The role of culture in Chinese business tourism
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Internship Assignment
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Matias Thuen Jørgensen
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210486****
17/01/2012
BRIC Business Tourism
- A qualitative study of business tourism in the BRIC countries
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Table of Content
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Chapter 1
Introduction
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The emergence of the so-called BRIC counties 1 – Brazil, Russia, India and China has in many ways changed the way we look at economy, market forces, trade etc. however in tourism research, particularly in research on business tourism it seems that the effect of the BRIC countries has to a large extend been ignored. With this assignment I seek to scratch the surface of the influence of the BRIC countries in a business tourism context and since I have had my internship in China which according to Economy Watch is the “The undisputed heavyweight” among the BRIC countries I will use this country as the case in my exploration of this subject. With this assignment I will thus:
1.
Make a discussion of different conceptualisations and perceptions of business tourism in which
I compare what may be defined as traditional business tourism in existing literature and the emerging business tourism in the so-called BRIC countries. I will include aspects on motivation in this discussion.
2.
On the basis of the above, I will discuss the role of culture in business tourism, and particularly in the relationship between Danish companies with an interest in China and the Chinese business environment.
3.
Lastly, I will make a discussion of the wider implications of BRIC business tourism, in particular the significance of the fact that new emerging economies may change approaches and strategies to business tourism products in general.
I have dedicated one chapter of the assignment to each of the three questions, and I will present methodological and theoretical considerations when this is relevant. But before I move on I will present my considerations regarding my philosophy of science going in to this assignment.
Philosophy of Science
My approach to this assignment can be described as an explorative hermeneutical approach. My subject of exploration is BRIC business tourism, and my case for exploring this subject will be Danish companies who do BRIC business tourism in China. My primary tools in this exploration will be four semi-structured interviews as well as existing literature on traditional business tourism. This approach is grounded in my ontological considerations as social constructivism is the academic world view that best fit my approach to this assignment. One of the most essential considerations in this regard is that I see the world as a product of social interaction, meaning that social actors construct meanings and phenomena and thereby the social world. (Colin et al. 2007:145). In this assignment this means that I must take the different social constructions and life worlds of my respondents into consideration as these will all affect the answers and thereby results that I get from my interviews
(Gadamer 1976:182). It is also important that I am aware that I, myself, am also a part of the social construction, which means that my questions, analysis method, pre-knowledge etc. also affect the conclusions that I produce during this assignment. An important factor in this regard is that my role
1 “The BRIC are both the fastest growing and largest emerging market economies. They account for almost three billion people, or just under half of the total population of the world. In recent times, the BRIC have also contributed
to the majority of world GDP growth.” (Website: Economy Watch)
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during the interviews was both that of a student making research for an assignment, but at the same time that of a person working for Innovation Center Denmark, Shanghai. This of course raises questions in relation to validity as the answers I get from the interviewees might be affected by the relation the interviewee and the company the interviewee represents, have to Innovation Center Denmark.
However through the analysis process I will try to compensate for this by being aware of the risk and reacting to it if necessary, in order to try to reach a valid understanding of my interviews. In my search for this valid understanding, my work will take me through a spiralling process of impressions, shallow work, in depth work, realization and new impressions. This process continuously increases my understanding and is referred to as the hermeneutic circle (Colin et al. 2007:145). It is important to mention that this process is also affected by my pre-knowledge which is developed during this spiralling process (Gadamer 1976:121). This means that I must also be aware and try to avoid that pre-knowledge about the interviewees and their companies, which I might for example have gotten through other work tasks for the innovation center, affect my analysis in a negative way. I will explain my methodological considerations in relation to my empirical data collection in Chapter 2.
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Chapter 2
TBT vs. BRICBT
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The purpose of this chapter is to discuss conceptualisations and perceptions of business tourism by comparing what may be defined as traditional business tourism in existing literature and the emerging business tourism in the so-called BRIC countries. In doing so, I will introduce perspectives on motivation that are based on motivation theory, which will also be presented. In order to compare traditional tourism 2 with BRIC business tourism 3 I must however define and create a perspective on the two on their own merits and since there is almost no existing literature on BRIC business tourism, while traditional business tourism is well covered I need to approach the subjects from two different angles.
Two approaches
TBT involves many different subcategories and while some researchers mention specific categories in their definitions, for example: “Travel associated with attendance at corporate or association meetings,
conferences, conventions or congresses or public or trade exhibitions.” (Byrne & Skinner 2007:55). The definition that I, based on the literature on business tourism, think covers the area best and that I will therefore work with in this assignment, will be that of Aguilera who argue that business travel is defined as “Work-related travel to an irregular place of work” (Aguilera 2008:3).
Despite a general lack of research on TBT (Byrne & Skinner 2007:62; Morrison et al. 1994:177;
Rogerson 2005:177) I will argue that there is still a wide catalogue of articles that deal with TBT and that this literature is sufficient to create the perspective on TBT that I need for this assignment.
In the case of BRICBT it is though, almost impossible to find literature that deals the subject. For this reason I will create a perspective on BRICBT through four qualitative interviews that I have conducted for this assignment. Three with Danish companies that have conducted BRICBT in China and one with a representative from Innovation Center Denmark, Shanghai, who has experience in arranging and executing BRICBT trips to China. Before I move into my discussion I will take some time to explain my methodological considerations in relation to this empirical data.
Methodological approach
As mentioned I have chosen a qualitative approach to the assignment (Kvale 2007:131). The main reason that I have chosen a qualitative approach is that the explorative angle of this project makes it almost impossible to base it on quantitative data. Thus this project is the first time the concept of
BRICBT is introduced and the qualitative approach gives me the opportunity to minimise my intervention, by to letting the respondents who have either done or arranged BRICBT define what it is.
This is especially due to the semi-structured interview form where I follow a very limited interview guide and otherwise let the respondents decide the direction of the interview.
Choice of respondents
I have conducted four semi-structured interviews, three with different case companies and one with a representative from Innovation Center Denmark, Shanghai. The three companies are respectively a
2 Henceforward TBT
3 Henceforward BRICBT
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small design company (SDC), a big electronics company (BEC) and a public consultancy organisation
(PCO) that visited China along with representatives’ from the Danish region that they work within. I have chosen these three companies because they represent three different segments of BRIC Business
Tourism. First of all they represent two different sides of business, being respectively private and public businesses. Second of all the three companies have different focus areas in China as SDC is mainly doing BRIC business tourism to get orders, BEC is mainly in there for R&D and PCO is there to cultivate relations.
