues to fund innovation. But this is a 21st century struggle not a 20th century one. China’s goals are economic.

“Military interests are a function of power. China is building its military to define its power … But let me assure you, China has no interest in becoming the world’s policeman.”

David Firestein

Relationships make the world go round

The conversation closed with a reminder that relationships grease the wheels that make the world go round. Firestein brought up a flash point from his first few weeks in Austin when two U.S. Congressmen, a U.S. Senator, numerous professors and the University of Texas student newspaper protested an offer from the Confucius Institute to make a donation to the CPPC. Firestein noted, however, that the United States has similar practices, and that in the end:

“Relationship matters. We have to get it in sync.”

David Firestein

What does the future look like?

A year ago, Firestein cautioned that competing with China was like a no-holds barred cage fight in wrestling. China knows what it wants its future to look like. State control provides a longterm planning horizon. It has a clearly written industrial strategy, state funding and a non-interference strategy with its people. The United States operates from tweet to tweet. As for a strategy?

In the end, we’re going to have to step up and compete. China is not our enemy but it is our fiercest competitor.

David Firestein, in a May 2018 talk at the “World Spins”

In the not too distant future artificial intelligence, autonomous vehicles, advanced manufacturing, semiconductors, telecommunications will shape not just American competitiveness but what our world will become. Even the current administration, loathe to cooperate on much of anything, went so far as to endorse a set of international AI guidelines sketched out by the Organization for Economic Cooperation and Development. To echo a comment made by Senator Richard Burr at the University of Texas’ Fifth Annual Texas National Security Forum:

If we don’t create a framework for this technology, who will?

Senator Richard Burr, chairman, Senate Select Committee on Intelligence, Nov. 2018

Taking Care of Business as Titans Clash

In the titanic trade clash between China and the United States, Tyler Johnson’s is a calm, sane voice. But then he is a businessman, and businessmen get things done. Johnson spent the go-go years between 2005 and 2015 growing Dell’s Asia-Pacific business. He saw the blossoming of Chimerica and now, on the cusp of what is starting to look like a nasty separation, reminds us there is an art to conducting business with another culture.

What he learned is the subject of a new book, The Way of the Laowai, a testimonial to taking a global perspective. (Laowai means outsider or alien in Mandarin.)

Take note, America: The self-selected attendees at Johnson’s “World Spins” talk were almost all Chinese. As one explained, “I want to learn how you think American companies should compete in China, from your perspective.

It’s complicated

The scale of the trade clash is enormous, and the stakes are high.

China is the world’s most populous country. Its breakneck development over recent decades has added hundreds of millions of consumers to the global marketplace while supplying a vast assemblage of low-cost goods… It is the source of roughly one-third of the world’s economic growth.

Peter S. Goodman, The New York Times

Separating business from policy is a sticky wicket, especially when two radically-different cultures have bound themselves so tightly together economically. As Li Yuan, the New York Times New New World correspondent wrote :

The two sides have plenty of reasons to distrust each other. The United States blames China for heavy job losses, theft of corporate secrets and cheating at the rules of global trade. China credits the hard work and sacrifices of its people for its success and sees the trade war as driven by American fears of a prosperous Chinese nation. (Photo/Doug Mills, The New York Times)

Li Yuan, The New York Times
Photo cohttps://www.nytimes.com/2019/05/14/business/us-china-tariffs.html
Photo courtesy of Doug Mills, The New York Times

But in the end, business is business, and sometimes getting things done requires a “whatever it takes” approach.

In China, government initiatives drive almost everything. It’s important to understand those initiatives and analyze how they figure into your business model. The more you understand what the government wants, the more likely you’ll be aligned …

Tyler Johnson

A laboratory for future innovation

Over the past 25 years, China has become what Oppenheimer Funds calls a “laboratory for future innovation” for U.S. companies. Big Tech-funded R&D centers place scientists from both countries side-by-side to crack breakthroughs in pivotal data-intensive areas including artificial intelligence and cloud computing. Microsoft Research Asia (MSRA) funds basic research in AI. Google opened an AI lab in Beijing and has a research alliance with Tencent on cloud services. Jeff Ding, a graduate student at Oxford and the force behind the China AI newsletter, is well worth following for a deeper understanding of cooperation between the two countries in R&D and technology (AI) commercialization.

But there are concerns. M.D. Anderson Cancer Center in Houston recently severed ties with three scientists over their ties to China and policy violations with research grants from the National Institute of Health. Writing in The New York Times, Mihir Zaveri noted that a report commissioned by the N.I.H. also mentioned that 39 percent of the Nobel Prizes in physics, chemistry and medicine won by Americans have gone to foreign-born scientists.

