The risk and rewards of doing business in asia.
I'm betty liu.
These are the "singapore sessions." ? "singapore sessions" brings together executives to talk business about east asia.
Tonight we are with leaders in health care and technology.
We have a leading biologists and philanthropists.
Best known for his groundbreaking research on aids and the human genome.
He launched several biotech companies and is an expert on the health care system in asia.
Stephan is the president of a leading enterprise technology company that has 70,000 customers and is in over 100 countries worldwide.
We have brought them together on one of their rare days they were boring -- both here in new york.
There are lots of different cultures and lots of different regulations.
You have to be successful in the asian pacific.
You have to do business their way.
You cannot bring made in america solutions and think they will be successful overseas in the asian pacific.
I think it is a mistake that most political leaders make an emerging economies is not to focus on health.
It is one of those popular things they can do for their people.
It can be done in a way that is not terribly expensive.
You have to take the time to make that solution specific to that market.
We have done that work over the last few years.
Now is the time to reap the rewards.
Oath of them have spent a lot of time in asia, particularly, south east asia.
Markets are present huge opportunities for american businesses post what is interesting is how they each see things differently.
Stephen sees them breaking out of the workshop role and innervating are themselves.
-- and innovating for themselves.
He will talk about what makes other successful and what holds others back.
Tell us a little bit about what has been the big difference doing business in southeast asia versus out west?
If you look at the hotel industry, we have solutions in which we serve europe and north america very well, but we have to be specific about doing things the local way.
What is the most significant thing you had to look at?
For us it was about leadership.
At the end of the day, we could not take home-grown american and european solutions and bring it overseas.
Six months ago we hired a local president.
Has a strong foothold.
What is his specialty?
He understands the manufacturing business the stuff you understands the hospitality business.
Biggest challenges working in asia?
Keeping up with the regulations and how to do business in vietnam is still very different.
How do you navigate that?
We have the head of korea and the head of australia and the head of japan.
Wasn't hard finding local talent?
There was so much opportunity.
We wanted of find -- get as close to the local client.
Have boots on the ground.
We wanted local people in china and in korea and ibm and sap are doing the same thing -- and sap are doing the same thing.
Is it -- i think it is ahead.
Talk about industrialization of malaysia.
The university -- the company built a university.
We have provided hundreds of engineers and graduates for that company to serve the local needs.
That is innovation.
Tell me about dining software for business clients.
The asian customers are mobile and like the cloud.
They want software the way they would work at home with the internet.
Easy to use and intuitive.
How do you do that?
We have 80 designers from all over the world who are not engineers.
-- our engineers.
They can do it all.
What is the attitude you do not want to do?
It is still very much a clique driven software.
It is not intuitive.
Thousands of hotels use our software.
It is a lot easier to navigate.
What are you looking at?
Opening an office in korea and in vietnam.
We have expanded our offices in singapore significantly.
We have almost doubled the staff in the last year alone.
Bill sees south asia through two different lenses.
One is as an entree door and biotech engineer and the other is public policy.
He looks at the national healthcare system.
He sees as critical for sustainable come economic growth . one country stands out.
You recently wrote a book on how efficient the singapore health care system is.
It has the best health care system per dollar for their lowest costs per person of any country in the world.
It delivers high-quality health.
What can be applied from the singapore health care to other countries?
One of the most important things is about searching individual responsibility and collective responsibility.
In singapore, it is important.
In health care, pain for part of it yourself.
From the collector's responsibility, the government, making it possible.
That is an idea we should instill here and in other countries.
If you get it for free, you don't respect it and you can abuse it.
If you pay part of it, you're much more careful.
Make sure there is transparency in costs and outcome.
Every price is posted.
Outcomes are posted.
You can shop and businesses can shop.
The third is to encourage competition based on quality and costs.
Is a possibly works in singapore because it is a small country and can be managed?
You can do it anywhere.
Singapore does something that is hard to do at a national level and the u.s., which is micromanage.
If they feel you need to do dollars more per year because you are over the age of 70, they will do that.
You know a lot of doing business in asia.
What could the government do in asia to spur entrepreneurship?
Make sure the rules are transparent and the rules are enforced.
Many asian countries, that is the case.
The rules change and are not clear and he regularly enforced.