Empirical approach and uncertainties
There are a limited number of Danish companies who have done BRICBT and the ones that have done it can be very hard to get a hold of because they are mostly bigger international companies. This meant that my only way to get in contact with the case companies was through my connections at Innovation
Center Denmark. For this reason both the interviews with the private companies and the interview with the public organisation was conducted with two purposes – this assignment and in order to get evaluations of their thoughts about the Innovation Inspiration Tours that Innovation Center Denmark offer. All the three companies were informed that there were two purposes of the interview. However, the fact that one part of the interviews was internal evaluation meant that I was not allowed to record the interviews. This means that there is a risk that important information has been lost because I did not have the chance to write down everything that was said during the interviews. In order to secure that the quotations that I use in my analysis are correct I wrote these down and had them approved by the interviewees, however while this approval makes sure that the interviewees are not misquoted it also gives the interviewees a chance edit and change what they have said after the interview, which I consider as a weakness. From the information gained during the interview and the approved quotations I have written a meaning condensation for each of the three company interviews, which can be found in Appendix 1, 2 and 3. The same conditions did not apply for the representative of
Innovation Center Denmark, and therefore a more thorough meaning condensation of this interview can be found in Appendix 4.
Traditional business tourism vs. BRIC Business
Tourism
Business tourism types
As mentioned earlier, there are many different types of business tourism, according to Lawson business tourism can be broadly separated into individual travel and organized group arrangements
(Lawson 1982:298). But other researchers operate with at least fifteen different categories, including individual and general business trips, training courses, product launches, corporate hospitality trips and incentive travel (Swarbrooke and Homer, 2001 in Rogerson 2005:176). Beaverstock mentions the following in his description of tourism types
“… it may well involve regular, mundane meetings with clients or suppliers/sub-contractors, or more innovative/entrepreneurial functions like negotiating deals, selling products or liaisons with foreign governments to access particular markets. Importantly, international business travel may also have a
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learning capacity, for example, attending conferences, trade fairs or conventions.”
(Beaverstock et al. 2009:195).
Judging from the interviews that I have conducted many of these business tourism types can also act as a part of BRICBT. For example the representative of SDC mentions that the purpose of their trip was to meet with different companies to evaluate on former projects, cultivate connections and create new leads (SDC: Appendix 2 4 ). However an important difference between traditional business tourism and
BRICBT seems to be that while the literature on traditional business tourism tends to distinguish between business tourism with the purpose of commerce and business tourism with the purpose of learning - like it is done in the above quote, the interviewees seem to have a more fluid boundary between the two when they talk about their experiences with BRICBT. Thus it seems that no matter what type of tourism they are conducting and no matter if this is the main purpose of the trip, learning about how to do business in China seem to be an aspect that receive high priority. For example the representative from BEC, who have earlier mentioned that the purpose of their trips to China is to get orders and find cooperation partners for R&D says:
“For us it is about lining up as many possibilities as possible and getting hands on experience with a
Chinese organisation and to gain knowledge and understanding of China, so that we can find out what is possible and what isn’t.”
(BEC: A1)
This indicates a very important difference between TBT and BRICBT, because it shows that learning about the country and business environment in the BRIC country that the tourist visits is an essential part of BRICBT even though the main purpose of the trip might be something completely different. It is also an important point when doing research on BRICBT because it shows that the traditional division between business tourism with the purpose of learning and business tourism with the purpose of commerce cannot be made in the case of BRICBT.
Another important difference between BRICBT and TBT is that while TBT includes a number of different tourism types that are more or less static or at least slowly developing – for example conference tourism. The relevance of different BRICBT types seems to be more dynamic because they are more dependent on the destination - in particular the economic and political conditions, as well as the development of the company that conducts BRICBT. The ICDK representative says “What is changing is that before the companies thought – >>we have to go there and have a look because we know
nothing about this<<. Now they come here with a clearer agenda.” (ICDK: A4). In this case some BRICBT tours that might have been relevant 5 years ago, for example pure exploration tours, may no longer be interesting to the companies because they now know the basics. The ICDK representative continues:
“Five years ago Shanghai and China was still very exotic and therefore there was a need for tours where you had people who were interested come out here and introduce them to China. It was about making
people aware of it and talk about it. (…)What needs to happen now is that private and public companies
(… ) need to be more targeted in their approach to China.”
(ICDK: A4)
4 Henceforward A1
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This fits well with the three interview companies who, as mentioned, are all still interested in learning about business in China, but at the same time come with an additional agenda. In relation to BRICBT this poses a challenge because the arrangers of these trips need to follow the development of the destination and the respond to it, but on the other hand it also gives a competitive edge because it forces these people to adapt and develop their products. This indicates that, because TBT often explores tourism types in a more static way which is rarely bound to any specific destination, much of the research that have been conducted on TBT is not relevant in a BRICBT context. In order to further discuss this point and the differences between TBT and BRICBT I will look into the way motivation is regarded in respectively TBT and BRICBT.
Motivation Theory
As suggested I will argue that there are important differences in the motivations to conduct respectively TBT and BRICBT when I compare the literature on TBT with the perspectives from the interviews. I will use motivation theory to take a closer look at these motivations and explore the differences between them, however, because motivation theory in a tourism context is limited to leisure tourism I will need to develop my own take on motivation from a business tourism standpoint.
I will do this through a modified version of Pearce’s Travel Career Needs model.
Travel career needs model
By expanding and extending Maslow’s needs hierarchy with needs that are relevant in a travel context
Pearce has converted Maslow’s model into his own travel-career ladder (See figure below - left)
(Goeldner & Ritchie 2009:253). The travel career ladder or travel career needs model as it has later been dubbed, is a hierarchy of travel motivations that emphasizes that people have a range of motives for seeking out travel experiences and for going in the first place. (Ibid:254; Pearce 2005:53)
Business Travel Career needs
Arnfalk & Kogg divides the benefits of a business trip into private benefits 5 and organisational benefits 6 . I find that this distinction fits very well into the train of thought that Pearce presents in his original model. Therefore I have used the thoughts of Arnfalk & Kogg as well as the considerations regarding business tourism mentioned above to create the new version of Pearce’s model that can be seen below. In the following I will explain how I justify adding a business perspective to the model and thereby how the model can be changed so it is also relevant in a business tourism context.
5 “Private benefits should reflect the sum of each meeting participant’s individual benefits from a meeting. This could include e.g. building personal networks, building deeper personal relations, the pleasure of getting out of the office and seeing new places, etc.”
6 “Organizational benefits should reflect the sum of each participating organization’s use of the meeting, including the short-term and long-term consequences of the meeting. But organizational benefits could also include private benefits that are of use for the employer as well, for instance if an employee forms a close relationship with a customer, this is also likely to be of benefit to the employer.” (Arnfalk & Kogg 2003:860)
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The psychological needs, whether external or internal, can be regarded as less important in a business context than in a leisure tourism context because business travel often revolves around the needs of a company instead of the needs of the traveller. However I will argue that the psychological needs still play an important role in business travel and the distinction between personal and organisational benefits made by Arnfalk & Kogg also points to the fact that the more basic travel comfort of the individual business traveller is also an important factor in business travel.
The Safety/security needs are as important in business travel as they are in leisure travel. And while one might argue that the “other directed” safety needs are more important in leisure travel because these needs often regards family members or other persons whom there is a very close connection to, I assume that most businesses are interested in the safety of their employees and therefore add a
“business-directed” category to Pearce’s model in this case.
I regard Pearce’s Relationship needs as less important in a business tourism context, when understood in the way that he originally presents it – as needs for love affection and affiliation with other people.
