Europe and Emerging Africa, part 3 – Europe’s Chance

Europe is the largest provider of development aid to African countries. Although aid is still very much needed in certain places, it increasingly becomes an outdated concept. It is also outdated because its influence on Africa’s realm of ideas has become limited.

Global economic development is possible

Today we know that global economic development and a global provision of basic conditions for material wealth have become possible. More than half a century ago, when US President Harry S. Truman announced in his inauguration speech in 1949 the first real attempt for global development, this was not so clear. “ … we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas. … “.

But the capitalistic system has been capable of creating basic conditions for wealth in more and more places. The emerging world is the proof – from Japan in the 1960s, the Asian tiger states in the 1970s/1980s, then Malaysia, Indonesia, Thailand, Philippines, China, Vietnam, Pakistan, Bangladesh, India and now in at least 23 emerging countries in Sub-Sahara Africa.

„Customer Value“ instead of „Shareholder Value“

This development has been triggered long before shareholder value thinking has been known and long before leveraging the global financial economy. Simple profit-seeking activities do not explain what has happened in emerging countries. Rather “real” economic undertakings as infrastructure building, housing investments, leveraging education programs or providing an ever better food supply have been essential; all activities requiring an orientation towards long-term thinking, outcomes, and impacts.

Meanwhile – in the middle of our long lasting structural economic crisis in the Western world – it is not just European management thinkers (Fredmund Malik, Hermann Simon) proclaiming a renunciation of mainstream shareholder value thinking. Also leading American thinkers liker Roger Martin or Steve Denning have heralded the end of Shareholder Value Capitalism. Already in early 2010 “The Age of Customer Capitalism” has been the title of a HBR paper by Roger Martin.

Europe’s Hidden Champions

Silently, more than 1500 companies of German-speaking Europe alone are on the q.t. changing the world. They are global market leaders in their areas. Machinery for bakeries, harvesters, formworks, mechanical tampers, hospital designs, and many, many more. In recent years these companies have spread their services all over the world and have contributed substantially to the global economic development.

They are not short-term profit oriented; rather they focus on innovative solutions for specific problems and needs, somewhere in the world. In doing so they focus on the creation of “customer value”, the only way to survive in the long run in a competitive global environment. Profit-seeking rather comes as a constraint than an objective.

First research on these companies has been done by the German management thinker Herman Simon who named them “Hidden Champions”. Today, hidden champions present more than an economic model. As these companies contribute to global development and are part of innovative solutions for global goods – and therewith transfer “values” – they do represent a societal model.

Most probably, this Central-European model of Hidden Champions is a much more important European contribution to global development than European development aid. In fact, time has come for Central-European companies to contribute increasingly to the development also of African countries and to assure Europe’s place in the history of ideas of our globalizing world.

 

See also Europe and Emerging Africa, part 1 – Emerging Africa is on the move

See also Europe and Emerging Africa, part 2 – China’s State Capitalism and US-Shareholder Value

See also Hidden Champions – Europe’s hidden contribution to the globalized world

 

 

2 Replies to “Europe and Emerging Africa, part 3 – Europe’s Chance”

  1. I don’t think that you can compare German enterprises with development aid. First is for profit, second for the development of people and countries.

    1. I don’t think that the formal difference of being a “Non-Profit-Organisation” or a “for-profit” business does anything tell about what an organization is doing. It is the purpose and the actual doing which count.
      In this sense I disagree. An enterprise can contribute to the development of a country just as development aid can.

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