1. No category

ECONOMIC DEVELOPMENT,
EMPLOYABILITY, SKILLS,
TECHNOLOGY AND TALENT
MANAGEMENT IN HANGZHOU AND
ZHEJIANG PROVINCE
BRITISH COUNCIL APRIL 2011
Professor John Shutt, Leeds Business School, Leeds Metropolitan University
Professor Paul Iles, Salford University Business School
Xiaoxian Zhu, PHD Student, Salford University Business School
1
2
Programme
2005-06
2006-07
Undergraduate
17
2007-08
2008-9
2009-10
2010-11
10
24
59
99
19
42
23
58
14
83
39
154
BAH Accounting & Finance
23
BAH Business & Management Studies
Total Chinese Undergraduates at FBL*
7
45
MA International Business
MA International Trade & Finance
MSC Management
Total Chinese Postgraduates at FBL*
40
15
2
115
24
9
4
61
23
28
7
82
18
54
3
94
19
44
6
105
11
54
10
113
Total Chinese Students at FBL
160
109
124
152
188
267
8
48
Postgraduate
Source: Leeds Metropolitan Planning & Registry, April 2011
3
CHINA: The Changing Student
Agenda 2011-2020
 China continues to attract more international students
•
Both the number of Chinese students studying abroad and the number of international students
choosing China as a study destination has increased, according to data released by the
Ministry of Education earlier this month.
•
In 2010, the total number of Chinese students studying abroad was 284,700. But perhaps more
interesting to the UK audience is the growing ability of China to attract more international
students than ever before, with 265,090 choosing to study in the country. Those students come
from 194 countries and attend 620 colleges, research institutes and other educational
organisations in 31 provincial regions in China.
•
Students from neighboring Asian countries accounted for 66% of the total, followed by
European, American and African students. More than 22,000 international students received
Chinese government scholarships in 2010, representing a 23% increase.
•
South Korea, the United States, Japan, Thailand, Vietnam, Russia, Indonesia, Kazakhstan and
Pakistan were the top 10 countries that sent the most students to China.
•
The Ministry of Education reportedly has plans to attract 500,000 international students by
2020, which would make China the top destination for international students in Asia.
•
HE International Unit 2011
4
British Council: ZJUT/ Leeds
Metropolitan Research Project
• To map the changing employment and skill needs of Hangzhou
city and region
• Develop new approaches to enterprise education appropriate to
the Chinese context
• Map the needs of CPD provision in Hangzhou
• Identify key economic and business issues to be addressed to
further the relationship between Zhejiang and Yorkshire, Leeds
and Hangzhou
• Plan new developments, partnerships and innovation education
courses for 2008-2011
• Deepen and adapt the delivery and content of our MAITF Course
to emerging concerns and facts on the ground.
5
Summary
• Introduction
• China’s economic growth, a new stage of
domestic development
• Zhejiang in the Yangtze River Delta
• Hangzhou City and New High Tec Growth Zones
• Company Case studies
• Talent management and talent shortages
• Conclusions
• The British Council Zhejiang University of
Technology/Leeds Metropolitan University
research project
6
China’s Economic Growth
Source: L. ZHANG Foreign Direct Investment and the Formation of
Global City-Regions in China, Regional Studies, Vol. 41.7, October 2007
7
The Yangtze River Delta
8
China’s Economic Growth
• China’s growth rate can be sustained in single-digit rates
for decades.
• China’s economic size will match America’s by 2035 and
double it by mid-century, with deep economic and
strategic implications for the rest of the world.
• China brings 760 million workers into the global economy
and has three of the main global city-regions.
Understanding how these city regions function is a major
task for Business Schools.
9
The Pattern and Sources of
China’s Economic Growth 1
• The most powerful force driving China’s economic growth is capital
accumulation
• The investment boom that has underpinned growth has been largely
financed out of domestic savings
• The second-contribution to growth has been made by Total Factor
Productivity ( TFP )
• Systemic reforms that released growth potential and improved efficiency.
• A Third contribution is the 4 trillion Yuan Fiscal Stimulus Package started in
November 2008 and leading to investment in infrastructure, housing,
railways, water, electricity, the environment and technological innovation.
