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ECONOMIC DEVELOPMENT , EMPLOYABILITY , SKILLS , TECHNOLOGY AND TALENT MANAGEMENT IN HANGZHOU AND ZHEJIANG PROVINCE BRI

ECONOMIC DEVELOPMENT , EMPLOYABILITY , SKILLS , TECHNOLOGY AND TALENT MANAGEMENT IN HANGZHOU AND ZHEJIANG PROVINCE BRITISH COUNCIL APRIL 2011. Professor John Shutt, Leeds Business School, Leeds Metropolitan University Professor Paul Iles, Salford University Business School

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ECONOMIC DEVELOPMENT , EMPLOYABILITY , SKILLS , TECHNOLOGY AND TALENT MANAGEMENT IN HANGZHOU AND ZHEJIANG PROVINCE BRI

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  1. ECONOMIC DEVELOPMENT, EMPLOYABILITY, SKILLS, TECHNOLOGY AND TALENT MANAGEMENT IN HANGZHOU AND ZHEJIANG PROVINCEBRITISH COUNCIL APRIL 2011 Professor John Shutt, Leeds Business School, Leeds Metropolitan University Professor Paul Iles, Salford University Business School Xiaoxian Zhu, PHD Student, Salford University Business School

  2. Source: Leeds Metropolitan Planning & Registry, April 2011

  3. CHINA: The Changing Student Agenda 2011-2020 China continues to attract more international students Both the number of Chinese students studying abroad and the number of international students choosing China as a study destination has increased, according to data released by the Ministry of Education earlier this month. In 2010, the total number of Chinese students studying abroad was 284,700. But perhaps more interesting to the UK audience is the growing ability of China to attract more international students than ever before, with 265,090 choosing to study in the country. Those students come from 194 countries and attend 620 colleges, research institutes and other educational organisations in 31 provincial regions in China. Students from neighbouring Asian countries accounted for 66% of the total, followed by European, American and African students. More than 22,000 international students received Chinese government scholarships in 2010, representing a 23% increase. South Korea, the United States, Japan, Thailand, Vietnam, Russia, Indonesia, Kazakhstan and Pakistan were the top 10 countries that sent the most students to China. The Ministry of Education reportedly has plans to attract 500,000 international students by 2020, which would make China the top destination for international students in Asia. HE International Unit 2011

  4. British Council: ZJUT/ Leeds Metropolitan Research Project To map the changing employment and skill needs of Hangzhou city and region Develop new approaches to enterprise education appropriate to the Chinese context Map the needs of CPD provision in Hangzhou Identify key economic and business issues to be addressed to further the relationship between Zhejiang and Yorkshire, Leeds and Hangzhou Plan new developments, partnerships and innovation education courses for 2008-2011 Deepen and adapt the delivery and content of our MAITF Course to emerging concerns and facts on the ground.

  5. Summary Introduction China’s economic growth, a new stage of domestic development Zhejiang in the Yangtze River Delta Hangzhou City and New High Tec Growth Zones Company Case studies Talent management and talent shortages Conclusions The British Council Zhejiang University of Technology/Leeds Metropolitan University research project

  6. China’s Economic Growth Source: L. ZHANG Foreign Direct Investment and the Formation of Global City-Regions in China, Regional Studies, Vol. 41.7, October 2007

  7. The Yangtze River Delta

  8. China’s Economic Growth China’s growth rate can be sustained in single-digit rates for decades. China’s economic size will match America’s by 2035 and double it by mid-century, with deep economic and strategic implications for the rest of the world. China brings 760 million workers into the global economy and has three of the main global city-regions.Understanding how these city regions function is a major task for Business Schools.

  9. The Pattern and Sources of China’s Economic Growth 1 The most powerful force driving China’s economic growth is capital accumulation The investment boom that has underpinned growth has been largely financed out of domestic savings The second-contribution to growth has been made by Total Factor Productivity ( TFP ) Systemic reforms that released growth potential and improved efficiency. A Third contribution is the 4 trillion Yuan Fiscal Stimulus Package started in November 2008 and leading to investment in infrastructure, housing, railways, water, electricity, the environment and technological innovation.