However I will argue that relationship needs if understood as the need for cooperation, cultivation of networks and meeting with partners is very relevant in a business context and applies very well to the model if the motivations are seen in a business tourism context. Therefore I will dub this type of needs
Relationship and networking needs and similar to the safety needs add a “business-directed needs” category.
As it was the case for the Relationship needs the Self-esteem/development needs does not apply directly to business tourism because of the focus on the personal development. Of course there is, vis-à-vis
Arnfalk & Kogg, the possibility that the individual business traveller has a personal agenda and therefore personal motivations, however a motivation model must also include motivations on behalf of the company. Again I will argue that adding a “business directed needs” category gives one the
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opportunity to focus on the needs in a business context instead of only on a personal level. With these changes this category can instead be dubbed image/development needs.
The Fulfilment needs form Pierces model can only be achieved by a single individual and this category therefore remains the same.
Discussion of motivations
As suggested above a big challenge when researching the self-directed needs, but in particular the psychological and fulfilment needs in a business tourism context is that it is very hard to get the interviewees to talk about these needs. I experienced this myself when conducting my interviews, but it is also evident in the literature on TBT that this is the case, since the motivations of the individual traveller is very rarely studied in a business tourism context. I will argue that the main reason for this is that when research is done in a business tourism context, the researchers as well as the interviewees or respondents themselves often tend to see the interviewees and respondents as representatives of a company or organisation instead of individuals with their own agenda, who happen to represent a company. This means that questions regarding the personal motivations of the business traveller is often not asked and if they are, the fact that the employee is representing the company might make them give answers that reflect the needs of the company more than their own needs because they otherwise would seem like bad representatives who put their personal needs in front of those of the company that they represent. I see this as a major problem in business tourism research since the personal needs of the individual business traveller according to Arnfalk & Kogg as well as motivation theory in general are very important in the decision making process.
Another problem in connection to the lack of distinction between the individual and the company is , according to Pan, that business in China is very dependent on this distinction:
“Business is based on relationships with individuals in Asia, where cultures emphasize personal contacts.
The foreign business person must therefore be prepared to invest time in building trust in himself or herself as an individual, not only as the representative of an organisation”
(Mead 1990 in Pan 2003:94).
Thus the Chinese business culture demands that the business person sees oneself, not only as a representative of a company, but also as an individual when doing business. This difference in the way one represents a company in China and the West points toward an interesting cultural difference that I will explore further in Chapter 3.
Earlier I argued that BRICBT in many ways is more dynamic than other kinds of tourism, since the relevance of different business tourism types within BRICBT changes very quickly depending on the destination and the traveller/company. This is also evident when looking at the interviewees motivations since the motivations and needs of all the three companies are different from, but affected by motivations that they had to go on earlier trips to the destination. This means that one of the main development motivations at least for SDC and BEC, but according to ICDK also others, is the company and self-directed need to learn about how to do BRICBT and how to act in the Chinese business culture.
This shows an interesting difference between TBT and BRICBT because it indicates that BRIC business tourists will often have a tendency for repeat visits to the same destination in order to learn more about the destination, whereas TBT such as meetings and conferences are often one time affairs.
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My interviews indicate that the BRICBT companies are especially motivated by company directed development needs as well as company directed networking needs. The motivations are however different in the sense that SDC seem to be pulled to China because of a need for growth through sales in the country, while BEC are pushed there in order to follow their costumers “It is an important market, and many of our customers are moving to China. So in order to follow the concept – follow your
customer – we had to do it.” (BEC: A1) and PCO and their clients are seeking development through exploration as they argue that you need to go there to “See what China is” (PCO: A3). Thus it seems that the image of China, not only a place of opportunity, but a place where it is necessary to be present in order to develop, is common for the BRIC business tourists. Image of the destination is also mentioned as an important motivator in the TBT literature (Hailin et al. 2000:645, Byrne & Skinner 2007:61;
Bradley et al. 2002:69; Rogerson 2005:181). However it is also mentioned that the importance of the image in recent studies is turning out to be less than indicated earlier (Frank & Robert 1999:37).
Instead it seems that the main motivators in TBT are often functional attributes that are not taken into account in the model above. These attributes include accessibility, infrastructure, expenses and weather conditions (Byrne & Skinner 2007:61). Bradley and Rogerson also point to these functional attributes as being some of the most important when choosing a business tourism destination
(Bradley et al. 2002:69; Rogerson 2005:181). The difference in the focus on what motivates businesses to chose a destination show a major difference between TBT and BRICBT in the fact that TBT rarely deals with specific destinations but instead focus on the business tourism type. This means that while the BRICBT tourists and therefore the research in this area is focussed on how to best utilize the BRIC destination in the development of their business, TBT deals with which destination that can provide the best conditions – often functional or practical – for the meeting, conference or other business event that needs to be held. This difference in focus indicates that BRICBT is a new destination dependent type of business tourism that need to be researched on its own and in a way that is very different from
TBT.
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Chapter 3
Culture in Business Tourism
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In this chapter I will discuss the role of culture in business tourism, and particularly in the relationship between Danish companies with an interest in China and the Chinese business environment. During the discussion I will include perspectives from literature on Chinese business culture in a tourism context.
Very little research has been done on the influence of culture in business tourism (Pan 2003:91). One of the main reasons for this might be that research on business tourism - as stated in Chapter 2, often seem to either ignore or focus on the more functional attributes of, the destination. Another argument for this could be that in the past, most business tourism was conducted in countries that did not differ enough culturally from the country of origin for this to be an interesting topic of research. However, with the emergence of the BRIC economies this is changing as these destinations attract more and more business tourism and presents the western business traveller with cultures and business cultures that are vastly different from their own. This is especially the case for, but not limited to China, where cultural phenomenons such as face and guanxi has challenged western business people for many years. In this assignment, as with this report in general, China will be my subject of discussion, but it is important to be aware, that although for example guanxi is mostly known as a Chinese phenomenon other similar concepts such as the Russian Blat are present in the other BRIC countries as well (Xin & Pearce 1996:1642).
The role of culture in Chinese business tourism
My interviews indicate that culture is a very important factor when conducting business tourism in
China. This is backed by literature on Chinese business tourism, thus Herbig & Martin among others mention that China is one of the most difficult countries for westerners to understand and adapt to
(Herbig & Martin 1998:15) while other researchers argue that the paramount reason for the failure of business between the United States/Europe and China is cultural misunderstanding (Tung 1991; Woo
1999; Harris & Moran 2000 in Pan 2003:91). As mentioned in my methodology section I have found all the three interviewee companies through their connection to Innovation Center Denmark. It can be argued that this connection alone indicates that the case companies are actively trying to overcome challenges in relation to the cultural difference between Denmark and China, as both the representative of BEC and SDC talk about how the mediating role that ICDK has when they meet with
Chinese companies is very important because of the cultural differences:
“… it is an advantage in the process that you have a person who know the Chinese culture and the business culture as well as the western culture and business culture and knows how to deal with and read
the Chinese business people, this mediation between us really smoothens the process.”