Data, ethics and national security

Research spawns innovation and ethical (cultural) concerns. The facial recognition technology that San Francisco banned out of fear it would be abused by the city’s police, is being used in some form by companies in China to save pigs from the devastating spread of untreatable African swine fever — and allegedly to suppress minority populations.

“Today’s battles are all about data, how you get it, who has access to it, and who you can share it … With 1.4 billion people (and limited enforcement of privacy laws), there is plenty of data in China.”

Tyler Johnson

Then there’s national security. At an intelligence forum sponsored by the University of Texas earlier this year, Sue Gordon, the principal deputy director of National Intelligence, acknowledged the reality of concerns over “dirty networks.”

We have to figure out a world with diverse technology we can’t control.”

Sue Gordon, Principal Deputy Director of National Intelligence
Can a Chinese company, genetically tied to the government, become a global technology leader?

Huawei, the subject of Gordon’s reference to “dirty networks,” is a stunning case study in whether a Chinese company, genetically bound to its government, can thrive as a global technology company. Huawei has made it a point to develop an entrepreneurial culture based on best-of-breed Western business processes.

“Only by learning from them with all our humility can we defeat them one day.”

Ren Zhengfei, founder, Huawei, The Huawei Story

But its blacklisting by the Trump administration is having a trickle-down impact. Just yesterday, Reuters announced Google restrictions on Huawei customers’ purchases of its proprietary offerings, a move analysts expect will hit Huawei’s European business hard.

A big world full of opportunity

At the eye of this hurricane, The Way of the Laowai is a reminder that opportunity is a matter of perspective.

There are roughly 196 countries in the world and close to 800 billion people. That’s a lot to wrap your brain around. Each of these countries is complex in its own way … In every location you want to do business in, you need a grasp of these particulars. In each place, business needs to be conducted differently… The world is big and full of opportunities if you can keep your perceptions in place.

Tyler Johnson

As proof, Johnson proudly brought along his smart, confident 13-year old, Mandarin-speaking daughter Reese, a living demonstration of all there is to be gained from learning the ways of another country. Indeed, she corrected him several times.

Brexit in the Bardo

As I made my way to the Capital Factory, that go-go hive of entrepreneurial-ism in the center of Austin, to hear what the U.K. Dept. of International Trade had to say about Brexit, I thought about a University of London marketing class I took years ago. The professor, a Scot, turned to a world map. He drew a line between Europe and the United Kingdom. Then he drew an arrow across the Atlantic pointing toward the United States and made a prediction: At some point, the British will break away from Europe and join the United States in an economic block. Prescient fellow.

Two countries with a lot in common. Map courtesy of the mls.co

Borders, walls and disagreements

It takes guts to tell your story when the facts aren’t clear, but the U.K. team did an admiral job. Representatives from the British Consulate’s Department for International Trade, law firm Taylor Wessing and accountancy Blick Rotherberg were optimistic that even the Irish border conundrum could be resolved — at the last minute (“That’s the way Europeans do things.”).

 It was one day after Parliament sent Prime Minister Theresa May once more into the breach of negotiations with the European Union, and less than a week after Congress reached an agreement to pause the longest government shutdown in U.S. history so our elected officials could settle a disagreement about a wall between neighbors.

Almost three years ago, on the heels of a political gambit by then-Prime Minister David Cameron, British voters opted to leave the European Union. The questions are when and how. Photo courtesy of the Associated Press

Do we stay or do we go?

Ross Allen, the New York City-based director at the U.K. Department for International Trade led the discussion, reminding us that the United Kingdom has a special relationship with the United States. The two countries are genetically linked — in language, history, laws and culture — and those commonalities matter a great deal.

Data Privacy: Privacy continues is a hot button for the U.S. GDPR is in place in the U.K., as is Privacy Shield. Regulation is a moving target, but there is a common foundation.

Business Headquarters: “Pragmatism” is the operative word. Considerations such as degree of industry regulation, the need to move people around Europe, the size of the organization, labor laws and tax rates all factor into a decision.

Regional Differences: London will continue to be its own country, as are all great cities. But other regions, particularly the north, where businesses that rely on international supply chains will be hit hard – Leeds, Northern Ireland, Wales. I read this morning that U.K. automotive production declined 8% in 2018, as investment plummets and jobs disappear.

Trade: Separate trade agreements are in the works with Israel and talks are underway with South Korean and Japan.

Defense: NATO, an intelligence community that’s joined at the hip.

Worst case scenario? On March 29, Parliament decides not to decide. A second referendum to stay in the E.U.? Too late and too expensive. Unlikely.