10
The Pattern and Sources of
China’s Economic Growth 2
• The fourth factor is the supply of labor
• The pool of talented labour especially in engineering has allowed
China to transform many otherwise capital intensive productions into
labour intensive processes, breaking barriers to entry into value
chains. New industries like railway engineering and shipbuilding have
been developed in a short space of time(5yrs).
• There are new concerns however that China’s labour market and skills
development is not matched with the needs of the economy and the
need to build the service economy and the financial services
• There is a new search for talent management strategies for China and
for Chinese companies, many of which are growing very quickly and
require a highly skilled workforce
11
Zhejiang in the Yangtze River Delta
• YRD features a diverse set of industries of varied global connectivity,
capital and technological intensity, ranging from car production to the
garment industry
• Global-local economic connections run deep into the very bottom of the
local economy and far out to the geographic margin of the region
embracing adjacent regions such as Anhui
• Goods are made by a regional division of labour embedded in a regional
flow of raw material, intermediate inputs and transport logistics
• The province of Zhejiang has been the centre of private enterprise
development in China
• The province has a strong rural economy made of networks of SMEs,
mainly involved in the secondary sector
• The urban economy in Zhejiang is concentrated on heavy and advanced
Technology industries and increasingly the emphasis is on growing high
technology and financial services.
12
Hangzhou, Zhejiang
•
The capital of Zhejiang, is a cultural and tourist centre in China and has been
twinned with Leeds, UK since 1988.
•
Has one of the best scientific human capital stock in China and is ranked in the
top 5 investment destinations in China.
•
The IT and financial services sector is fast developing: Hangzhou wants to be a
major financial centre.
•
Aiming to be the “ Paradise Silicon Valley”, home of high technology in China.
•
The city has developed a strong culture of “industrial technology alliance”
between education institutions and firms, and between firms and there are
university spin offs in major growth areas e.g. Insigma.
•
Hangzhou technological and industrial developments rests on four key Nationallevel Development Zones and anew fifth zone with Singaporean investment.
•
Accelerated investment in Hangzhou Subway Project and Subway Line One to
open 2011 the biggest infrastructure project in the history of the city
13
TM Processes
Iles 2007
• Attracting talent: Branding, Matching
• Retaining Talent: engagement, psychological
contract
• Developing Talent: leadership development
• Transitioning Talent : deployment, promotion,
succession, lateral movement, exit
14
Drivers of TM
• Shift from industrial/ information age
• Intensifying global demand for high-calibre talent,
esp. managerial/professional
• Growing propensity to switch companies,
careers: talent loss/brain -drain
• Work-Life balance
• Demographic changes: e.g. ageing
(Michaels et al 2001)
15
Emergence of TM in China
1)Chinese labour-management system is currently in a
state of transition (Warner, 1997;
Shen, 2007).
2)Exacerbating shortage of talents speeding the pace of
adoption and discussion of TM.
3)TM has become the latest trend in China, particularly in
high-tech companies (Iles et al 2010 a,b; Preece et al 2010;
Hartmann et al 210).
16
Drivers of Talent Management in
China
• Shift from industrial to information/ knowledge age,
esp. high-tech companies
• Intensifying global demand for high-calibre talent,
esp. managerial/ professional.
• Generational Diversity: growing propensity to switch
companies, careers e.g. talent loss/rain-drain.
• Work-life balance
• Demographic changes: ageing workforce
17
Talent Shortages in China 1: Drivers
2
• Expatriates continue to fill many gaps; increasing
use of Asia-Pacific region and foreign-born
Chinese.
• Short-term solution: longer term problems, e.g.
high expense, need for localisation, perception of
emerging ‘glass ceilings’ by local Chinese staff.
• Senior managers expected to increase over the
next 3 years, with 67% expecting increases at
lower levels.
18
Talent Shortages in China 1: Drivers
• Shortage of talent holding back companies
• 2005 McKinsey : next 10-15 years Chinese companies
will need 75,000 globally-effective leaders to realise
global ambitions, but only 3-5,000 at present (Wilson
2008).
• Many leaders brought up in Cultural Revolution : despite
tenacity, relationship skills and hard work may lack
critical knowledge/ skills and experience in strategy,
innovation, enterprise and empowerment.