(SDC: A2)
The importance of this mediating role between the Danish and the Chinese companies could refer to the following contention put forward by the ICDK representative - you have to understand China to do business in China.
You need to understand China to do business in China
It seems that simply understanding the people and cultural surroundings that the interviewee companies do business in, is one of the main challenges when doing business in China. The ICDK
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representative emphasises that the most important thing to understand and accept is that “China is
different!” (ICDK: A4). He mentions differences in the way projects are run, the way decisions are made, the way you deal with the public system and the speed with which things happen as important. When discussing business tourism in relation to China, these differences are very essential because the need to learn about these differences, as argued in Chapter 2, are often what spawns BRICBT tourism in the first place. In the literature on the cultural aspects on business in China the concept of guanxi is often mentioned as very important (Wong & Tam 2000:58; Pan 2003:94; Xin & Pearce 1996:1642; Fan
2002:3) and I will argue that the differences mentioned above are all connected to this cultural concept. The ICDK representative also mentions the understanding of this concept as very important when doing business in China “There is another business culture here and another way to run projects.
For example personal connections and the concept of guanxi are very important.” (ICDK: A4).
The importance of Guanxi
The Chinese word guanxi is often mistakenly translated into networking, but the concept does not have an English equivalent. Consensus on a clear definition has neither been found but I find that a combination of Chen’s definition “… a friendship with implications of a continual exchange of favours”
(Chen 1995:53) and Wong & Tam definition “creativity and flexibility through a network of personal
relationships” (Wong & Tam 2000:57) together provides a good understanding of the concept. The concept of guanxi is often seen in connection with the concepts of Face and Renqin (Pan 2003:95; Mok
& Defranco 2000:107; Wong & Tam 2000:58), however due to the spatial limits of this project I have chosen to focus on guanxi.
While some argue that guanxi is becoming less important because of the westernisation of Chinese business, researchers that deal with the topic, for example Pan agree with the ICDK representative that it is still essential when doing business in China (Pan, 2003:93). In Chapter 2 I mentioned an example that show the challenges that guanxi involves when Chinese and western companies has to do business together - representatives of western companies try repress their personal interest when representing their company, while Chinese representatives sees the personal interest as an integrated part of the representation. I find this to be a very important difference when Chinese and western companies want to do business because the western businessmen’s way of acting might seem unearnest as they try to hide their personal agenda, while the Chinese businessmen might seem corrupt to the westerner because his or her personal interests are an integrated part of the negotiation.
As mentioned earlier my interviews did not give me the opportunity to explore this further, however there are other examples of ways in which guanxi is affecting business in China for example in the way that differences between the way of doing business in China and Denmark, which at first glance are not necessarily culturally grounded, such as differences in the way projects are run, the way decisions are made, the way you deal with the public system and thereby the speed with which things happen are all very much dependent this one cultural concept.
Even though the word guanxi is not mentioned explicitly there are strong indications in all three interviews that the company representatives know about and are very aware of the concept. The SDC representative for example says:
“I imagine that, in the long run, there is a great chance that this could produce collaboration between us
and them [one of the Chinese companies they visited]. But it is China, so we will need to cultivate the
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connection much more before this happens.”
(SDC: A2)
The ICDK representative agrees that the Danish companies that come to China are aware of this important cultural concept, but he adds that many companies still have a hard time building guanxi “…
most people know what it is – not everybody are good at it – but they know what it is.” (ICDK: A4).
Comments from the interviews such as the above quote from the representative of SDC, or the following quote from the BEC representative “[a very important thing] … is the mediating function where the consultant knows both Danish, Chinese and English and also knows about both Danish and
Chinese culture.” (BEC: A1) show the importance of having ICDK as a mediator between them and the
Chinese companies. This indicates that while the Danish companies are aware of the importance of guanxi in China, they have not got the time and or influence locally to build the connections themselves.
From a BRICBT perspective this is an advantage, because it creates a need to go on trips to China to create these connections, however from a business perspective this points toward another point in relation to cultural aspects in Chinese business tourism that came forward during the interviews – the contention that you need to be present in China to do business in China.
You need to be present in China to do business in China
The ICDK representative argues that:
“A very important thing is local presence, some have the possibility to be present here all the time, but local presence can also be local mental presence. With that I mean that one understands how things work
over here and that is, if not impossible, then at least very hard to do from Denmark.”
(ICDK: A4)
He thus argues that in order to be present in China you have to physically go there, either on trips similar to the BRICBT trips dealt with in Chapter 2 or on a more permanent basis. This is backed by all the three company representatives in the interviews for example the PCO representative mentions that:
“You should also do it [go to China] to show that you have the will to go out there. It is important that you are 100% prepared, because you only get the one chance, which is very different from doing business in
Denmark, where you often get a lot of different opportunities.”
(PCO: A3).
With this argument the PCO representative argues that it is not only for the sake of guanxi that you have to be physically present when doing business in China, but also because the competition and sheer speed of the development in the country makes it important to show that you are a hundred percent invested. This is backed by the ICDK representative who argues “For a Danish company this
[the competition and speed of development] mean that sitting in Denmark and trying to communicate
with a Chinese company via email can be very challenging.” (ICDK: A4). The SDC representative explains how they have realised the importance of presence and are therefore considering a more permanent solution.
“We have found out that presence is extremely important if you want to do business in China. Therefore
(…) the next step may be that we get an incubator out here and on the long run I expect that we (…) get
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our own little office here in Shanghai.”
(SDC: A2).
Cultural influence on business in China
Even though both the literature and my interviews indicate that culture is essential when doing business in China, there is also agreement that this is going to change within the coming years.
According to the ICDK representative this is due to the fact that China and the west are getting closer, so while China is gradually getting westernised the companies and people that visit and do business in
China are gradually becoming more aware of how to take the cultural implications into account.
“But generally there are just many more people who know what it takes to succeed over here than there used to be and many more Chinese who know how things are happening in the west (…) generally we just get closer to each other.”
(ICDK: A4).
This means that, as it is the case with many other things in the BRIC countries, the business environment in China is rapidly changing and therefore the cultural issues that are important now might not be as important or important in a different way in 5, 10 or 15 years. I will follow up on this point in a broader perspective in Chapter 4.
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Chapter 4
The wider implications of BRICBT
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In this chapter I will discuss the wider implications of BRIC business tourism, including the significance of the fact that new emerging economies may change approaches and strategies to business tourism products in general.
The past few decades have witnessed a substantial increase in business travel (Gustafson 2011:1). The main factors in this growth are new developments that follow globalization and expanding markets including “… growing numbers of multi-unit companies, new organizational trends such as networking,
outsourcing and work in project teams, and improved infrastructures for mobility” (Aguiléra, 2008;
Faulconbridge et al. 2009 in Ibid). Many researchers argue that this growing need for physical presence in other destinations and thereby business tourism is supported by a growing need for virtual meetings via telephone, video and web. (Gustafson 2011:2; Jones 2007:224). Even though most researchers agree with this assessment some also argue that the new methods of communication will, in the long run, limit business tourism because only “… a fraction of face-to-face encounters may involve
physical travel.” (Aguilera 2008:3).
