Four IU alumni honored

ASIAN FINANCIAL CRISIS A MODEL FOR WHAT COULD HAPPEN IN U.S., ECONOMIST TELLS IU BUSINESS CONFERENCE

INDIANAPOLIS -- Americans looking at Asia's troubles shouldn't gloat over the strong U.S. economy. In nine months, with the introduction of unified European currency, the rules will change concerning international finance.

That's one conclusion discussed by Lester Thurow, author of the recent book, The Future of Capitalism: How Today's Economic Forces Shape Tomorrow's World, who was the keynote speaker at Wednesday's (Feb. 25) annual conference of the Kelley School of Business at Indiana University. The event was held in the Indiana Convention Center and RCA Dome and included recognition of four IU Business School alumni for their professional achievements.

The honorees, named to the Kelley School of Business Academy of Alumni Fellows, were Mark S. Feighner, president of GTE Mobilnet, Atlanta; and C. Mack, president and chief executive officer of Citibank's Central and Mid-Atlantic regions, Chicago. The 1998 Distinguished Entrepreneur Award was shared by the co-founders of AudioNet of Dallas -- Mark Cuban, its president, and Todd Wagner, its CEO.

In an hour-long speech peppered with humor and historical references, Thurow outlined for the audience of more than 1,000 how the current Asia crisis unfolded, and shared lessons for U.S. business and industry.

One lesson, he noted, should be the recognition that nations can no longer operate under a trade deficit without negative results.

"We all learn in international trade that the only one who can run a deficit is the one who prints the currency," said Thurow, who is also a professor of management and economics at the Massachusetts Institute of Technology. "Starting on Jan. 1, 1999, the Euro comes into existence, and for the first time in 50 years, if you don't like the dollar (for investment), you have someplace else to go."

Thurow was not necessarily predicting a similar crisis for the U.S. economy, but he believes that it will lose its ability to run trade deficits similar to those it has had in the past.

This fundamental change in the global economy was just one of many that have already taken place in this decade, as well as many yet to come, he noted.

Other speakers on the program, former Motorola Inc. CEO Robert W. Galvin and Cable News Network's Lou Dobbs, provided insights in response to a question that served as the conference's theme, "The New Millennium . . . Are You Ready?"

Thurow illustrated the need for business leaders and public officials to embrace change and recognize when things aren't working. Among capitalism's greatest faults is that, as an economic system, it discourages taking a long-term view, he said.

He told a story about Sir Isaac Newton -- arguably "one of the world's smartest people ever" -- who very publicly sold his stock in the then-troubled and British monarchy-controlled South Sea Co. But even Newton couldn't resist purchasing another stake in the company nine months later, after it had recorded large but unsustainable profits. The company subsequently failed and Newton lost a large sum of money.

The American public needs to recognize that the game has changed. "In 30 years, we won't be in a U.S. economy, but a global economy," he said. Similarly, "breakthrough industries won't just create industries, they will change the way we do everything."

Galvin, who directed one of the nation's oldest high-tech companies through a period of tremendous change, noted that knowledge is the only long-term resource that is sustainable -- in contrast to natural resources.

The former Motorola CEO recalled the U.S. companies his father and predecessor as company chief executive used as benchmarking firms earlier this century. Today, either they no longer exist or they are in other kinds of business.

"Surprises are a semi-surrogate for that factor called luck," said Galvin, now 75 and chair of Motorola's executive committee. "In our case, we have a declared mission; it is almost a theology that is called renewal."

To illustrate, Galvin discussed a concept he developed at Motorola about 30 years ago called "science road maps." He said when he became dissatisfied with how his company was managing technology, he realized there had to be some way of charting technological discoveries and changes.

Periodic reviews began to be held in every sector of the company, which were attended by top management. Through this process, Motorola has consistently remained a market leader in every kind of business it engages in, from car radios to cellular phones. Today, Galvin advocates something similar for U.S. science and technology. The U.S. Department of Energy recently announced that it will create technology road maps to help seek out new energy concepts.

"If science becomes more productive, then there will be more knowledge put on the shelf for companies like ours," he said.

At lunch, CNN's Dobbs shared stories from his two decades at the 24-hour cable news channel. "Today, business is so much a part of our lives," he said. "As a journalist, I find perspective to be the most important commodity."

(George Vlahakis, Office of Communications and Marketing, 812-855-0846, gvlahaki@indiana.edu)

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