CGTN Europe interviewed Howard Yu, Professor of Management and Innovation, IMD Business School
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00:00How ready are global companies for the future?
00:03IMD's Center for Future Readiness has ranked them,
00:06looking at 93 of the largest tech, pharmaceutical and fashion companies.
00:11In the tech sector, the US giant NVIDIA moved up into the top spot
00:16with its investment in artificial intelligence scoring a perfect 100.
00:20Microsoft moves down to second place and Meta stays at number 3.
00:25The Taiwanese chipmaker TSMC moves up 9 places to number 12.
00:31What about the pharmaceutical sector?
00:33Well, the Swiss company Roche scored a perfect 100, putting it in first place.
00:38The spectacular success of weight loss drug makers propelled Denmark's Nova Nordisk
00:44and the US's Eli Lilly into second and third place.
00:48And in fashion, the luxury takes the lead.
00:51The powerhouses Hermès and LVMH earned the top two spots
00:55thanks to what the report called thoughtful expansion rather than aggressive growth.
01:00Nike fell from first to fourth place and the report said the company was losing focus.
01:07Professor Howard Yu is director of the IMD's Center for Future Readiness.
01:11I asked him whether the companies are ready for Donald Trump.
01:16I think some companies are, some others don't.
01:19In the end, it comes down to how prepared an organization can pivot in an unknowable world.
01:26Because there's just so much unpredictability it's going to throw at us
01:31and the winners are the ones who can quickly pivot whenever it's needed.
01:35Well, that's the challenge in corporate life, isn't it?
01:38You say quickly pivot.
01:39I mean, you think about all of the industries who might be affected by Trump tariffs.
01:45It's easy to say, it's very difficult to say be flexible, pivot quickly.
01:51Corporates can't easily do that, can they?
01:53Not so much, actually.
01:55Because what you've seen is there are companies already prepared
01:59to supply chain agility, the mastery of data
02:03and also developing a much more diversified global footprint.
02:07So that when tariffs happen, you have the information at your fingertips.
02:11And look, in competition, you do not need to be perfect.
02:15You just need to stay one inch ahead of your competitor, then you win big.
02:20You talk about supply chain preparedness.
02:23We've been through COVID.
02:25We remember the blockages to supply chain of the canals, the Panama canals and all that that meant.
02:31We know what wars do to supply chains, both in the Middle East and in Ukraine.
02:37In a sense, there is no excuse.
02:40Is there for global industry not to be prepared?
02:43We've been through this in recent history.
02:45We've had a go at it once already.
02:47That's it.
02:48I mean, there's so many companies getting stuck with what I call the knowing and doing gap.
02:53They know what's needed.
02:55It's like me.
02:56I know I need to exercise every day, eat healthy, but I just procrastinate.
03:01Same thing for companies, right?
03:03You said it.
03:04We've seen that movie before.
03:05This is just a sequel.
03:07There's no excuse.
03:09When you and I stand here at the end of this next Trump presidency,
03:13what's the corporate world going to look like?
03:16I think we're going to see organizations that not just survive but prosper
03:22are the ones who know how to talk to all sides.
03:28Because in the end, a global company, you cannot pick sides, right?
03:31You just need to be all in, in all markets.
03:35That means sometimes you go direct into a particular market.
03:39Sometimes you do joint venture.
03:42It's all frenemies.
03:43Sometimes you are friends.
03:44Sometimes you're enemies.
03:45Sometimes you compete.
03:47Sometimes you cooperate.
03:49That's how you make the pie bigger.
03:51We've talked about generalities.
03:53Let's drill down just for a second, okay?
03:56Let's look at big pharma around the world, okay?
03:59An incoming Trump presidency could cast an enormous shadow over big pharma.
04:05We're watching the appointment of vaccine skeptic Robert F. Kennedy's health secretary.
04:13What's that going to do to global pharma?
04:16I don't think it's just vaccine.
04:18No, it isn't.
04:19He's going to scrutinize big time in all kinds of treatment.
04:23He's going to scrutinize in terms of patient outcome.
04:27If you look at the track record of what are the areas he pays most attention for,
04:32it's whether pharmaceutical companies are making too much money
04:35based on science that are a little bit more skeptical.
04:38I think what that means is if history is a guide,
04:44then there will be enormous pressure looking at patient outcome.
04:48When government payer and insurance are paying certain amount of treatment,
04:52does it really improve mortality at the population level?
04:56So I think this is not just hitting companies big in vaccines such as Sanovi, for instance,
05:04but would be whether it's Novartis, Roche in oncology, Pfizer in mRNA treatment,
05:12Ozempic of the world in obesity treatment, all sorts.
05:16It's going to be all sorts.
05:18So the kind of getting approval from FDA and making huge amount of money era
05:25probably is over.
05:27There's a whole documentary to talk about that,
05:29but I just want to talk to you about one other global sector.
05:33Let's look at artificial intelligence for a moment, both in Asia and in the United States.
05:39But Asia isn't quite managing to translate its influence into global markets, is it?
05:47I mean, what needs to change on Asia AI?
05:52Yeah, I think the only exception is TSMC, right?
05:55For the rest of the technology company, either they somehow lose their relevance
06:00or it's very hard to tightly integrate it into this expansive ecosystem.
06:06I think two things are going on.
06:08One is the deep tech that needs to play catch up.
06:11So we're talking about large language model, you know, the idea about chipset.
06:18Asia is still behind by the leading companies by all measures.
06:22But the solution comes down to, you know, if you're thinking about Southeast Asia as a region,
06:28for instance, then maybe it's brokering technology to find a last mile deployment would be useful.
06:36Sort of repeat a little bit of what has been so good in e-commerce.
06:41Look, Gen AI, the future deployment are so many application arena.
06:46So probably we need to push the e-commerce to the next level.
06:50And that could be the potential leeway for Asian company to step up ahead again.