“I am England”

Every muddle has its heroes, and I asked Vice Consul Haileigh Meyers and her Silicon Valley-based colleague David what they thought about Prime Minister Theresa May.

She (Mrs. May) is a true public servant, and she realizes she needs to get this done. She’s driven by a commitment to public service.

UK International Trade and Investment
British Consulate-General
After negotiation Brexit, Theresa May will not run again for prime minister. Photo courtesy of euractiv.com

Imagine taking a job that no one else wants, a job that brings you defeat and humiliation by even your closest allies. Imagine sticking with that job as other opportunities more to your liking and skill set pass you by. If you haven’t read the New Yorker piece on Mrs. May, do. Here’s hoping Queen Elizabeth, another woman who knows a great deal about sacrifice in the name of public service, can offer guidance from her own long tenure as leader of a nation that faced and dealt with dwindling political and economic power.

Y2K.2 ?

Closing the session, Allen tossed out a provocative idea: “What if it’s just like Y2K, and we wake up and nothing happens?” Some of us remember the panic that preceded the turn of the century hysteria about whether networks and data centers could tolerate the transition between “1999” and “2000.”

After the session, I rode down in the elevator with Drew Haas, who is moving to London next week to open the U.K. office of San Saba Pecan. They have a warehouse outside of York, and Drew will be growing the business in Europe, where almonds are vulnerable to some stiff Texas competition.

POSTSCRIPT: Inflexibility: The flip side of determined leadership?

UPDATE March 18, 2019: The BBC reports Mrs. May will try to get her proposal passed after two rejections, something the now-famous House of Commons Speaker John Bercow has ruled as a no-go unless there are “substantive changes” to the proposal. Will Mrs. May charge into the same brick wall once again?

UPDATE March 21, 2019: The meltdown.


The Outing of Climate Change: How About a Policy?

This week saw the follow-on meeting to the Paris Climate Accord. The news is not good; or, as the Washington Post put it, “We are in trouble.” But at least the facts are clear. Yesterday,  the Global Carbon Project reported that carbon emission levels are not only growing (this year, 1.6 percent), they’re expected to jump another 2.7 percent, to 37.1 billion tons in 2019. The usual suspects: China in first place, the United States, Russia, and the EU. India was called out for rapidly-growing coal use. This news came on the heels of a Congressionally-mandated report the White House slipped out late on Black Friday warning of both severe environmental and economic damage if we continue on our present course.

Washington Post_emissions
Carbon emissions, the chief culprit in climate change, have hit a record high, and are climbing. It’s fair to say as this chart climbs, the quality of our (increasingly close) future goes down.

It’s time to build a shared vision of our future 

Which brings me to a conversation  among three brilliant scientists. The session, held during the Texas Tribune’s TribFest last Fall, explored our resistance to managing global warming and was sponsored by BP, an early champion of carbon reduction. The panel included:

  • Jason Bordoff, formerly the senior director for energy and  climate change at the NSA (yes, climate change impacts national security in a big way), now at Columbia
  • Katharine Hayhoe, the director of the Climate Science Center at Texas Tech.
  • Michael Webber, the Webber Energy Group, soon to be scientific and technical director at the French energy powerhouse ENGIE, on leave from the University of Texas at Austin

A policy that embraces both energy and climate

The consensus among the three: We need a policy that embraces both climate and energy, a shared vision of the future in terms of food, jobs, opportunities. Not an easy conversation, but as Hayhoe pointed out, it can start with a simple question: What do you care about? What do we share  — our children’s quality of life, being able to walk outside and breath, having water to drink, hunting and fishing, whatever it is that matters to each of us.

“The only reason we care about climate is because it affects things we already care about. It’s not an environmental issue; it’s a human issue. This is why I care about a changing climate, because it exacerbates our greatest humanitarian challenges: poverty, hunger, inequality, and more.”  @KHayhoe

“This doesn’t matter” isn’t getting us anywhere

Hard? Scary? Not applicable? It doesn’t matter, as Hayhoe pointed out,  the “this doesn’t matter to me” approach isn’t getting us anywhere in the face of mounting evidence .

Texas is Number One among the most vulnerable 

Regardless of whom you ask, Texas is among the fastest-growing states in the country. Webber noted that Texans love being number one, and the state also stars as number one in terms of climate vulnerability. Thanks to the Environmental Protection Agency’s recent rollback of restrictive guidelines, drilling is booming along the Gulf Coast, home to both the nation’s most productive oil fields and one of  most environmentally vulnerable regions in the country. Houston, at the epicenter of drilling activity is still recovering from the most expensive ($125 billion and counting) hurricanes in history.

