Autumn Marathon

“How Can We Help?”

Last week, this exchange at Davos between Michael Dell and Vladimir Putin captured world media attention for a couple of news cycles.    According to CNN, Putin “slapped down” Dell.  The discussion  illustrated how Russians and Americans continue to talk past each other and miss opportunities to form mutually beneficial science and technology partnerships.

Dell starts the clip by expressing surprise that Putin would speak of the “dangers of excessive government involvement” in the economy.  He then praises Russian advances in the IT sector and finishes by asking “how can we help” to advance this.  Putin starts his reply saying, “We don’t need help.  We are not invalids.  We don’t have limited capacities.”  He then goes on a five-minute discourse about all the things his government is doing in the IT area.   The first thing I noticed watching the video replay was that the facial expressions body language were very negative.  Dell comes off as being snide and condescending.  Putin is defensive, starchy and pedantic.

Dell Computers is known for its innovations in using the supply chain to hold down costs and increase efficiencies, but it has never been known for technical innovation.  Its CEO knows that some of the Russian scientific talent he mentions could contribute valuable technology to his company either through direct employment, licensing or some form of contracting.  Also, Dell’s market share in Russia is miniscule and could be greatly increased.  Increased direct investment and trade with Russia would help to develop the country’s IT sector.

The Russian Prime Minister, on the other hand, missed a perfect opportunity to make a pitch to Dell to create manufacturing and/or technology operations on Russian soil.  Yes, Russian software engineers are among the very best in the world!  But Russian management know-how still lags the US (notwithstanding impressive progress over the last decade), business conditions and legal infrastructure remain complex and difficult.  Multi-national companies that operate in Russia serve as a training ground for young business leaders and often have the influence to force improvements in the implementation of regulations and practices governing businesses.

This discussion serves nicely as a proxy for the errors in US-Russian economic relations over the past twenty years.  The US offer of help is sincere, but naive and insulting.  The Russian insistence that it doesn’t need help reflects pride in real achievements, but misses the point that everyone needs help sometimes.  Frankly, I would have expected a higher level of dialogue from our leaders.