  10. The Pattern and Sources of China’s Economic Growth 2 The fourth factor is the supply of labour The pool of talented labour especially in engineering has allowed China to transform many otherwise capital intensive productions into labour intensive processes, breaking barriers to entry into value chains.New industries like railway engineering and shipbuilding have been developed in a short space of time(5yrs). There are new concerns however that China’s labour market and skills development is not matched with the needs of the economy and the need to build the service economy and the finacial services There is a new search for talent management strategies for China and for Chinese companies,many of which are growing very quickly and reguire a highly skilled workforce

  11. Zhejiang in the Yangtze River Delta YRD features a diverse set of industries of varied global connectivity, capital and technological intensity, ranging from car production to the garment industry Global-local economic connections run deep into the very bottom of the local economy and far out to the geographic margin of the region embracing adjacent regions such as Anhui Goods are made by a regional division of labour embedded in a regional flow of raw material, intermediate inputs and transport logistics The province of Zhejiang has been the centre of private enterprise development in China The province has a strong rural economy made of networks of SMEs, mainly involved in the secondary sector The urban economy in Zhejiang is concentrated on heavy and advanced Technology industries and incresingly the emphasis is on growing high technology and financial services.

  12. Hangzhou, Zhejiang The capital of Zhejiang, is a cultural and tourist centre in China and has been twinned with Leeds, UK since 1988. Has one of the best scientific human capital stock in China and is ranked in the top 5 investment destinations in China. The IT and financial services sector is fast developing: Hangzhou wants to be a major financial centre. Aiming to be the “ Paradise Silicon Valley”, home of high technology in China. The city has developed a strong culture of “industrial technology alliance” between education institutions and firms, and between firms and there are university spin offs in major growth areas e.g. Insigma. Hangzhou technological and industrial developments rests on four key National-level Development Zones and anew fifth zone with Singaporean investment. Accelerated investment in Hangzhou Subway Project and Subway Line One to open 2011 the biggest infrastructure project in the history of the city

  13. TM Processes Iles 2007 Attracting talent: Branding, Matching Retaining Talent: engagement, psychological contract Developing Talent: leadership development Transitioning Talent : deployment, promotion, succession, lateral movement, exit

  14. Drivers of TM Shift from industrial/ information age Intensifying global demand for high-calibre talent, esp. managerial/professional Growing propensity to switch companies, careers: talent loss/brain -drain Work-Life balance Demographic changes: e.g. ageing (Michaels et al 2001)

  15. Emergence of TM in China 1)Chinese labour-management system is currently in a state of transition (Warner, 1997; Shen, 2007). 2)Exacerbating shortage of talents speeding the pace of adoption and discussion of TM. 3)TM has become the latest trend in China, particularly in high-tech companies (Iles et al 2010 a,b; Preece et al 2010; Hartmann et al 210).

  16. Drivers of Talent Management in China Shift from industrial to information/ knowledge age, esp. high-tech companies Intensifying global demand for high-calibre talent, esp. managerial/ professional. Generational Diversity: growing propensity to switch companies, careers eg talent loss/rain-drain. Work-life balance Demographic changes: ageing workforce

  17. Talent Shortages in China 1: Drivers 2 Expatriates continue to fill many gaps; increasing use of Asia-Pacific region and foreign-born Chinese. Short-term solution: longer term problems, eg high expense, need for localisation, perception of emerging ‘glass ceilings’ by local Chinese staff. Senior managers expected to increase over the next 3 years, with 67% expecting increases at lower levels.