In Chapter 3 I argued that, in the case of China, it is necessary to be present in the country to do business in the country, if this is true for the other BRIC countries as well, which could very well be the case since similar cultural differences are at play there (Xin & Pearce 1996:1642) and it is also true that new media will, to some extend, limit business tourism in the more traditional business tourism destinations in the US and Europe. Then one can argue that business tourism is currently undergoing a big change where the traditional business tourism destinations are losing ground to the new emerging economies. According to research on the geographic spread of business tourism this is actually the case as Europe while still being the dominant player according to WTO has seen the most marked decline in recent years reflecting growing competition from emerging destinations such as China and
Dubai (WTO, 2006 in Byrne & Skinner 2007:56). This is backed by Frank and Robert who explain that
“Although North America’s share is still increasing, its absolute amount of meetings has dropped since
1993. Only the Asian continent shows figures of constant expansion.” (Frank & Robert 1999:39).
Although I cannot prove that the cultural differences mentioned in Chapter 3 are influencing this move,
I will argue that, along with the fact that the emerging economies in Asia are generally taking business from the west, there is reason to believe that the difference in culture makes it relevant and important for western companies to go to Asia to meet face-to-face and therefore choose to save time by clearing domestic or west-to-west encounters, where the risk of misunderstandings is smaller, over phone, conference call or similar technologies.
No matter what provoked the move from west to east when it comes to business tourism the fact of the matter is that business tourists that went to western countries before are now going to Asia instead. And although one should take into account that the economic growth of the BRIC countries does create additional business tourism internally and between the BRIC countries, it is still an issue for the western countries that they are no longer experiencing the same rise in business tourism that they used to. This move thus calls for new business tourism strategies from the western countries in order to get business tourists from the BRIC countries to come to these destinations, but also to keep or reclaim the local business tourists who are already going or considering going to Asia instead of business tourism destinations in the west. At the same time this move also demands that the BRIC countries adapt to their new role as business tourism destinations and provide the facilities that this role entails.
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I will argue that in the making of these new strategies both the western and BRIC policy makers and others who have interest in creating business tourism must be aware of one of the conclusions that I made in Chapter 2 - that business tourism is not only about business in the sense of trading or commerce, but also about learning. Because, while the discussions in this assignment has indicated that Danish companies want to learn about how to do business in China and how to do successful business trips to China, I will argue that there is a good chance that this also works the other way around - meaning that business people from the BRIC countries might also have an interest in learning about how to overcome cultural barriers and conduct business in the West. Another argument in this respect is that one of the reasons why they chose not to go to the West for business is that they are afraid because they do not understand it. If this is the case, then more focus on the learning aspect of business tourism could potentially assist in creating business tourism from east to west.
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Chapter 5
Conclusion
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My discussions in this assignment indicate that there are big differences between TBT and BRICBT, both in terms of the way it is perceived, researched and the way it is conducted. One of these differences is in the importance of the learning aspect in business tourism. Thus while one of the most important aspects of BRICBT - even though the main motivation for going is something different - is learning about how to do business in the BRIC destination, as well as how to act when one is conducting BRICBT. This aspect seems to be either unimportant to or simply ignored in the literature on TBT. One of the main reasons for this difference is in the importance of cultural differences when conducting business tourism in China, which this assignment also point toward.
In my discussion of the importance of culture when doing business in China I found two culturally grounded contentions, which seem to be very relevant when conducting business tourism in China:
“You need to understand China to do business in China” and “you need to be present in China to do business in China”. In the discussion of these contentions I found that it is essential to understand and accept that “China is different”. One of the most important differences is that business in China is heavily affected by culturally grounded concepts such as guanxi. Thus I found that this cultural concept affects business related subjects that would not normally be regarded as culturally grounded and also demands physical presence from the people who wished to do business with Chinese companies.
Another conclusion to this discussion was that the speed of development in China and thereby in the business environment makes it so that the cultural issues that are important now might not be as important or important in a different way in 5, 10 or 15 years. This changing nature of the cultural aspects is also present in BRICBT in general, which means that there is a tendency for repeat visits to the same destination in the BRIC countries because of the need to stay updated and learn more about the destination. This is contrary to TBT where for example meetings and conferences are often one time affairs.
Another difference between BRICBT and TBT that the discussions pointed toward is in the focus on the destination. BRICBT thus seems to be more dependent on the destination that the tourism is conducted in than TBT. This shows in the way that TBT rarely deals with specific destinations but instead focus on the business tourism type. This means that while the BRICBT tourists and therefore the research in this area is focussed on how to best utilize the BRIC destination in the development of their business, TBT deals with which destination that can provide the best conditions – often functional or practical – for the meeting, conference or other business event that needs to be held.
This difference in focus indicates that BRICBT is a new destination dependent type of business tourism that should to be researched on its own merits and in a way that is very different from TBT. Another important conclusion in relation to research on business tourism is that the personal motivations of the business traveller is rarely researched and if they are, the fact that the employee is representing the company might make them give answers that reflect the needs of the company more than their own needs. At the same time this is also an important point in relation to culture in business tourism because Chinese company representatives sees it as natural and essential that individuals are seen as individuals as well as company representatives. This cultural difference might thus make it so that western businessmen’s way of acting might seem unearnest to Chinese as they try to hide their personal agenda, while the Chinese businessmen might seem corrupt to the westerner because his personal interests are an integrated part of the negotiation.
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From my discussion on the wider implications of BRIC business tourism I can conclude that business tourism is currently undergoing a big change where the traditional business tourism destinations are losing ground to the emerging BRIC economies. Although I cannot prove that the mentioned cultural differences are influencing this move, I can conclude that this assignment point toward the cultural differences as an important factor in this, because they make it relevant and important for western companies to go to Asia to meet face-to-face. This discussion also suggested that the move from the traditional business tourism destinations to the BRIC countries calls for new business tourism strategies from the western countries as well as the BRIC countries. It was thus suggested that the western countries should consider the mentioned cultural implications as well as the importance of learning in business tourism in order to regain territory, as the potential business tourists from the
BRIC countries might very well be facing the same challenges that the western business tourists do, when entering a business culture that is vastly different from their own.
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Appendix
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Appendix 1: Meaning condensation – Big Electronics
Company (BEC)
Will you begin by explaining a bit about your company and your role in the company?
BEC is a GTS institute (Godkendte Teknologiske Serviceinstitutter) located in Denmark with 280 employees. They also have a number of smaller offices around Europe, but they do not yet have offices outside Europe.
BEC works with high-tech products.
The representative works with business development, and among other things he works with international activities including how they can expand to other countries.
If you are only in Europe then what is your connection to Shanghai or China?
“We decided that we wanted to invest some money in an effort toward China, primarily toward Shanghai.”
Can you start by describing how your innovation tours normally run?
The first trip was very explorative and the following trips was more directed toward a certain goal.
“For us it is about lining up as many possibilities as possible and getting hands on experience with a
Chinese organisation and to gain knowledge and understanding of China, so that we can find out what is possible and what isn’t. There are also practical aspects and issues which are hard for us to do without help. This is both internally in China and in the meeting with the Chinese organisations, which is also hard in spite of the fact that they say that they speak English.”
