Global Economy Feature – Forget China and switch to Zimbabwe, Mexico or Egypt

Forget China and switch to Zimbabwe, Mexico or Egypt

LONDON, (FT) – Growth is ‘driven by knowledge – at the level of society, not the individual.’ Where does growth come from? Why do some countries “emerge” and take on “developed” status, while others flounder before reaching that stage?

Some once highly unlikely candidates have emerged as powerful economies. South Korea, for example, grew in two generations from a peasant economy devastated by war, to a fully paid-up member of the developed world. Others once far better placed have stumbled.

This is not simply a question of natural resources, or of educational systems. Instead, ambitious research led by Ricardo Hausmann at Harvard University suggests that growth is “driven by knowledge – at the level of society, not the individual”.

The first question asks what a society knows how to do. The follow-up is whether this knowhow can be applied in new areas. If people are already skilled in one area, are there other industries in which their skills could easily be applied?

The Harvard research involved producing a multi-modal “map” known as the Atlas of Economic Complexity (a simplified version can be viewed at, examining how knowhow forms clusters among industries. Big groups form around garments – where many successful emerging markets started their ascent – construction, machinery, chemicals and electronics. All need skills readily transferable to other sectors.

Outlying clusters involve natural resources. Countries blessed with oil or mineral wealth can do well for a while. But extractive industries do not involve expertise that can easily be transferred to other things. Unless countries deliberately build new areas of expertise with the cash they generate from their minerals, they will regress when the money runs out. So Mr Hausmann endorses the notion of an “oil curse” – politicians in countries that can get all the wealth they need from the ground under their feet tend to grow complacent, and avoid necessary reforms.

This might explain why South Korea, with little mineral wealth, grew so fast, while Mexico, endowed with what in the 1970s appeared to be among the world’s biggest oil supplies, lapsed into stagnation.

The next stage is to spot the nations best positioned to improve. The winners run counter to market wisdom.

For example Mexico, an underperformer of the last generation, shows up as the Latin American economy best positioned for growth. Brazil, recently an investor darling, shows up very poorly. Why?

Mexico is better positioned, according to Mr Hausmann, because it has diversified enormously, into aircraft, information technology and so on. After the financial crises of the 1980s and 1990s showed that it could not live on oil alone, Mexico invested in manufacturing and assembly companies on its border with the US.

This was a crude play on cheap labour, piecing together imported parts and then sending them back across the border. But these industries are well connected. With these skills, it becomes easier for Mexico to diversify into other industries, from car manufacturing to electronics, and to take on more stages of the production process.

Brazil has concentrated on its resources sector, led by soybeans and mining. “Brazil has grown remarkably little in the context of very high commodity prices,” warns Mr Hausmann. “If they stay where they are or decline, their ability to grow will depend on their ability to diversify into more complex products. Brazil isn’t well positioned to do that.”

Ricardo Hausmann endorses the notion of an ‘oil curse’ – politicians in countries that can get all the wealth they need from the ground under their feet tend to grow complacent, and avoid necessary reforms

Predictions around the rest of the world are also counterintuitive. In sub-Saharan Africa, the country best positioned for growth is Zimbabwe. “If you assume that biology is going to take care of their main obstacle, which is Mr Mugabe, the country has knowhow in its society that could be expressed into higher levels of income.”

Tunisia and Egypt, despite the turmoil after the Arab Spring, show up as promising growth spots. Qatar, potentially a classic victim of the “oil curse”, does not. “Oil is unlikely to be an additional source of growth, so the rest of the economy doesn’t have much to help it.”

Most importantly, there is China. The good news is that Mr Hausmann’s group think it is well-positioned to grow. The bad news is that their prediction, of 4.5 to 5 per cent growth per year for the rest of this decade, is in line with a recession at some stage. As conventional wisdom has pencilled in China for growth of at least 7.5 per cent, bailing out the rest of the world in the process, this is not good news. For many, Chinese growth below 5 per cent would be a “hard landing”.

But Mr Hausmann’s target sounds fair. “They have to go from a 46 per cent investment rate to something more reasonable. It’s hard to do that without a period of very slow or negative growth.”

You have been warned. To mitigate the effects of a slowing China, perhaps it is best to look on Mr Hausmann’s map for the countries that are counter-intuitively best placed to grow regardless.

The Riot in Ephesus Two Thousand Years Ago and The Riot in the World Today

In the Scriptures, the messages in the story of Chapter 19 of the Acts of the Apostles, which I reproduce below, have formed my worldview in terms of men’s political/economic motivations and the whole bedrock of what we have come to call our civilization. Just go through the passage and thereafter check out what I have to say about some of the salient points.

Acts 19

New International Version (NIV)

Paul in Ephesus

While Apollos was at Corinth, Paul took the road through the interior and arrived at Ephesus. There he found some disciples and asked them, “Did you receive the Holy Spirit when[a] you believed?”