  18. Talent Shortages in China 1: Drivers Shortage of talent holding back companies 2005 McKinsey : next 10-15 years Chinese companies will need 75,000 globally-effective leaders to realise global ambitions, but only 3-5,000 at present (Wilson 2008). Many leaders brought up in Cultural Revolution : despite tenacity, relationship skills and hard work may lack critical knowledge/ skills and experience in strategy, innovation, enterprise and empowerment. Younger leaders may lack people skills; despite high education may have received little management training, with turnover often high (25% pa).

  19. Talent Shortages in China 2: Responses 2 McKinsey: growing talent shortages in China and the imbalance between business opportunities and the supply of qualified managers and executives (Lane and Pollner 2008) Growing need for talented managers: major challenge to both MNCs and local businesses. 44% of Chinese executives: insufficient talent major barrier to expansion Continued growth increases demands for talent when MNCs increasingly competing with local firms for scarce talent in same talent pool.

  20. Talent Shortages in China 2: Responses 2 Mismatch, graduates and skills/ attributes required by employers eg PMI2 study Iles, Shutt & Zhu 2010 Recruits often high expectations, and high targets, leading to high turnover. Chinese companies increasingly looking abroad to recruit talent; 43% of executives expected proportion of foreign managers to increase

  21. Talent shortages in China 3: Talent Development Mercer: 72% of respondents in China claimed main challenge in staff recruitment was lack of qualified candidates in the labour market. Key issue : how to develop and retain staff Management and leadership development of local staff a priority Many companies lack commitment to develop a comprehensive leadership development strategy, or expertise to implement one (Wilson 2008). PM12 British Council research project, Leeds Metropolitan University & ZJUT

  22. Going Global “In areas that not only include solar panels but also wind energy,telecommunication networks,power transmission and high speed trains,Chinese companies are already on a par with their western counterparts,often after “re-innovating” technology sucked out of joint ventures.What China lacks right now is not money;it is technology.” Technology and talent management are linked FT January 19 2011

  23. Company case studies 1

  24. Company case studies 2

  25. Company case studies

  26. Company case studies Alibaba's Jack Ma Fights To Win Back TrustGady Epstein, 03.23.11, 06:00 PM EDT Forbes Magazine dated April 11, 2011Setting things right after a scandal at China's largest e-commerce company. http://www.forbes.com/forbes/2011/0411/features-jack-ma-alibaba-e-commerce-scandal-face-of-china.html http://www.alibaba.com

  27. ALIBABA.COM Alibaba.com (HKSE: 1688) (1688.HK) is the global leader in e-commerce for small businesses and the flagship company of Alibaba Group. Founded in 1999 in Hangzhou, China, Alibaba.com makes it easy for millions of buyers and suppliers around the world to do business online through three marketplaces: a global trade platform (www.alibaba.com) for importers and exporters; a Chinese platform (www.1688.com)for domestic trade in China; and, through an associated company, a Japanese platform(www.alibaba.co.jp)facilitating trade to and from Japan.  In addition, Alibaba.com offers a transaction-based wholesale platformon the global site (www.aliexpress.com) geared for smaller buyers seeking fast shipment of small quantitiesof goods. Together, these market places form a community of more than 61 million registered users in more than 240 countries and regions.  Alibaba.com also offers business management software and Internet infrastructure services targeting businesses across China, and provides educational services to incubate enterprise management and e-commerce professionals.  Alibaba.com also owns Vendio and Auctiva, leading providers of third-party e-commerce solutions for online merchants.  Alibaba.com has offices in more than 70 cities across Greater China, India, Japan, Korea, Europe and the United States

  28. CITIC BANK A new breed of Chinese Bank CITIC Group established in 1979 State owned and tenth largest bank Listed on Hong Kong and Shanghai Stock Exchanges Central Party Committee and the State Council appoints Party Committee of CITIC Group Striving to develop CITIC as a world class conglomerate Offices in Tokyo,New York and Kazakhstan Plays a key role in motivating fiscal stimulus package

