FES07 - Mahbubani: How Asians have figured out the Seven Pillars of Western Wisdom

(Running notes from the second Future of Europe Summit in Andorra)

The theme of this year's Future of Europe Summit is "Addressing Europe's brainpower challenge" -- which means assuming that Europe has a brainpower problem. And indeed, several countries have been experiencing difficulties in attracting top talent from elsewhere, and others are actually victims of a brain-drain (people moving to Silicon Valley or -- newly -- to the rising global cities of Dubai and Shanghai, for example). Possible answers of course include increasing research and development efforts and creating a more flexible economic environment.

After the welcome words from Andorra's Prime minister Albert Pintat, the first session features Enrique Iglesias, secretary-general of the Ibero-American cooperation secretariat, and Kishore Mahbubani, Dean of the School of public policy at the National University of Singapore and former Singaporean ambassador to the UN, and author of "Can Asians think?" (a very controversial book when it came out about 6 years ago), with Claude Smadja, the conference's produce, moderating.

Smadja introduces by talking about the surge of Asia and its implications: During hundreds of years, the Western world (+ Japan) had the monopoly in terms of knowledge creation and innovation. This monopoly is now put into question and is becoming a matter of the past. India today has 70 billion dollars in software exports. Add to that engineering, financial services, automotive parts, pharma, etc.. China is producing the biggest part of manufacturing goods in the world, but it's also about biotech, stem-cell development, aerospace industry, software (12 billion USD in exports last year). So we're talking about a new situation in which Europe will have to fight very hard to keep its position and manage its capabilities to remain in the top tier of the global economic players. We're not talking about 30 years down the road: we're talking about the next 7 to 10 years, things are moving at exponential pace.

Iglesias: we're all conscious that we're living a change of epoch in the economic world. Changes in the system of production, in the nature of our output, in productivity, in the nature of international economic relations. How do we move in this world? Europe is trying to attract people with very selective immigration policies: we (BG: he talks about Latin America) have a problem with that. There are two or three areas where Europe and Latin America can work together: Europe helping us in the training of our human resources; private sector should also be interested in having industries moving to the region; sharing these human resources (people working part of the year in the North and the rest in the South, leveraging the seasonality).

Mahbubani (he just finished a new book, "The New Asian Hemisphere"): The 19th century, was a European century. The 20th, was the American century. The 21st will be the Asian century. Just as Europe had difficulties adjusting to the American century, it will have bigger difficulties adjusting to the Asian century. I understand there can be a certain degree of doubt: is this for real? Part of my confidence is based on the fact that if you look at history, back 2000 years, the two largest economies in the world were consistently China and India. Why is it happening now? Not because Asia has rediscovered some old Asian wisdom: what the Asians have finally figured out are the 7 pillars of Western wisdom, which enabled the West to succeed. And, by the way, how much does Europe still believe in them? Here they are:

• Free market economics: today the greater believers are the Asians, the Chinese are deeply committed to free market economics, one reason why China was very keen to join the WTO is because they believe that by complying with those standards it will become the most competitive economy in the world (Russia doesn't want to join because they feel the WTO rules are an imposition on them; the Chinese believe they're a gift to them).
• Science and technology: Europe became dominant for centuries because it surged ahead in its mastery of science and tech. But if you extrapolate from what you see on campuses and colleges today, by 2010 70-90% of all new PhDs in science and engineering will be held by Asians.
• Meritocracy: why is Brasil a  soccer superpower but economically a medium power? Because when it comes to soccer, they look everywhere, they search for the best players in cities as well as in slums; but when they look for economic talent, they only look to the upper or medium class. Asians have discovered that the millions of brains that were not used for centuries are now being used. In India, even the "untouchables" are being given education and are integrated into the economy, it's a silent revolution.
• Pragmatism: it's an ancient Western practice. Asians have becoming the best copycat nations in the world. As Deng Xiaoping said: "it doesn't matter if a cat is white or black, if it catches mice". In most of Asia, the ideological debates are left behind.
• Culture of peace: In the region where we saw the biggest war since WW2, the guns are now silent.  Asians have not got to the "zero prospect of war" that Europe has achieved, but it's moving in the right direction.
• Rule of law: the country that is producing the largest number of new laws in the world is China.
• Education: the hunger for education in Asia is phenomenal. In many ways, the gold standard for education now is being set by Asian countries, starting with Singapore.

(BG: no mention of democracy and political openness in his list, but after hearing him speak, his book -- to be published in February -- goes straight into my to-read list).

Smadja: At a certain point we will have to ask ourselves in Europe what's the price of virtue. What's happening in Europe in stem-cell research is creating a wide boulevard for China to become the leading country in this field. The current hysteria in Europe about the environment is also likely to push industries to migrate. (BG: readers of this blog know that I strongly disagree with this last point, but that's for another post).

Jan van den Biesen (a Philips VP, in the audience): My company has moved a lot of activities to China, and we're often blamed for that.  Sure, at the beginning it was for cheap labor, but now it's because there is where the markets are. But then, what's next? Just being a knowledge economy in Europe will not be good enough: we need to encourage creativity. But even that can be copied. So what we should do is be able to continuously change and adapt in a dynamic way. A comment on meritocracy: when I look at what my children get at school is rather mediocrecy: being mediocre is good enough. When you see the zeal, the drive that exist in Asia, that's clearly lacking here. (He refers to a current Dutch strike claiming reduction of school hours). If we continue like this, I know the future of Europe: in a few years we will be so poor that manufacturing will come back to Europe, because of cheap labor!

Mahbubani: Democracy is not critical variable. India is an open society with a close mind; China is a close society with an open mind. This is something that many in the West have not understood. Even if China is politically closed, it's one of the most open societies in the world. That's one of the reasons why US universities are rushing to partner with Chinese universities: because they're becoming thought leaders. If you focus only on democracy, you may not see the whole picture. Perhaps the most meritocratic organization in the world today is the Communist Party of China, despite the lack of democracy.
Cross-partnership: it's not a zero-sum game, Europe and Asia and America can grow together. But Asia has had a bruising experience with Europe. In the mid-1990s a partnership was started, but then the Asian financial crisis came and Europe lost interest, sending the message that "we like you when you're doing well, less when you aren't doing well": Europe needs to send a clear partnership message to Asia that will be consistent in good as in bad times. Nobody knows what's gonna come in the future, as we say in Asia "he who speaks about the future lies, even when it tells the truth". But you can foretell certain things: millions of minds opening up, there is a huge explosion of cultural confidence among young people in Asia, a conviction that tomorrow belongs to them, it will be very hard to resist the forces of change coming from Asia