The Riot in Ephesus

23 About that time there arose a great disturbance about the Way. 24 A silversmith named Demetrius, who made silver shrines of Artemis, brought in a lot of business for the craftsmen there.

Artemis of Ephesus (aka Diana of Ephesus) , 1st century CE Roman copy (Museum of Efes, Turkey). With breasts aplenty, it’s easy to tell that she was an ancient goddess of fertility.

25 He called them together, along with the workers in related trades, and said: “You know, my friends, that we receive a good income from this business. 26 And you see and hear how this fellow Paul has convinced and led astray large numbers of people here in Ephesus and in practically the whole province of Asia. He says that gods made by human hands are no gods at all. 27 There is danger not only that our trade will lose its good name, but also that the temple of the great goddess Artemis will be discredited; and the goddess herself, who is worshiped throughout the province of Asia and the world, will be robbed of her divine majesty.”

The Ruins of the Temple of Artemis

28 When they heard this, they were furious and began shouting: “Great is Artemis of the Ephesians!” 29 Soon the whole city was in an uproar. The people seized Gaius and Aristarchus, Paul’s traveling companions from Macedonia, and all of them rushed into the theater together. 30 Paul wanted to appear before the crowd, but the disciples would not let him.31 Even some of the officials of the province, friends of Paul, sent him a message begging him not to venture into the theater.

32 The assembly was in confusion: Some were shouting one thing, some another. Most of the people did not even know why they were there. 33 The Jews in the crowd pushed Alexander to the front, and they shouted instructions to him. He motioned for silence in order to make a defense before the people. 34 But when they realized he was a Jew, they all shouted in unison for about two hours: “Great is Artemis of the Ephesians!”

This model of the Temple of Artemis, atMiniatürk Park, Istanbul, Turkey, attempts to recreate the probable appearance of the first temple.

35 The city clerk quieted the crowd and said: “Fellow Ephesians, doesn’t all the world know that the city of Ephesus is the guardian of the temple of the great Artemis and of her image, which fell from heaven? 36 Therefore, since these facts are undeniable, you ought to calm down and not do anything rash. 37 You have brought these men here, though they have neither robbed temples nor blasphemed our goddess. 38 If, then, Demetrius and his fellow craftsmen have a grievance against anybody, the courts are open and there are proconsuls. They can press charges. 39 If there is anything further you want to bring up, it must be settled in a legal assembly. 40 As it is, we are in danger of being charged with rioting because of what happened today. In that case we would not be able to account for this commotion, since there is no reason for it.” 41 After he had said this, he dismissed the assembly.

Section  Comment
23 The desgination “”Christianity” came later. Before then the new religion was known as “the Way”.
24 Temple of Artemis at Ephesus is Iconic. It adds flair to my attachment to this story. Check…..
Seven Wonders of the Ancient World
The historian Herodotus (484 – ca. 425 BCE), and the scholar Callimachus of Cyrene (ca. 305 – 240 BCE) at the Museum of Alexandria, made early lists of seven wonders. Their writings have not survived, except as references.
The classic seven wonders were:
1      Great Pyramid of Giza
2      Hanging Gardens of Babylon
3      Statue of Zeus at Olympia
4      Temple of Artemis at Ephesus
5      Mausoleum at Halicarnassus
6      Colossus of Rhodes
7      Lighthouse of Alexandria
The earliest lists had the Ishtar Gate as the seventh wonder of the world instead of the Lighthouse of Alexandria.The list known today was compiled in the Middle Ages—by which time many of the sites were no longer in existence. Today, the only ancient world wonder that still exists is the Great Pyramid of Giza.
25 – 27 Here Demetrius sees a threat to not just his business but the entire industry and, therefore, his livelihood and life. In my view, his reaction has become the default template of corporations today: viz. Organise the industry; lobby the city officials, the politicians and citizens. Is it farfetched therefore to say that, today, this is the modus operandi of the global warming denialists. They see the immediate threats to their profits as more ominous than the long-term, all embracing, perils facing the planet.


Let me leave you to extrapolate your own observations. Do leave your comments below. Have fun!


7 Strategies for Identifying Hidden Buyer Requirements – by Ray Collis

These interview strategies that I lifted of a RainToday article can be applied to any interview process where the aim is to identify hidden meanings.


7 Strategies for Identifying Hidden Buyer Requirements

You have read the buyer’s requirements. At first they appear thorough and detailed, but what has been left out? What hasn’t the buyer said that you need to know?

Here are some strategies you can employ to powerfully connect with the buyer’s hidden agenda. These are the unwritten buyer requirements and their more fundamental underlying motivations that can make the difference between sales success and failure.

1. Keep Asking Why

Focus relentlessly on the why of the decision. For every requirement identified by the customer, ask why?


The salesperson says, “The software language used is important to you. Can I ask why?”