  29. Company case studies Insigma Ranked as Leader in IAOP 2011 Global Outsourcing 100® Service Providers A leading global IT and BPO service provider Developed as a spin out from Zheijang University College of Computer Science and Technology and the former President of Zheijang University Developing Intelligent City projects with Chinese local authorities and regions Alliance with IBM US Developing Intelligent technology Parks,Intelligent Logistics, Intelligent City Strategies

  30. XIZI UHC Xizi UHC is a large-scale enterprise with more than 11 billion CNY in asset and nearly 7000 employees. The sales revenue in 2008 exceeded 12.5 billion CNY.  Insisting on “Capital Diversification and Product Specialization”, Xizi UHC attaches great importance to the balanced development of R&D, manufacturing and service. Our products include elevator and elevator components, boiler, parking system, crane, steel structure, real estate, investment, general merchandise and so on. Our subsidiaries include joint ventures like Xizi Otis and Xizi IUK, which are jointly established through the cooperation with several famous Global Fortune 500 enterprises, as well as several Chinese industry leading companies, such as Hangzhou Boiler Group, Xizi Trust Tech, Xizi Forward, and so on. We are ranked No.1 in global commercial escalator market and in China domestic elevator component, parking system, waste heat boiler industries. Join ventire with Otis Elevator. Has a Xizi United University and a XIZI research institute encouraging technology innovations

  31. Company case studies Premier Wen Jiabao Encourages Xizi UHC to Accomplish More No.1s From June 25 to June 26, accompanied by Zhejiang Provincial Party Secretary Zhao Hongzhu, and Zhejiang Governor Lv Zushan, Premier Wen Jiabao came to Hangzhou to investigate the current economic situation. He visited Hangzhou Xiangrun Garment Co., Ltd., Alibaba Network Co., Ltd., Zhejiang Xizi Forward Electrical Machinery Co., Ltd., Zhejiang Hangcha Engineering Machinery Co., Ltd., and Hangzhou Oxygen Plant Group Co., Ltd. In each company, he went to the workshop and held discussions with management staff and employees to collect industrial information including fabric and garment, e-commerce and equipment manufacturing, etc, as well as the operation, research and development, and sales situation of the companies. Later on, he chaired a meeting participated by chief leaders of Shanghai, Jiangsu and Zhejiang provinces to study the present economic situation. Zhejiang Xizi Forward Electrical Machinery Co., Ltd. mainly produces electrical machines for elevators. Its flagship product named permanent magnetic synchronized gearless tractor features high efficiency, low power consumption and environmental friendliness. On the afternoon of June 25, Premiere Wen came to Zhejiang Xizi Forward Electrical Machinery Co., Ltd., and was warmly welcomed by Xizi UHC Chairman Wang Shuifu, President Chen Xiaxin and other company members. After being briefed of the company history, strategy, accomplishments and culture, Premier Wen was very pleased. He kindly asked questions to several production line employees about their work. Then, he talked to people around him: “Just now, your general manager told me about the four No.1s that Xizi has accomplished. You have good confidence. The company is far-sighted by focusing on energy conservation, environment protection and improving product quality. You also did a great job in innovation. It’s good that we produce products that other nations cannot produce, and produce better quality products than other nations. Xizi started from a small factory. Now it has world-class products, technology and talents. I can see the company has a bright future. Moreover, the company pays great attention to social benefits. A company should not only seek profit, but also serve the general public. Worldwide competition is very fierce now. I hope you can accomplish more No.1s in the world and keep those No.1s.” The words of Premier Wen are the recognition of Xizi UHC’s development, and also the inspiration and expectation for each Xizi UHC member to work even harder and to make Xizi UHC the best company in the industry.

  32. Company case studies UTStarcom Announces a Proposed Reorganization to Change its Place of Incorporation from Delaware to the Cayman Islands http://www.utstar.com/

  33. UT STARCOM (nasdaq:UTSI) A global leader in the manufacture of IP based integration and end to end networking and telecommunications solutions Customers include the largest service providers in emerging markets Internet protocolTV (IPTV),Next Generation Networks (NGN);Broadband Leading provider in Asia.