• Younger leaders may lack people skills; despite high
education may have received little management training,
with turnover often high (25% pa).
19
Talent Shortages in China 2:
Responses 2
• McKinsey: growing talent shortages in China and the
imbalance between business opportunities and the
supply of qualified managers and executives (Lane and
Pollner 2008)
• Growing need for talented managers: major challenge to
both MNCs and local businesses.
• 44% of Chinese executives: insufficient talent major
barrier to expansion
• Continued growth increases demands for talent when
MNCs increasingly competing with local firms for scarce
20
talent in same talent pool.
Talent Shortages in China 2:
Responses 2
• Mismatch, graduates and skills/ attributes
required by employers e.g. PMI2 study Iles,
Shutt & Zhu 2010
• Recruits often high expectations, and high
targets, leading to high turnover.
• Chinese companies increasingly looking
abroad to recruit talent; 43% of executives
expected proportion of foreign managers to
increase
21
Talent shortages in China 3: Talent
Development
• Mercer: 72% of respondents in China claimed main challenge
in staff recruitment was lack of qualified candidates in the
labour market.
• Key issue : how to develop and retain staff
• Management and leadership development of local staff a
priority
• Many companies lack commitment to develop a
comprehensive leadership development strategy, or expertise
to implement one (Wilson 2008).
• PM12 British Council research project, Leeds Metropolitan
University & ZJUT
22
Going Global
• “In areas that not only include solar panels but also wind
energy, telecommunication networks, power
transmission and high speed trains, Chinese companies
are already on a par with their western counterparts,
often after “re-innovating” technology sucked out of joint
ventures. What China lacks right now is not money; it is
technology.”
• Technology and talent management are linked
• FT January 19 2011
23
Company case studies 1
Company/ Sector
Name
Main Business
CEx
A
Advanced Manufacturing Sector
Supcon Group Co. Ltd
Specialises in process automation, public works and equipment
automation.
√
B
Advanced Manufacturing Sector
Zhejiang Hongyi Group Co. Ltd,
Xiaoshan Hangzhou
Main products of the company: basic fabric materials;
customers are exporting factories.
√
C
Financial Sector
CITIC Bank
State-owned Bank, HQ Beijing
√
D Environmental Industries
Xizi Group, Xizi United Holding
Corporation
Established 1997: elevator company Otis Ju. 2002 it acquired
Hangzhou Boiler Group 2006 property development
Hangzhou shopping mall.
√
E
Service Sector
Zhejiang Textiles Import and Export
Group Co Ltd, Zhejiang
Yuyang International Trading
Co Ltd, Hangzhou
Branch of Zhejiang Textiles I/E Group Corp. Zhejiang. Located
in Hangzhou, it specializes in functional fabrics.
F
Service Sector
Shinyway Overseas Studies: Kaplin
Shinyway Pathway College
Zhejiang
Largest educational agency with the longest history in China. It
takes “provide a good school” and “whole-course service”
as its criteria, and has helped more than 15000 students
to study abroad during the past 11 years.
G
Service Sector
Yuyang Intellectual Property Agency
Co. Ltd
Specializing in being a professional agency engaged in all
aspects of legal affairs relating to intellectual property.
H
Service Sector
Zhejiang Asuka Home Textiles Co.
Ltd
Established in 1997 in Hangzhou specialising in the
manufacturing, selling and trading of home textiles and
down products.
√
√
√
24
√
Company case studies 2
Company/ Sector
Name
A
Advanced Manufacturing Sector
Chery Automobile Co
Anhui
SOE
B
Advanced Manufacturing Sector/services
Alibaba Group Holding Group ltd
A company incorporated in the
Cayman Islands
CEx/hrd
Specialises in automotive manufacture. Formed 1997. has
branch in Dahlin and HunanChery has four brands of
Chery,Riich,Rely and Karry,four car plants and a central
research institute.
√
Established in 1999 by Jack Ma.Employs 30,000 of which 8000
on Hangzhou HQ
\database |commerce B2B co includes Taobao,Alipay and Ali
Cloud all focused on SME’s
√
State-owned Bank, HQ Beijing
√
Xizi Group, Xizi United Holding
Corporation
SOE
Established 1997: elevator company Otis Ju. 2002 it acquired
Hangzhou Boiler Group 2006 property development
Hangzhou shopping mall.