The prospect says there is a need for inter-operability. The salesperson asks, “Why is that particularly important to you?”

The prospect says because in the past, systems have been implemented that don’t talk to each other. The salesperson asks, “Why has that happened in the past?”

The prospect says it’s because IT has their own way of doing things.

And suddenly a glimpse into the hidden agenda between stakeholders starts to be illuminated.

2. Build Trust—Show Empathy

The seller needs to make a special effort to uncover the buyer’s underlying motivations. They won’t be found in secondary research in business library reports. They emerge only in personal communication within an environment of trust.

The buyer’s core underlying motivations may not be uncovered by fact-finds or interrogative techniques. Understanding what really makes somebody tick requires an element of empathy, as well as the ability to see the situation from the buyer’s perspective. It requires some of the skills of a counselor or therapist.

3. Make It Personal

Even when we sell to large corporations there can be a very personal dimension to the sale. The same applies for pragmatic and economic business decisions. The buyer often has an emotional reason for buying something:

  • It’s something the buyer cares about
  • The buyer identifies personally with it
  • The buyer’s ego is bound up with the outcome
  • It affects how the buyer is seen or evaluated by others
  • It involves personal or professional risk or reward

Therefore, the seller must make the process personal and connect with the buyer’s sense of self—his self-image and self-concept.

4. Shed Light on Hidden Motivations

Help stakeholders reveal their hopes and fears. Bring them out into the open.

Bring logic and analysis to bear on the buyer’s hidden agenda. For example, a past negative experience with a technology of the type you are selling may impede his decision. As a salesperson, you might help him rationalize the fear by applying numbers and logic to it. For example, in the above situation, you might say:

“The failure rates today are less than 2%, compared to 20% in the early days of this technology. That makes it five times more successful than the other alternatives. We provide a pilot to demonstrate how successfully it can be implemented and a full guarantee, so risk is minimal.”

You must take care in adopting this approach, however, because:

  • The seller can easily come across as insensitive, a poor listener, or even arrogant.
  • Applying logic to emotion can be like mixing oil and water. Underlying beliefs and motivations may be impervious to reason and resistant to change.

5. Look Out for the Messy Stuff

Hidden motivations can sometimes be contradictory and confusing. They may even conflict with the buyer’s stated or on-surface requirements. They may be counter-productive and not in the buyer’s long-term best interests. In particular, this can happen when there is:

  • Un-thinking acquiescence, compliance, or conformity
  • Political tension
  • Unspoken risk
  • Self-defeating behavior
  • A skewed version of history or misinterpretation of reality
  • An unaccepted responsibility
  • A blind shot—an element of self-deception or denial
  • An elephant in the room—an unspoken issue or challenge
  • A previous bad experience or an unaddressed wound
  • Flawed logic
  • Paralyzing fear or limiting belief
  • Complacency or lethargy
  • A short-term mindset

You may or may not be able to change these things. In some cases, you may consider it prudent to “let sleeping dogs lie.” While in other cases, these factors, if left unaddressed, may impact on the potential of the sale or the account. But you need to be aware of them so you can decide how to proceed.

6. Listen to the Language Used

The words the buyer uses may offer a window into his hidden agenda. But more important than the words is the tone of voice, so really listen. Also, pay attention to what they talk about the most—or the least. It may provide a cue to their hidden agenda.

You should also use the buyer’s words in your pitches and proposals. If you take the buyer’s requirements and put them into your own language, something can get lost.

7. Use Projective Techniques

Projective techniques can shed light on hidden motivations. These include asking the person to answer certain questions in stream-of-consciousness mode—without deliberating on the answer.

Perhaps the most effective technique is to help the buyer visualize and imagine the results or the future that he wants to achieve. For example, you could ask, “What does success in respect of this purchase or project look like?”

Other techniques include:

Word associations—For example, “What three words would you use to describe this part of your business?”

Metaphors—For example, “If this project were a sports car, what kind of car would it be? Would it be a Ferrari or a Honda? Would it be going at full speed? Who would be driving it?”

Sentence completion—Some sentences you could ask them to complete:

  • I’d be delighted if…
  • A fantastic outcome would be…
  • When others talk about this decision—project—purchase, they…
  • The worst thing that could happen is…
  • If there is one goal I could achieve this year, it would be…
  • If something were to go wrong, it…
  • In an ideal world…

Unless you uncover your buyer’s true needs and requirements, you are making assumptions that may not be correct. And incorrect assumptions lead to lost business. Use these strategies to make sure you know exactly what your buyer’s wants and concerns are so you can offer the best solution possible.

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Few people know or care as much as Ray Collis about the trends in buying and their implications for deal success. Ray heads up The ASG Group’s Buyer Research practice. He is also co-author of The B2B Sales Revolution™ and QuickWin B2B Sales, and he is editor of Buyer Insights. He is writing a new book (and seminar series) that reveals the latest trends in buying that determine win rates.