Is it mainly the language barrier that you are referring to here or?
“Yes and also the information that is provided is not in English which makes it hard to plan ahead and it is necessary to plan ahead if you want to achieve something from the trip.”
So is the main reason that you use a partner for your trips that you need assistance in the planning process or is there also other important factors?
“There are certainly also other important factors!”
“Initially it was mainly the planning and safety aspects, but later it showed that it made the interaction with the Chinese companies and organisations much easier to have a person who speaks both Chinese and
English with us who can clear up misunderstandings.”
“So there is both a practical advantages, advantages in the mediating role and then there is also advantages in the discussions and feedback from the consultant.”
“This involves discussion of ideas for upcoming meetings or how to use what we have learned, but
generally discussions and ideas before, during and after the meeting.”
Have you done similar tours in other countries outside of Europe?
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“No, but we are planning to do it in the US as well, from the beginning of January.”
Why was it China that you choose to begin with?
“It is an important market, and many of our customers are moving to China. So in order to follow the concept – follow your customer – we had to do it.”
Is there a specific reason that you choose to do it at the point that you did?
“No, actually it is maybe a - better late than never - situation.”
What has your general experience with the tours been?
“It has generally been very positive”
“It has been a compilation of impressions which are hard to describe. But it has both been exiting and we have learned a lot and we have also gotten everything out of it that we hoped for.”
“Of course it would have been nice if we had some actual orders by now, but it has given us important knowledge and a much more focussed approach”
“For example we now know that we have to be more established in China if we want to make big sales specifically if we want to sell some of the chip solutions that we design and sell.”
“We also learned that there are good opportunities to do cooperation on research, and I hope that this cooperation will start in the beginning of next year. I am quite sure that this is going to happen.”
What would you say have been the best and the worst elements of the tours?
“The best has been that the planning has gone very well. We have had time to do the things we wanted.
And the things that we were not able to do, you have done.”
“It’s hard to put it in words, but all the things that it is hard to do from home, taking contact to the people that you are meeting with, making a programme for the trip, finding a driver, finding a hotel – all the practical things. And then there is the second things which is the mediating function where the consultant knows both Danish, Chinese and English and also knows about both Danish and Chinese culture. The last thing is the professional discussions that you have with the consultant during the trip.”
“The innovation center has also been good at bringing up things themselves and being proactive, which gives a better result.”
Does it make a difference that you are using the Innovation Center in a Chinese context?
He explains that the main difference is that for example in the US, because the language barrier is not there and cultural differences are much smaller, they focus more on the network and personal qualifications of the consultant than they do in China.
So is network more important in China?
“Network is always important, but in this case the network is more important in the US than it is in China, because it is easy for us to book a hotel, a plain and take a taxi there.”
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Is there specific things about the business culture that you should be aware of when doing business in China?
“It is important that you act the right way in the context when something at stake”.
Appendix 2: Meaning Condensation – Small Design
Company (SDC)
Interviewee: CEO and Founder of the company
SDC is a smaller design company with around 15 employees based in Copenhagen.
What was your main motivation for going on the trip?
The main purpose of the trip is to meet with different companies to evaluate on former projects, cultivate connections and create new leads.
What would you rank as the most important factors when going on such a trip?
It is very important that you there is an actual reason to go. It is very time consuming and expensive for a company such as theirs to go on a trip like this and therefore it is important that there is a visible outcome of the trip. They feel that this is the case when they go on an innovation tour and therefore they have done it many times.
Why did you choose to do an innovation tour?
The main reason that they go on innovation tours is because it is necessary to be present if you want to do business in China.
”We are very aware of and speculate in the benefits in the fact that it is the Innovation Center that takes the contact in the creation of knowledge instead of us directly. Because I do not doubt that doors are opened by having this mediator between us and the Chinese company. We are extremely aware of the importance and advantages we get from this”.
”I also feel that it creates advantages in the processes, if we for example are in a negotiation process.
Then the fact that we have the consultant from the Innovation Center who knows how to talk to them, not only because of the language but also, just knows how one should talk to Chinese businessmen and she has an understanding of how they stand on a topic that we don't. Where, if we were to meet directly, it would be too hard to understand”. That mediating function makes the connection more smooth and gives the opportunity to get under the radar and I think that is very important, especially when you are not too
experienced with what to do in these situations.”
When asked whether it is the cultural aspects or the fact that it is the Danish state that takes the contact, that creates the advantage she answers:
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“It’s is clearly a combination! Because when you come from the Innovation Center, you represent the
Danish state. And when the consultant takes the contact and show her businesscard with the little crown on it, then there is never any doubt that they will take you seriously and that is obviously a huge advantage. And at the same time it is an advantage in the process that you have a person who know the
Chinese culture and the business culture as well as the western culture and business culture and knows how to deal with and read the Chinese business people, this mediation between us really smoothens the process.
What has your overall experience of the Innovation Tour been?
She explains that the overall experience has been really positive. On this trip they have actually not had any experiences that they would have been without. There has been three specific highlights:
The first highlight was a meeting with a company that they had never met before. “We had a fantastic
meeting with a company that we have never met before, we had a very positive dialog” During the meeting it turned out that the Chinese company had needs in the specific areas that the Danish Design
Company deals with. “I imagine that, on the long run, there is a great chance that this could produce a collaboration between us and them. But it is China so we will need to cultivate the connection much more before this happens.”
The next highlight was an evaluation meeting where they evaluated on a project that they got on a previous innovation tour. “Evaluations with our costumers is always a highpoint because you see your work come to life, so that was of course very positive.”
The third highlight was their second meeting with a company that they visited on an earlier tour. This meeting produced a project that it is very likely that they will get, even though they are competing with a local company about it. On top of this there is a good chance that this project will lead to an even bigger project in the future.
Did the tour live up to their expectations?
They feel that this trip has really lived up to their expectations.
The representative explains that the meetings are very different and produces different results, but they also have very different expectations for each meeting.
On top of this they have also learned more about how a trip like this should be and especially learned to be more focussed on specific things instead of going at it from a very broad angle.
What do you take home from the tour?
The representative explain that this has not in any way been a sightseeing trip, they bring home deals, new knowledge about how to deal with business in China and inspiration for new projects in China.
If you go back in time to when you did your first innovation tour, then what would you have wanted from such a trip?
She repeats the importance of not “shooting to broadly”. “For a smaller company like us it is easy to think that there are a thousand opportunities, but it is all about being focussed. It is better to do one thing
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and keep doing that, if that is what you think is the right thing to do – one industry, one offering, one service, one product – bet on that, focus on it and gain more knowledge about it. That is what we have learned. This also makes you more targeted in your preparation for the trip, however the question is whether you can identify this as soon as you arrive.
What is your future in China
“We will continue our business here, that’s for sure! I think we will start thinking about what our next step is. We have found out that presence is extremely important if you want to do business in China.
