Economic tensions between the US and China didn’t begin with Donald Trump, and they won’t end with Joe Biden. A renewed urgency by both sides to gain technological independence from the other, whether via supply chains or intellectual property, provides opportunities for companies and executive candidates alike – particularly in Europe.
Donald Trump was tough on Chinese tech companies, signing executive orders blocking access to everything from markets to technology and investment.
Joe Biden’s hawkish tone during the early days of his term suggests things aren’t about to get any easier, but that won’t come as a surprise to the companies in question. The Chinese government is already working to free the industry from its reliance on imported tech and overseas supply chains and the issue now forms a central plank in the state plan for post-pandemic growth.
That was made clear during December’s Central Economic Work Conference, a state-organised gathering to lay out the strategic economic objectives for the year ahead. Priorities one and two were to mobilise national power behind scientific and technological innovation and to strengthen China’s independent ability to control industrial supply chains.
True independence is a a project that could run for decades. Europe stands to gain from the slow rupture of supply chains during the intervening period, which in turn presents opportunities for smart hiring and expansion. For executive candidates there have been few better times to make a career adjustment. Here are our top five themes to consider:
1. The expanding pool of executive talent
Europe’s high tech industrial companies are engaged in a period of transformation, both as a result of pandemic-related disruption and longer term structural changes such as digitisation. Redundancies have been widespread as management teams have sought to streamline operations, which has created a deep pool of talent seeking work. At executive level that talent is now more affordable, presenting a narrow opportunity to bring in good people that would usually need to be lured away from competing firms.
2. Navigating the culture gap
China’s economy has already surpassed its pre-pandemic size and the IMF expects output to climb 8.1% this year following effective containment measures. There is now a clamour among European executives to follow this economic opportunity. For executives seeking work on the Chinese mainland, or with Chinese companies operating in Europe, understanding the culture gap is crucial. There is more to consider than just language or distance from home, rather more nuanced culture differences – particularly when it comes to working hours. This will become more pronounced as China continues its European M&A drive, increasing the fluidity of skills between Chinese and European institutions.
3. Spotting social intelligence
Elevated levels of disruption and uncertainty have become a feature of this era. For companies in high tech industrial sectors, understanding how managers make decisions amid disruption, referred to in management circles as VUCA (volatility, uncertainty, complexity, and ambiguity), has become at least as important as anything written on a CV. It is perhaps the essential ability for C-suite appointments, however spotting it is tricky.
This is part of a broader theme emerging in hiring across innovative sectors – that social intelligence is now at a premium. Candidates able to display it are the ones that stand out, particularly for increasing numbers of roles managing digital transformation.
4. A renewed focus on local knowledge
A localisation drive in mainland China that we’ve seen gathering pace over the past decade is reaching an important moment, and the business community in China expect local people to be managing in local markets. Some European companies operating in China have been quicker to adapt to than others and increasingly we’re seeing leadership teams of global organisations reflect the communities in which they are operating in – in the sense they are now more likely to be born in China and able to speak the local language.
5. The reversal of China’s brain drain
Policy initiatives implemented by Beijing to prevent ‘brain drain’ and lure back its best and brightest after obtaining a western education are starting to pay dividends and we expect more future leaders to develop the early phases of their career in China. This is much more pronounced in the high tech sectors, where China more advanced in key areas of emerging technology, including 5G and autonomous driving.
Taken together, these themes will enable both companies and candidates to position themselves optimally for a growth phase that is only just beginning. Indeed, analysts expect earnings at Chinese large and mid cap firms to climb by a fifth over the course of the year, much of which will be supported by European institutions as the transition to independence gathers pace. Boards able to find and retain individuals with the talents to navigate the cultural aspects of this process are the ones that stand to gain the most.