√
Sir Run Run Shaw Hospital
Established 1994 linked to American Loma Linda University,
Los Angeles and now employs 2700. Specialises in
micro surgery and funded ny Hong Kong media mogul
Sir Run un Shaw and owned by Zheijang University
School of Medicine
C
Financial Sector
Bank of Beijing
Hangzhou Branch
D Environmental Industries
E
Service Sector
Main Business
www.srrh.coml
F
Advanced Services
Insigma
www.insigma.com
G
Service Sector Propert development
Ascendas
√
Established 2001 and employs 4000. A leading global IT and
BPO service provider working on Intelligent \Cities.
Developed by professor PanYunle and owned by
Zheijang University and linked to IBM.
√
Developing the Singapore-Hangzhou Science and Technology
Park for leading IT,R and D and BPO enterprises. Set jn
the Hangzhou Economic and Technological Development
Area .
√
25
√
Company case studies
November 28th, 2010- The groundbreaking ceremony of 50MW
Solar Energy Tower-type Heat Generation Demonstration Project
invested by SUPCON Solar Energy Technology Co., Ltd. was hold
in Delingha, Haixi Region, Qinghai Province. Luo Chaoyang, Vice
Chairman of Political Consultative Conference of Qinghai
Province, officials of Qinghai Province, Haixi Region and Delingha
City, together with over 100 guests present at the ceremony. Jin
Jianxiang, President of SUPCON Group, Shi Yiming, Vice
President of SUPCON Group and Huang Wenjun, General Manager
of SUPCON Solar Energy attended this event too.
The 50MW Solar Energy Tower-type Heat Generation
Demonstration Project is China’s first commercially operational
solar energy tower-type heat power station, as well as the key
project of the new energy industry development in Qaidam Cyclic
26
Economy Pilot Area.
Company case studies
Alibaba's Jack Ma Fights To Win Back TrustGady Epstein, 03.23.11, 06:00 PM EDT
Forbes Magazine dated April 11, 2011Setting things right after a scandal at China's largest e-commerce
company.
http://www.forbes.com/forbes/2
011/0411/features-jack-maalibaba-e-commerce-scandalface-of-china.html
http://www.alibaba.com
27
ALIBABA.COM
•
•
•
•
•
•
•
Alibaba.com (HKSE: 1688) (1688.HK) is the global leader in e-commerce for small
businesses and the flagship company of Alibaba Group.
Founded in 1999 in Hangzhou, China, Alibaba.com makes it easy for millions of buyers
and suppliers around the world to do business online through three marketplaces:
a global trade platform (www.alibaba.com) for importers and exporters; a Chinese
platform (www.1688.com)for domestic trade in China; and, through an associated
company, a Japanese platform(www.alibaba.co.jp)facilitating trade to and from Japan.
In addition, Alibaba.com offers a transaction-based wholesale platformon the global site
(www.aliexpress.com) geared for smaller buyers seeking fast shipment of small
quantitiesof goods. Together, these market places form a community of more than 61
million registered users in more than 240 countries and regions.
Alibaba.com also offers business management software and Internet
infrastructure services targeting businesses across China, and provides educational
services to incubate enterprise management and e-commerce professionals.
Alibaba.com also owns Vendio and Auctiva, leading providers of third-party e-commerce
solutions for online merchants.
Alibaba.com has offices in more than 70 cities across Greater China, India, Japan,
Korea, Europe and the United States
28
CITIC BANK
• A new breed of Chinese Bank
• CITIC Group established in 1979
• State owned and tenth largest bank
• Listed on Hong Kong and Shanghai Stock Exchanges
• Central Party Committee and the State Council appoints Party
Committee of CITIC Group
• Striving to develop CITIC as a world class conglomerate
• Offices in Tokyo,New York and Kazakhstan
• Plays a key role in motivating fiscal stimulus package
29
Company case studies
Insigma Ranked as Leader in IAOP 2011 Global Outsourcing
100® Service Providers
A leading global IT and BPO service provider
Developed as a spin out from Zheijang University College of
Computer Science and Technology and the former President
of Zheijang University
Developing Intelligent City projects with Chinese local
authorities and regions
Alliance with IBM US
Developing Intelligent technology Parks, Intelligent
Logistics, Intelligent City Strategies
30
XIZI UHC
•
•
Xizi UHC is a large-scale enterprise with more than 11 billion CNY in asset and
nearly 7000 employees. The sales revenue in 2008 exceeded 12.5 billion CNY.