Therefore we have started using Innovation Center Denmark’s Virtual Account Manager (A consultant from Innovation Center Denmark, who represents the company in China red.). The next step may be that we get an incubator out here and on the long run I expect that we at some point will be ready to fly
from the nest, so to speak, and get our own little office here in Shanghai.”
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Appendix 3: Meaning Condensation - Public
Consultancy Organisation (PCO)
Will you begin by explaining a bit about your company and your role in the company?
PCO deals with public trade promotion and aims to help companies in the identification of growth barriers and in the process of transforming challenges into possibilities.
Can you start by describing the nature of the Innovation tours that you have done?
They have been here with different companies from the local region that they are from. They have been on two trips this year. Their organisation has been on similar trips before, but the companies that they have brought with them have not.
What was the purpose of the trip?
The overall purpose for the trip was that the head of the region should sign an updated version of a friendship agreement with the Zhejiang province. A big group of representatives from the Region participated in the trip and her organisation was invited as a representative of the business community in the region, so they can handle the cooperation between the Region and the companies in
Zhejiang province.
The purpose for the companies was to meet and network with other companies.
What were the expectations for the trip?
The expectations were, according to the representative, to meet the Regions many contacts in Zhejiang province, so that the public organisation that she is representing can use these in the future. The trip was according to her a success because of the good programme for the trip and because they now know more of the people that the Region has known throughout the years.
The companies went in expecting that it is very hard to do business in China, however they were surprised to find out that it is not necessarily that hard.
Why did you choose to do the trip to China and not another country?
The main reason that they went to China is that it is on the agenda for both the former and the current government as an important export market.
Can you explain why you chose to go on an innovation tour and not just cooperate from home?
Because it is necessary to go out and “See what China is”. Many different factors can be decisive, but often it comes down to a gut feeling.
You should also do it to show that you have the will to go out there. It is important they you are 100% prepared, because you only get the one chance, which is very different from doing business in
Denmark, where you often get a lot of different opportunities.
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What is your take away from the trip?
We are very positive about the trip because it created a super outcome – all the companies learned from the trip and most of them took concrete deals home.
Aside from this many of the companies learned how easy it is to manage oneself in China.
For this reason the trip also lived up to the expectations. In particular a presentation at Innovation
Center Denmark, where the consulate participated gave very good insight and a wow experience over the opportunities.
She mentions that there is also a danger in the opportunities since many Danish companies potentially can drown in all the opportunities.
Experiences after the trip – Is there concrete things that you will highlight as important when doing business in China?
The Danish companies need to understand that you have to go out there, it is not possible to do it from home.
When you are in China you have to act on their premises – culturally. It is details but it has a big influence.
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Appendix 4: Meaning Condensation – Innovation
Center Denmark (ICDK)
Can you begin by explaing about what you do at the innovation center?
Works as Innovation Consultant
Is in the commercial department of the Innovation Center.
Works with Danish companies who want to go to China or wants to work with China, within the areas of Innovation and high-tech.
More specifically he works with ICT
The tasks that he works on depends on what company he is working with. He works a lot with SME’s, but he also works a lot with bigger companies, especially the ones that are already established in China.
Can you begin by describing the history of the Innovation Tours
“One of the functions that the Innovation Center has is to create Danish innovation in China and to promote Denmark as a knowledge society. But I also think it is to help Danes and Danish Companies to
understand how innovative China is and what we can learn from China.”
The consultant explains how many Danish companies want to go to China for innovation purposes and their time limit is often one week. This means that an Innovation Tour often is one week where the company visits China and participates in different meetings and arrangements that the innovation center helps to arrange.
“These tours gives the Danish company or organisation the possibility to take home knowledge or get
inspired and use what they have learned when they get home.”
They have done this many times in many different ways. They have made tours for groups of public companies, and group tours for private companies where they have a certain focus for example Green
IT og Sound Technology and then they have a group of companies with interest in this area. It can also be for individual companies. This could either be bigger companies where they think that the managers should visit China in order to better understand the country or a specific product development team that needs to better understand the country. It could also be SMV’s they are often out to get orders or projects in China.
“That is the history of it and it is like that because we are here and we know that a lot of exiting things are going on in China and with the tours we try to get people out here to see this with their own eyes.”
Can you explain how you are connected to the Innovation Tours?
“I have done these tours quite a lot of times. And I can see that there is great effect in having people who have heard of China from others or in other ways, come out here and see these things with their own eyes
– this must not be understated. It is very useful to go out and see Chinese companies that has a growth of
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30 – 40%, companies that handle R&D in a totally different way, universities that work in totally different ways.”
“But we have also often seen companies that come out here, have a great week, but then nothing happens when they go back. Because they don't know how to utilise all this input.”
They don't know how to use what they have learned. They see a company with 35% growth and 200 engineers but they don't know what to do with that information when they get home.
This started a discussion of how to get more out of these tours and this was where I, along with other people at the innovation center began to take interest in how we could expand this concept.
Is there any specific things that you will say is most important when doing business in China?
“A very important this is local presence, some have the possibility to be present here all the time, but local presence can also be local mental presence. With that I mean that one understands how things work over here and that is, if not impossible, then at least very hard to be from Denmark.”
“It’s best to be here, but at least you have to know what is going on here.”
He explains that another argument for coming out to China is that you have to understand that “China
is different!”. He continues to explain that this is not only cultural differences in that you have to hand over your business card with two hands and so on.
“But for example to understand that China develops much faster, which means that things are happening in a very different way.”
“It could also be that you often receive a lot of funding”
“It can also be negative in the way that the many possibilities makes it so that the companies are often in a hurry. For a Danish company this means that sitting in Denmark and trying to communicate with a
Chinese company via email can be very challenging.”
“It is very important to come over here and understand that things do not work as they do in Europe or the US and you have to accept that. It does not mean that you have to be a China expert when you come here in order to succeed, but it demands that you are aware of it and act accordingly.”
Is this the case for everyone?
He explains that he thinks that it is generally relevant for all although there are certain business areas where it is not as interesting. He mentions that it might not be as relevant to some big companies who run their business in a specific way all over the world.
For other companies it is very relevant. For example if you want to sell to Chinese consumers and especially if you have to deal with the government.
Can you give a further explanation of what is important when dealing with the government?
“There is another business culture here and another way to run project. For example personal
connections and the concept of Guanxi is very important.”
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“But also – who takes the decision? – Chinese companies can be very hierarchical.”
He explains that these things can be relevant for some companies while many others are used to deal with western companies and these problems therefore are not relevant for them.
“But the government and the public system is still very Chinese in the way that it can be very hard to see who takes the decision. Decision making processes can therefore often be parallel where you have one person that you talk to and he is the one who runs the project, but it is really his boss that you have to convince.”
“In the same way if you walk with companies who are close to public projects, then it may be the company that you are dealing with, but you really have to convince a public person because he might be sitting on the funding for the project. And he might not know that much about the technical aspects of the project”
“So if the thing you are interested in has a connection with the public sector and/or the government, which a lot has in China because they are very good at creating growth through public investment, then it is very important to know about or at least have an understanding of these processes. And a lot of foreign actors do not have this understanding”
Is the importance of the public sector also worked into the Innovation Tours that you are running?
