Uncertainty. The Economic Perspective

The result of increased “complexity” arising from:    globalization, accelerating technology shifts, faster pace of innovation, increased information and knowledge, further differentiation of fields of knowledge, deregulation plus global and local practices, convergence and dependence of industry sectors, scarcity of  natural resources, closer linkage with the environment, mounting expectations of different stakeholders such as consumers, changing capital markets, etc.

Uncertainty. A Broader Perspective

The result of increased complexity in law, economy, politics, science, ethics. (Luhmann, Teubner, Beck, Baumann)

From the legal perspective, overlapping of various legal instruments, practices, standards; from local, regional and global sources. i.e. Trade remedies, WTO, FTAs or national laws; 

Global law is always facing local practices, local enforcement; as well as influences from other systems such as political or economic systems. This is specially the case in China.

Uncertainty. Challenges to the Observer

• Paradoxes. Almost every trend seems to have a counter trend.
  Niels Bohr “The opposite of a correct statement is a false statement. The opposite of profound truth may well be another profound truth”

• Management of the unknown. Information is ubiquitous. Future competitive advantages will depend on the mastery of the unknown (Eamonn)

Uncertainty. The Traditional Responses

• Increasing control, bureaucracy (or intervention), or centralization.

• Rely on limited observation instruments –metrics- (Einstein “not everything that can be counted counts, and not everything that counts can be counted”)

• Busyness / scapegoats (i.e. CEOs)

A Different Approach. Observation, Learning, Innovation, Adaptation.

• Traditional responses prevent observation, learning, and therefore innovation and adaptation.

• New approaches create structural and organizational mechanisms, to facilitate observation, learning innovation and adaptation.

• Donald Sull states that three concurrent abilities must be present: 1. Strategic anticipation; 2. Organizational agility; 3. Resilience –uncertainty absorption.

Innovation. Towards Asia. China

• Innovation involves prior observation and learning.

• It has been said “Global success depends on local knowledge”; now increasingly we must say “Local success depends on global knowledge”.

• There are many questions when considering to approach the Asian markets and the Chinese markets.

• However, statements such as “not all industries will find a source of competitive advantage in China” will normally deter you from developing serious observation and learning strategies.

• There is sufficient evidence to think that the Chinese market deserves exploration and observation, because it is most likely that all markets will be influenced by it directly or indirectly.