Insisting on “Capital Diversification and Product Specialization”, Xizi UHC
attaches great importance to the balanced development of R&D, manufacturing
and service. Our products include elevator and elevator components, boiler,
parking system, crane, steel structure, real estate, investment, general
merchandise and so on. Our subsidiaries include joint ventures like Xizi Otis and
Xizi IUK, which are jointly established through the cooperation with several
famous Global Fortune 500 enterprises, as well as several Chinese industry
leading companies, such as Hangzhou Boiler Group, Xizi Trust Tech, Xizi
Forward, and so on. We are ranked No.1 in global commercial escalator market
and in China domestic elevator component, parking system, waste heat boiler
industries.
•
Join ventire with Otis Elevator.
•
Has a Xizi United University and a XIZI research institute encouraging
technology innovations
31
Company case studies
Premier Wen Jiabao Encourages Xizi UHC to
Accomplish More No.1s
From June 25 to June 26, accompanied by Zhejiang Provincial Party Secretary Zhao Hongzhu, and Zhejiang Governor Lv
Zushan, Premier Wen Jiabao came to Hangzhou to investigate the current economic situation. He visited Hangzhou Xiangrun
Garment Co., Ltd., Alibaba Network Co., Ltd., Zhejiang Xizi Forward Electrical Machinery Co., Ltd., Zhejiang Hangcha
Engineering Machinery Co., Ltd., and Hangzhou Oxygen Plant Group Co., Ltd. In each company, he went to the workshop and
held discussions with management staff and employees to collect industrial information including fabric and garment, ecommerce and equipment manufacturing, etc, as well as the operation, research and development, and sales situation of the
companies. Later on, he chaired a meeting participated by chief leaders of Shanghai, Jiangsu and Zhejiang provinces to study
the present economic situation.
Zhejiang Xizi Forward Electrical Machinery Co., Ltd. mainly produces electrical machines for elevators. Its flagship product
named permanent magnetic synchronized gearless tractor features high efficiency, low power consumption and environmental
friendliness.
On the afternoon of June 25, Premiere Wen came to Zhejiang Xizi Forward Electrical Machinery Co., Ltd., and was warmly
welcomed by Xizi UHC Chairman Wang Shuifu, President Chen Xiaxin and other company members. After being briefed of the
company history, strategy, accomplishments and culture, Premier Wen was very pleased. He kindly asked questions to several
production line employees about their work. Then, he talked to people around him: “Just now, your general manager told me
about the four No.1s that Xizi has accomplished. You have good confidence. The company is far-sighted by focusing on energy
conservation, environment protection and improving product quality. You also did a great job in innovation. It’s good that we
produce products that other nations cannot produce, and produce better quality products than other nations. Xizi started from a
small factory. Now it has world-class products, technology and talents. I can see the company has a bright future. Moreover, the
company pays great attention to social benefits. A company should not only seek profit, but also serve the general public.
Worldwide competition is very fierce now. I hope you can accomplish more No.1s in the world and keep those No.1s.”
The words of Premier Wen are the recognition of Xizi UHC’s development, and also the inspiration and expectation for each Xizi
UHC member to work even harder and to make Xizi UHC the best company in the industry.
32
Company case studies
UTStarcom Announces a Proposed Reorganization to Change its Place of
Incorporation from Delaware to the Cayman Islands
http://www.utstar.com/
33
UT STARCOM (nasdaq:UTSI)
• A global leader in the manufacture of IP based
integration and end to end networking and
telecommunications solutions
• Customers include the largest service providers
in emerging markets
• Internet protocolTV (IPTV),Next Generation
Networks (NGN);Broadband
• Leading provider in Asia.