  34. Bank of Beijing Established 1996 Partner of ING Group and IFC Branches in Tianjin,Shanghai,Xi’an Shenzen,Hangzhou,Nanjing Village Banks in Yanquing 2007 listed on Shanghai Stock exchange 2010 est first domestic finance company and life insurance joint venture with ING Shift to Chinese Banking sector a priority

  35. CHERY AUTOMOBILE 7th largest Chinese vehicle manufacturer based in Anhui Province Founded 1997 as a SOE and uses Volkswagen SEAT technology Top Chinese car exporter since 2003 Technology alliances with AVL Austria (engines) and Bosch (transmissions) and Fiat Aiming to produce electric vehicles and has JV with Israel and a new plant opening in 2012 in Changshu,Jiangsu Province Wuhu Economic and Technological Zone established in 1993 as a state level zone. Many component manufacturers located in Heifi HI-Tech Industrial Zone. Hifei High Tec Park Awarded advanced zone status under the Torch programme 2003 Strong links to Anhui University of Technology and Science in Wuhu

  36. What is TM? identification,development,engagement/ retention/ deployment of employees particularly valuable to an organization, either because they are ‘high-potential’ or because they fulfil business-critical roles (Tansley et al 2007 CIPD)

  37. Conclusions and Implications Chinese Business Schools and British Business Schools need closer understanding of their respective partners economies and needs Greater policy understanding is required eg. Importance of the Torch programme Most Chinese companies in our survey complained that graduates needed more company training and orientation, as at university they do not develop the skills needed in the company workplace some had established their own Universities internally Our project experience reveals that there is little in the way of systematic forums through which labour market needs and skills considerations and the implications of globalisation can be considered between Chinese Business Schools and Chinese Business and greater understanding reguired of SME’s and SOE needs Although Chinese government encourages collaboration between universities and businesses, but collaboration with ZJUT for example, in the non-scientific and technical fields of management and leadership is limited. Much collaboration has been technology driven. Much needs to be done for the 2011-2015 period to develop collaboration and development on key issues in management education and graduate employability. There is a need to consider how to develop this work in the current environment as well as the need for more consistent student survey and feedback for international students to enable courses to be monitored, evaluated and improved and graduate destinations to be understood.

  38. What are the issues? Employer engagement underdeveloped Graduate destination surveys underdeveloped Applied Research underdeveloped Cultural Awareness matters- more required Internet and Computing less interactive and needs developing Established Partners – long term plans are essential Leveraging additional funding important Developing trust is critical. Many dinners! BS Research on high technology growth sectors and companies is underdeveloped and needs more support

  39. References Hartmann E., Feisel, E., and Schober, H. (2010), ‘Talent management of western MNCs in China: Balancing global integration and local responsiveness’, Journal of World Business 45,2, 169-178 Iles, P., Chuai, X. and Preece, D. (2010), ‘Talent Management and HRM in Multinational companies in Beijing: Definitions, differences and drivers’, Journal of World Business, 45,2,179-189 Iles PA and Yolles (2006) Culture and transformational change with China’s accession to the WTO: the challenge for action research Journal of Technology Management in China vol 1, no 2, 147-158 PMI2 (nd) The Prime Minister’s Initiative for International Education http://www.britishcouncil.org/learning-pmi2-fe-funding-opportunities.htm PMI2 (2008) China Briefing University of Wolverhampton, 10th July 2008 http://www.britishcouncil.org/eumd-pmi-china-briefing-2008.htm Preece D, Iles PA and Chuai X (2010) Talent management and management fashion in multinational corporations in Beijing International Journal of Human Resource Management (in press) Shutt J & Cheng H ( 2009) The changing Chinese economy: a case study of Hangzhou Regions 275, Autumn, 5-9 Zhu X,Iles.P,Shutt J(2011) Journal of Chinese Entrepreneurship.

  40. THANK YOU 20-26 Queen Square Leeds LS2 8AF 0113 8123223

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