There are few moments in my life that I feel having learned so much in one day. Berkeley Business Conference has certainly made my day of Feb. 20.

I can’t wait to write down all the valuable learning before I forget anything and I feel obligated to provide them to my friends who haven’t got the chance to attend.

The conference’s theme is “Asia: shifting the global center of gravity”. It reflects the fact that Asia currently is home to the fastest developing economies, such as China, India, Vietnam. More and more people begin to believe that Asia, especially China and India will gradually take over the leadership in the game of global economy.

The conference is a list of guest speeches and panel discussions. Out of the four panels that have different topics –consumer, clean technology, finance and global operation, one can choose to attend only two. I really wish to take all of them as I know the ones that I’ve missed are as wonderful as the one I’ve attended.

Now let me conclude my key learning from each section.

Key note speaker one:
Scott Matlock, Chairman of Asia Merger and Acquisitions, Morgan Stanley

Scott is considered one of the most prolific M&A practitioners at Big M, focusing on the media and telecom industries. He has shared the fact that India is much more likely to accept foreign capital investment than China. Chinese people are well known for their saving habit. Also, the government has made a decent surplus each year from export. Thus the capital market is large enough for internal business development. “You can build a (telecommunication) tower in India but not in China.” said Scott. His advice to young people is that do not settle down in one place because it will limit our career opportunities.

Key note speaker two:
Joi Ito, co-founder of Digital Garage and an early investor in Flickr, Last.fm, Kongregate, Twitter and the first investor in Six Part, the largest independent blog software company.

You can tell how smart this guy is from his investment portfolio. Yes, he’s absolutely a genius. He generally explained why Japan is not an innovation center in the IT and internet era. He described at length about one concept: low risk, high return. Large corporations in Japan, such as Sony, Panasonic, Toyota, have been enjoying high profit by shifting risks to small suppliers and are less willing to allocate resources for innovation. Why? After Japan fell into the great recession since 1990s, the old interest group that features the finance ministry has been trying to maintain the power by alluring followers with generous offers such as life-long job security and by enticing people to fall into corruption too. Thus it’s very hard for the new political power, the democrats to change the status quo in the political arena. Same things happen in the business world as well. The smartest kids from top schools will be offered lucrative packages at these large corporations and guaranteed life-long job security. In this circumstance, who will kick away the package and go to be an entrepreneur? The whole “low risk, high return” mechanism that works in politics, business, and also on individuals has seriously restrained Japan’s innovation in technology and its competence in the current business world.

Actually Joi’s comments also provided good insights about the recent Toyota’s recall scandal. Most of us have believed in Japanese products for their outstanding quality, however, time has changed. The stuck open accelerator pedal is a fatal defect which tells the world that the best auto producer at one time can hardly maintain qualified deliverables when it’s too large to be efficient and even has become increasingly corrupted.

Once corruption starts, things won’t go well for long. I’m afraid that China’s fast growth will be hurt for the same reason. It struck me heavily while my friend Frank, a Berkeley PHD in electrical engineering from China told me about his finding that the smartest kids now graduating from China’s MIT, Tsing Hua University, prefer to go to work for the government or for state-owned organizations rather than working for foreign companies or seeking entrepreneurship. Why? Properties in China’s big cities, such as Beijing, Shanghai and Guangzhou and many others are extremely expensive. Even though foreign companies usually offer high salaries, they will have to work very hard to keep the jobs so they can pay back their 30 year mortgages. However, benefits at the government or state-owned companies usually include generous bonuses, housing benefits, and even grey income on top of high job security. If the first level talents aren’t willing to seek entrepreneurship but to choose those low risk high return jobs, I don’t know who can keep the 9% growth rate for us.

To be continued…