One of the reason singapore is an attractive place to do business is people have a feeling there is a rule of law like there is in western europe and in the united states.
Biotech and health care companies themselves, what is the biggest pitfall?
If you are in the pharmaceutical discovery is this, you do not have the people that are used to making discoveries and inventions.
If you are in sales, there are massive groups that are producing fake drugs or substandard drugs.
Is there a talent gap in the industry you are in in health care?
There is a talent gap in the invention.
How do you find new ideas?
How big of a hindrance is that too is this?
It is a problem -- how big of a hindrance is that to your business?
It is not disaffirmance of the industry.
Many of these countries do not follow international patent standards.
They think they are getting away with something.
They are crippling their own future.
If you want to build a culture of invention, protector inventors or you will not have them.
They will go somewhere where they can be protected.
When we come back, they sit down together or a candid conversation of doing business in southeast asia.
Growth will determine whether or not we have double digit growth.
Great opportunities for you.
In your business, they can be a threat.
There has been tremendous growth that has happened in the markets.
What you are seeing is the middle-class and upper-middle- class are growing.
People have money, but things are so expensive.
They cannot buy at the department.
As an adult, they can i get an enormous couch or a big car, but they can get a great handbag.
? there will surely be an impact across asia that could increase on governments to find new ways to grow the economy.
We sat down with our experts to talk about leadership, regulation, corruption, the asian consumer, and whether innovation can find a home.
I have been involved in a couple of different industries in asia, health care and pharmaceuticals.
It is encouraging to see the progress over the last 10 years.
Really interesting health care systems.
Particularly in some parts of singapore and in other places.
It is an exciting time.
I have seen a significant transformation in china where labor needs to be the simple answer.
They would get away with it.
There was a fast-growing auto maker in the world.
Using technology to make cars.
Who is responsible for that?
People realized that innovation is the way to grow.
You cannot continue to grow by low wages.
Galatia, talk about innovation there.
They are using technology and have built their own university -- malaysia, talk about innovation there.
They are using technology and have built their own university.
The people i see the most innovation from are the young people graduating from these universities.
They're looking for places innovative.
Are they going overseas?
It is hard to find talent.
There are lots of the companies building up businesses in singapore and korea.
We have built offices in korea and vietnam.
We are not the only ones.
You cannot be a global company like ours without getting big growth in that asian pacific.
Tell me some of your world lens.
Health care, biotechnology, what are some the biggest challenges you see through that industry?
What we are doing is great looking around the world for the best examples in health care services and health care delivery.
Surprisingly some of the world's best examples are in india.
It is not over all india when it comes to health care.
I would say it is fair to say it is a mess.
Outcomes are lousy on international basis.
There are spots of real brilliance.
Or isn't outsourcing business that is -- there is an outsourcing business that is thriving.
One thing that has been surprising is they have developed on their own a very high quality health care system in some states for the poor.
That should be rep ticketed elsewhere -- replicated elsewhere.
When you look for examples we here in the united states can learn from, i find the most affect the health care systems in the world are in singapore.
For the dollar that they spent, they get better results.
They spend only about 4% of their gdp as opposed to ours which is 18%. so wise.
They thought it through.
The fundamental basis of their system is that there has to be a good health care system to ensure social harmony.
What do you do that can help countries in that region with her information services for health care?
It is the largest provider in the u.s. for software.
When you take that solution and help health care organizations around the world, we have partnered up.
These are the biggest outsourcing firms in india.
They have a shared services initiative that they own for 500 hospitals in india.
No backbone to it yet.
Let's partner were some who knows the culture and the dynamics.
They're using our solution as a backbone.
What would you say?
Any people there who understand for a long period of time.
Make the right kind of adjustments.
Understand who is who and what the regulations are.
It is more of an art than a science.
Companies have tried to expand in asia.
There are lessons learned.
One, thinking you can take a great product it irks in the u.s. or europe and take it over to asia and it works.
You have to know your products for the local communities.
Look at japan.
How to use software is a different mindset culture.
The way they use the applications is totally different than in the u.s. second, the notion you can run in the united states.
You have to build out local leadership.
Go to the customer as close as you can.
Give them the power to run the business as they need to.
Is a lot of competition for innovation?