He explains that it depends on each tour, but that they often make companies visit a public institution to try to gain this understanding.
If we want to show them what is different about the tour we often show the contrast by going from a very international Chinese company to a public initiative such as a university or a government funded research center.
Do you see any specific changes within the way you do business in China within the last 10 years?
He explains that it has a lot to do with experience. That there are a lot of Chinese companies who are getting more experienced with working with western companies and vice versa.
“Ten years ago we had to tell people a lot about for example, what is guanxi, which now can be a little cliché because most people know what it is – not everybody are good at it – but they know what it is.”
“But generally there are just many more people who know what it takes to succeed over here than there used to be and many more Chinese who know how things are happening in the west. Maybe they have done a lot of business with westerners or maybe they have studied in a western country. But generally we just get closer to each other.”
“It doesn't mean that all the challenges are gone, but it is moving in the right direction”.
“The fact that more Chinese companies are getting more international also makes them change their company DNA and they start to act in a different way”
Would you say that the number of companies that do trips to China is rising or falling?
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He explains that he thinks that it is rising, but also explains that it goes up and down. A big event such as the 2010 world Expo for example attracted lots of companies.
He explains that he thinks that the interest in China is rising and explains:
“What is changing is that before the companies thought – we have to go there and have a look because we know nothing about this. Now they come here with a more clear agenda.”
This is mostly the case for bigger companies, not the biggest ones, because they are already here, but the bigger companies, are now sending leader teams and management teams out here.
“They want to better understand what is happening here so that, when they make decisions for the company have a chance to think China into their decisions.”
“This is something that we have seen and something we will see more of.”
“I also think we will see more tours that can be characterised as a push with a more clear goal, for example for SME’s”
So what makes an Innovation Tour appealing is that it gives you the chance to make a push into the market?
“Yes, but the point we are trying to make is also, that if you take a week to go to China plus the long preparation that you need for a trip, you have to get something out of it.”
“So the question is how you get this value – who do you meet with and so on. Of course not everybody goes through the innovation center, when they come out here. And a lot of them have good trips, but it is also my experience that a lot of people come here to see something and meet someone, but do not get anything out of it because they don't know what they should see or who they should meet”
What makes them do it then?
“It’s the fact that you always hear China, China, Innovation, Innovation! You hear it all the time, so you feel that it is necessary to go and then you just go.”
“And it does not make it easier that it is China and everything is different, but if it was France, France,
Innovation, Innovation and I went there I wouldn't know where to go either. Maybe it would be easier for me to establish a network, but still.”
“The ones who succeed are the ones who has this network and who understands how to use it, but there are also many people who simply are not able to make such a tour work on their own.”
Would it also be easier in the US than in China?
He mentions an example: In Aalborg there used to be a big group of mobile developers all the way back to the 80s. They mainly worked with American partners and therefore the often visited the US for meetings and the like. Now they work other positions, but they still have connections over there and therefore they would probably be able to set up a tour in the US. Scenarios like this are true for many different Danish companies, but very very few of them would be able to do it in China.
“So without including the fact that China operates differently and that the US is very open in the way that if you know one person it will open a new network and so on and without looking at cultural differences.
If you only ask yourself, who would you begin by contacting? Do you have five people who you have good contact with? Do you know who the five biggest companies in this industry are? Do you know how the
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relation between the public and the private is within this sector? Do you know the best research groups within this area? If you do than you can make a really nice trip, but I would argue that most Danish companies do not know these things, of course more and more Danish companies know more and more, but it is still a few. And when you can’t do this you have a very bad basis for making this kind of trip especially if you want to create real value from it.”
So in 15 years an innovation tour to China will not be relevant anymore because this has then
happened?
“If things continue as they do now and China will be as open and will keep integrating internationally and globally and Denmark becomes much more aware of China. And we run these tours the next 15 years, yes then I think that people would be able to do this kind of thing on their own. And then the equivalent to an
innovation tour would be very different from what it is now.”
So it is not so much the issues related to of the business culture and guanxi that make you relevant as the mediator?
“I think it is an important thing, but I don't think it is the most important thing”
He mentions an example where you know a person at a Chinese university and have contact with him.
He argues that this connection in itself is the most important thing, much more important than guanxi or who sits where at the table.
“But obviously, this is also the case in the US, the better you are at acting in the business environment that
you are in, the better.”
But it is not easier to act in the US business environment than the Chinese?
“Culturally the business environment in for example Silicon Valley is probably closer to what we are used to and the language is of course a barrier, but for a person who have never been active in for example
Silicon Valley it will be much easier to go through a person who is active there and that is the same for
China.”
“But the biggest difference is that without having anything to do with the innovation environment in
Silicon Valley, I would probably be able to mention 25 companies and I would probably be able to come up with 15 researchers who it would be relevant for me to talk to, and they speak English, so if nothing else, I could at least call them and talk to them. I’m not saying that the success rate would be very high, but I would be able to do it, and very few people could do that here.”
He now asks himself the question – how do you get the most out of it? And this is where your experience doing things like this come in, and that is the case both for Silicon Valley and here.
“What will you for example get out of a visit to Facebook in Silicon Valley? If you have a good connection to them you might be able to get a little bit more behind the scenes and the some more. And that is also the case here. If we want to talk to a big Chinese company here in Shanghai we need think about whether we know them well enough for them to choose a representative they know is really good at explaining about the company or will it just be like a polished picture of how good the company is?.”
What would you say is the main expectation of your customers when going on an innovation tour?
“I think that one of the main issues is that the main expectation is not clear. Of course there is a main expectation that they want to know more about China. It’s of course different from time to time, but very often it is unclear what they want to achieve with it.”
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How about when the tour is over and they go home, are they satisfied then, if they did not really know what they wanted?
“I think it’s hard for any company to go to China and come home and not say “wow that was really exiting”
“China is not five years behind anymore” “wow that big company had so many employees in R&D” …”
“And the question is then what do you get out of that. And that's where we often think, that they get too little out of it.”
If we take a look into the future – you say that the innovation tours are important, but at the same time you say it is probably irrelevant in 15 years, so how do you see the next five years?
“Five years ago Shanghai and China was still very exotic and therefore there was a need for tours where you had people who were interested come out here and introduce them to China. It was about making people aware of it and talk about it.”
He explains that people now know this – they know that China is important and they know that they need to go there. He mentions that this is not the case for all companies, but a lot of important companies.
“What needs to happen now is that private and public companies as well as networks etc. need to be more targeted in their approach to China. So it might not be necessary to take a tour over here just to look”
He explains that it is important that the companies have thought about what they want from the trip before they go. They need to have questions, focus areas, specific contacts that you want. It could also be that you have a feeling that you should do this and this in China and you use the trip to find out whether you should do it. It is also important that you conclude and make what you have learned into something that you can use.
“So its three steps: Prepare – what do you want from the trip, what is your expectations, what are your goals? Execute – a solid, high quality programme and finally Conclude. And what we want to do is to
make companies realize that the goal of a tour like this should be the basis of a China strategy.”
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