34
Bank of Beijing
•
•
•
•
•
•
•
Established 1996
Partner of ING Group and IFC
Branches in Tianjin,Shanghai,Xi’an
Shenzen,Hangzhou,Nanjing
Village Banks in Yanquing
2007 listed on Shanghai Stock exchange
2010 est first domestic finance company and life
insurance joint venture with ING
• Shift to Chinese Banking sector a priority
35
CHERY AUTOMOBILE
• 7th largest Chinese vehicle manufacturer based in Anhui Province
• Founded 1997 as a SOE and uses Volkswagen SEAT technology
• Top Chinese car exporter since 2003
• Technology alliances with AVL Austria (engines) and Bosch
(transmissions) and Fiat
• Aiming to produce electric vehicles and has JV with Israel and a new plant
opening in 2012 in Changshu,Jiangsu Province
• Wuhu Economic and Technological Zone established in 1993 as a state
level zone. Many component manufacturers located in Heifi HI-Tech
Industrial Zone. Hifei High Tec Park
• Awarded advanced zone status under the Torch programme 2003
• Strong links to Anhui University of Technology and Science in Wuhu
36
What is TM?
identification,development,engagement/
retention/ deployment of employees particularly
valuable to an organization, either because they
are ‘high-potential’ or because they fulfil
business-critical roles (Tansley et al 2007 CIPD)
37
Conclusions and Implications
•
Chinese Business Schools and British Business Schools need closer
understanding of their respective partners economies and needs
•
Greater policy understanding is required eg. Importance of the Torch programme
•
Most Chinese companies in our survey complained that graduates needed more
company training and orientation, as at university they do not develop the skills
needed in the company workplace some had established their own Universities
internally
Our project experience reveals that there is little in the way of systematic
forums through which labour market needs and skills considerations and the
implications of globalisation can be considered between Chinese Business
Schools and Chinese Business and greater understanding reguired of SME’s and
SOE needs
Although Chinese government encourages collaboration between universities and
businesses, but collaboration with ZJUT for example, in the non-scientific and
technical fields of management and leadership is limited. Much collaboration has
been technology driven.
Much needs to be done for the 2011-2015 period to develop collaboration and
development on key issues in management education and graduate employability.
There is a need to consider how to develop this work in the current environment as
well as the need for more consistent student survey and feedback for international
38
students to enable courses to be monitored, evaluated and improved and graduate
destinations to be understood.
•
•
•
•
What are the issues?
•
•
•
•
•
•
•
•
•
Employer engagement underdeveloped
Graduate destination surveys underdeveloped
Applied Research underdeveloped
Cultural Awareness matters- more required
Internet and Computing less interactive and needs
developing
Established Partners – long term plans are essential
Leveraging additional funding important
Developing trust is critical. Many dinners!
BS Research on high technology growth sectors and
companies is underdeveloped and needs more support
39
References
• Hartmann E., Feisel, E., and Schober, H. (2010), ‘Talent management of
western MNCs in China: Balancing global integration and local
responsiveness’, Journal of World Business 45,2, 169-178
• Iles, P., Chuai, X. and Preece, D. (2010), ‘Talent Management and HRM in
Multinational companies in Beijing: Definitions, differences and drivers’,
Journal of World Business, 45,2,179-189
• Iles PA and Yolles (2006) Culture and transformational change with China’s
accession to the WTO: the challenge for action research Journal of
Technology Management in China vol 1, no 2, 147-158
• PMI2 (nd) The Prime Minister’s Initiative for International Education
http://www.britishcouncil.org/learning-pmi2-fe-funding-opportunities.htm
• PMI2 (2008) China Briefing University of Wolverhampton, 10th July 2008
http://www.britishcouncil.org/eumd-pmi-china-briefing-2008.htm
• Preece D, Iles PA and Chuai X (2010) Talent management and
management fashion in multinational corporations in Beijing International
Journal of Human Resource Management (in press)
• Shutt J & Cheng H ( 2009) The changing Chinese economy: a case study of
Hangzhou Regions 275, Autumn, 5-9
40
• Zhu X,Iles.P,Shutt J(2011) Journal of Chinese Entrepreneurship.
THANK YOU
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