The first country i think that will be truly innovative in asia is china.
The reason for that is interesting.
Many of the intellectual leaders -- a third of our top university professors are chinese.
The chinese have shared those with us.
They have bro -- they have built research palaces.
You think some of the biggest inventions will come from china?
I think there will be great u.s. and chinese inventions.
It'll be hard to say whether it was invented here or in china.
We invest more rmb as a company in china -- rmb as a company in china.
-- r&d as a company in china.
We're helping them to launch new automobiles around the world.
It is a solution that was invented in china together with local companies.
When we come back, how to overcome the hurdles.
These are huge problems that affect many.
? we are talking about countries on one end like singapore that has a mature out their system and you can but in your products and generate an appropriate return this is vietnam where they are less similar.
There is a need for the acceptability to health care facilities to come up first.
It is a slower process.
It takes time.
It takes investment.
Sometimes we designed differently for different reasons.
The asian markets, the asian people seem to enjoy ambiguity.
Americans hate it.
We need to be told exactly what is clear for every step of and experience.
When you do that in asia, it turns out able don't like it.
-- people don't like it.
They like to make decisions themselves.
? welcome back to "singapore sessions" on bloomberg television.
We have been speaking to william haseltine and stephan stoll.
We asked them what are the biggest hurdles they say are in doing business in asia.
What has been the biggest predatory hurdle you have seen the has kept you back in asia?
10,000 hotels around the world that use our solutions.
You can imagine places like one of the largest french hotel systems in the world, their biggest growth is to go into china and the rest of asia with hotels.
We had to build a whole new revenue management system applicable to the local market because of the regulations.
Mesons like a lot of extra costs.
-- it sounds like a lot of extra costs.
Is it worth it?
If you look at india, regulations are famously difficult.
They regulate almost anything you can think about.
In some cases, they do it well and in others, badly.
Take the pharmaceutical injury -- industry.
The supply lot of materials, that they do not -- usually in the united states, you can hire a lawyer.
We really need are specialists in administrative practices.
There are a lot of positives.
There are a lot of hurdles as well.
First is corruption.
Bingo this huge market in drugs that are exported from china to all over the developing world -- there is a huge market in drugs which are being exported from china to all over the developing world.
You cannot say that about india or indonesia.
The other thing that happens is you set up a business and a clone you.
They clone you into college intellectual property.
My product is muscled and manufactured goods.
It is intellectual property.
There's more security in asia and are here in the u.s. for that reason.
We have seen improvements.
Singapore is a reason why singapore is for us.
The truth is because we rely on the regulation and that consistency -- there is a rule of law over there.
China has improved.
You can go to other places.
China is so big you cannot label it as a policy or a procedure.
It is by different factions of the country itself.
Talk to me about the security issue and have secure the software is when you are designing it.
Is been a lot of time securing the software.
There are lots of ways to do that.
At the end of the day, it is a guarded 11 of our business.
We have keys and locks on our software products.
It is pretty battle tested.
You are right.
There are a lot of dark sides come up that there are a lot of light sides.
What about a hard landing scenario.
What impact would that be?
Disastrous for everyone.
China has built capacity in all most every -- overcapacity in almost every category.
When they slow down, all of south america slows down, indonesia slows down, southeast asia slows down, africa slows down.
If it crashes, the whole world will have to crash.
We in the united states and europe and japan will be able to withstand that, but there will be serious repercussions.
A hard landing in china is a dismal prospect.
China is aware of that.
They know they have to use technology in order to be competitive.
They are realizing it and are moving quickly.
The chinese are realizing in and managing it to be -- the fact that china has created over production for the entire world, whether you are making nails in indonesia come are making airplane parts in france, it is a pretty serious global consequence.
They do it at a skill that is unimaginable.
Look at and automaker.
They have tripled compared over the last five years.
Great opportunities for you, but also a threat.
In your business, they can mount -- absolutely.
Continue to innovate and invent.
That is what we have to do to stay competitive.
It will be a lot harder to stay where you are.
You have to run like heck to stay in the same place.
That is it for this episode of "singapore sessions." thank you to our guests.
These visit singaporesessions.com for more behind-the-scenes extras.
Join the conversation using #si ngaporesessions.
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