Debris_pickup_TT_Harvey

Hurricane Harvey cost us $125 billion and counting — but it also convinced the city to develop a climate action plan. Photo courtesy of the Texas Tribune.

The state, which Webber described as the home of epic droughts punctuated by Biblical floods, is bound to become even more vulnerable as the rate of climate change rockets along at 50 percent faster than the rate of historical measurements. The jury is out on whether any action will come out of the upcoming legislative session, though Beto O’Rourke’s willingness to spar with (and almost beat) Texas’ junior senator was a hopeful note. Another bright spot: Houston has a climate action plan. But as above at the international level, so below here in Texas:  Are we too late?

Leadership matters

Final note: I attended the session thanks to an invitation from Paula Barnett-Bulcao, BP’s senior director of government relations and public affairs. I’ve admired BP for years for their vision and willingness to wear a white hat in an industry known for climate degradation. Barnett, who’s been with BP for 16 years, told me that when she was starting out in the industry, BP was the company she knew she wanted to work for.  Unfortunately, as is the way with white hats, BP fell off their horse in a big way with the Deepwater Horizon Oil Spill.  So it was very, very good to see the company out in front again. Leadership matters – everywhere and on all levels.

 

China and Innovation: While You Were Tweeting, the Future Happened

David Firestein, the executive director of the University of Texas’ new China Public Policy Center headlined a recent session of our speaker series, The World Spins, with some advice about competing with China.

“In the end, we’re going to have to step up and compete.  China is not our enemy. But it is our most formidable national competitor.”

Firestein, an Austin native who spent 20 years in China with the State Department and another 10 as a senior vice president at the East-West Institute, has no illusions about what’s at stake.

“It’s like a cage match in wrestling,” he explained, where one wrestler, the United States,

David Firestein, Founding Executive Director, China Public Policy Center; Clinical Professor of Public Affairs
David FIrestein, executive director of the China Public Policy Center: “In the end, we’re going to have to step up and compete.”

follows the rules, and the other, China, uses any- and everything to win. And winning means becoming the first country in history to be a brutally market-oriented authoritarian dictatorship.

In a cage match, tweets and tariffs are a poor match against a singularly focused industrial policy and a bill of rights that says:  Citizen, you stay out of politics, and we, the government, will make you rich.

One battleground:  artificial intelligence and big data

If you’re not reading Jeff Ding’s ChinaAI Newsletter, you should be. Ding, who is a graduate student at Cambridge, shares translations of Chinese policy, strategy and technology. His most recent is a report from boutique private investment firm Rising Investments on China’s Civil-Military Fusion.  The report notes that although applications based on artificial intelligence (big data, internet) need time to developed.

  • AI military applications still need a lot of time: products for the military industry require “high reliability,” so emerging technology like AI will be used as reserves and not be applied until they are mature, and the related technologies for AI (big data, internet) also have a number of security issues.
  • Intelligent weaponry and intelligent robots will have a major impact on the strategy and the tactics of future wars.

China also plans to use the same public-private partnerships that built the American technology sector to achieve its goals.

  • China did not permit non-government capital to enter into national defense industries until 2005. They are still looking for the emergence of a 50-100bn military industry private corporation on the scale of say Lockheed Martin.
  • The goal is to have over 80% of defense industry information construction technology come from private enterprise. China hopes to reach the first wave of peak civil-military fusion in 3-5 years.

Will political turmoil stifle American innovation?

Without the Dept. of Defense we wouldn’t have the Internet or email, much less venture capital and private equity.  Read Andrew Ross Sorkin’s excellent article about the push back against defense contracts among the employees of Silicon Valley technology giants. Sorkin quotes Adam Grant, a professor at the Wharton School and a member of the Defense Innovation Board, an independent federal advisory committee set up under President Barack Obama, said he believed that the partisanship that was contributing to the debate would ultimately stifle innovation.

“I worry that it will stall progress,” said Grant. “Innovation has been fueled for decades by private-public partnerships. It smacks of cutting off your nose to spite your face.”

Meanwhile, Firestein reminded us, China is in that cage match, its eye on the long-term, even as American strategy changes with an election cycle, from tweet to tweet. It’s hard to win a cage match when it’s unclear what winning looks like.

“I think we’re at the beginning of a major transformation and a technology revolution that is, by an order of magnitude, more disruptive than the internet revolution 20 years ago,” Robert Manning, a senior fellow at the Atlantic Council recently told American Public Media’s Marketplace Report.

“If we don’t get wise to these trends that are reshaping our economy and are going to affect the way we work, live and everything else, the future is going to take us by surprise.”

 

 

 

 

 

 

 

 

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