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  • Peter Sands, Robert Diamond on the Global Economy

    Where is the global economy headed in 2010, and is the financial crisis really behind us? Two banking heavyweights, Barclays president Robert E. Diamond and Standard Chartered CEO Peter Sands, give their take to NEWSWEEK's Stefan Theil. Excerpts: ...
  • Reverse Innovation Powers Globalization

    What do a $2,500 Tata Nano, a $250 Acer Netbook, and a $1,000 General Electric handheld electrocardiogram device have in common? According to Vijay Govindarajan, a professor at Dartmouth's Tuck School of Business, all three are examples of "reverse innovation"—a concept that's becoming the next big driver of globalization. "Historically, American companies innovated in the U.S. and took those products abroad," says Govindarajan, who coauthored a Harvard Business Review article on the idea with Dartmouth colleague Chris Trimble and GE chairman Jeff Immelt in October. "Reverse innovation does the opposite: companies now innovate in poor countries and bring the products to the U.S."Because they're designed for emerging markets, these products—like the Nano, a tiny automobile designed for India, or the GE EKG, priced far below a conventional unit—are dramatically less costly, making them appealing to frugal consumers in developed countries. Reverse innovation will also grow as...
  • Google's Eric Schmidt on China and Censorship

    Google CEO Eric Schmidt has long defended his company's decision to do business in China despite the restrictions that Beijing imposes on Internet freedom. Nevertheless, last week the company abruptly threatened to pull out after suffering hacker attacks believed to have originated in China. Schmidt explained why to NEWSWEEK's Fareed Zakaria in an exclusive interview. Excerpts: ...
  • Geithner Under Fire for Fed E-mails to AIG

    Criticism has dogged the Treasury secretary for months. Now newly uncovered e-mails indicate how the New York Fed, under his tenure, directed AIG to keep quiet about its disbursement of $62 billion in bailout funds.
  • An Audi for the Road That Drives Like a Race Car

    The new year always brings with it automotive nirvana: a rash of new vehicles that are quicker, prettier, and more fuel-efficient than the previous year's. For 2010, one standout is the Audi R8 5.2, a raucous V10 that's as fetching to look at as it is agile to drive. At first glance it appears to be a race car: angular, low riding, and with a track-eating 5.2-liter, 525-horsepower engine under a transparent cover in the rear.The R8's superior handling comes courtesy of a midmounted engine that gives excellent front-rear balance to the car, a delightful attribute that I experienced on a recent ride around a racetrack. All-wheel drive with rear-end bias also contributes to greater traction. But it is the Audi's engine, purposely built with a racing spirit—it's the same powertrain that propels the R8 LMS GT3 race car—that makes this two-seater so quick. And yet the R8 5.2 rides smoothly enough to be an everyday driver. A button takes the suspension from a softer "normal" setting to a...
  • Is Carbon Regulation Good for Business?

    Cap-and-trade opponents have tried to portray the legislation working its way through Congress as bad for business. The U.S. Chamber of Commerce says it would set off a "catastrophic cascade" of lawsuits and "choke off growth"—and some economists say that the House bill, if enacted, would shave 1 percent off GDP growth in the near term. But carbon regulation is coming—the EPA last month declared greenhouse gases a danger to public health—and some believe CO2 emissions are poised to become a key performance indicator, like cash flow or supply-chain efficiency. IBM is betting the new rules will boost its business. Since 2007, the company has helped 3,300 companies reduce energy use by an average of 40 percent. Most recoup their investment within 18 months, according to IBM. "For every dollar saved on energy, there's an additional $6 to $8 in operational savings," says Rich Lechner, IBM's VP for energy and environment. Just as firms like SAP made billions in the 1980s and '90s selling...
  • Small Banks Gone Bad

    Of the companies that took TARP money and owe the Treasury a quarterly installment, most have paid on schedule—but the number of banks missing deadlines is on the rise. Small banks at riskTwelve banks have missed three straight payments. The delinquent institutions tend to be small and regional. Many giants, like Goldman and B of A, have paid off their TARP loans fully. An exception is CIT Group, which got $2.3 billion and filed for bankruptcy Nov. 1.
  • Small Business Makeover: How to Manage Growth

    It's hard to complain when your company grows by more than 1,300 percent. But for Clear Align, a maker of surveillance equipment for the military, success is proving to be difficult to manage.
  • Chinese See Environment As Biggest Security Threat

    What does China see as its greatest threat? Beijing may finger the U.S., but a new poll of Chinese public opinion shows that people on the ground are more worried about the environment and domestic woes than geopolitical enemies.Conducted by the Lowy Institute for International Policy and the MacArthur Foundation, the study found that three quarters of Chinese pointed to environmental problems such as climate change as a major threat to China's security, while 67 percent cited water and food shortages, and 58 percent said internal separatists. Only half of respondents thought the U.S. posed a security threat, and 45 percent still worried about Japan (though the survey indicated that would change if Japan were to acquire nuclear weapons). The other big regional players—India, Russia, and South Korea—were seen as relatively negligible risks.Still, there is one area where foreign governments worry the Chinese: sovereign investment. Close to 80 percent opposed the idea of a Japanese...
  • Globalization Slows Down

    In November, I met with an executive at one of the private-equity firms that has sprung up in Beijing. He talked up the firm's investments in energy software and mobile communications. But exporters? He wouldn't touch them.The fact that China's smart money is now looking inward and avoiding the sector that brought it so much growth in recent years highlights a new trend that is likely to continue and spread next year. For the past few decades, goods, services, and people have been whizzing around the world at ever-greater speeds and over ever-greater distances. The presumption was that this was the most efficient way to organize the globe's economic affairs. But a backlash has set in, motivated by economics, politics, and the shift of wealth from West to East. As a result, it seems we are now experiencing a round of deglobalization.In the months after September 2008, pretty much every metric that testified to the growing interconnectedness of the global economy fell off a cliff. The...
  • A Business Idea With Legs

    LittleMissMatched's stores and Web site cater to fashion-forward tweens. But as the company grows, it's struggling to maintain its unique brand identity.