What is your opinion of the Global Economy?

I think the world is at a crossroads. I once wrote an article where I explain what I believe is happening to capitalism. Capitalism is entering the Third Phase and we do not know what form it will take, there are phenomena and challenges for which we still have no names or responses.

Deliberately distorting what Einstein once said, the problems of today can not be solved with old formulas, we have to look for new solutions.

In my view, there are several concerns, for example youth unemployment.

This time a year ago, I produced an article on this subject, and the figures are frightening. The global youth unemployment level is equivalent to the US population. This situation is serious:if someone, degree qualified or not, gets to 30 years old and has never had a job, or only has had temporary, part-time jobs, they will suffer from low self-esteem – and this can scar a person for their entire life.

From my point of view this is a major concern that we must address but solutions are difficult to find. Unemployment, and I am now referring to the West, it is obvious that there are variations within the US and even within Europe, as there are widely different numbers between countries. For example, Spain has high unemployment while Germany shows far lower rates, but collectively, unemployment is a challenge, and when it exceeds technical levels, it can be considered dangerous.

If it is Transgenerational, it becomes very complicated. Internationalization is about moving, so I travel a bit, and what I have found is that BRICS and PIGS are talked about a great deal, like what is happening in Russia; and what is going on in Brazil. Only 5 years ago I had a few people who emigrated to Brazil, and I told them: in 2016 you will return. They returned a few months ago, a year before expected. Brazil continues to be a country that has stagnated. It was said that the BRICS would help shift the balance in the World, this was a failed promise.

I think it isn’t worth going into too much detail, but I think after the U.S., the next power is in India, for sure in 50-100 years it will be India, not China, due to its cultural, linguistic, geographical and demographic issues. In 2030 India will overtake China in these values. Geopolitics is not where my expertise lie, so I can not expand on these concepts, but in fact in 2005, it was said that Germany was beginning practices that could be dangerous during the formation of the Euro. If one compares Germany in 2005 and in 2015, then we would see that Germany has been a beneficiary of this crisis. Almost everything I’m saying is written down, saying it now is easy, but I wrote about it ahead of time, I have more than 100 articles in the press. I think considering the differences with some countries, including Portugal and Spain; entering the euro was nonsense. It was negotiated, but was largely imposed by Germany and we can now see the practical result. History shows us that there is always someone with a vested interest, a country that benefits from the sale of their own country. This sale is figurative. I do not mean that the PIGS are not at fault, or that politicians are innocent in all this, but just read Noam Chomsky to realize that what the U.S. is doing is not vastly different from what Germany has done. The first thing we did was destroy our fishing fleet, obliterate our olive trees, our vineyards, and they supported us through this. In Spain it also happened, of course this is a simplified version of reality. We were given money so we bought BMWs and Mercedes, yet we didn’t actually have this money because we were only given a portion of it, also in real terms we didn’t have the money to pay back – but the German banks have been reimbursed. Greece is now the prime example.

Regarding  what is happening in Russia and Eastern Europe, I would say we still haven’t learned how to live in a globalized world. If you look at international statistics of a variety of countries, although it may seem like there is more trade: transactions and freight transport on a global scale, in relative terms it is not so. In addition to this, trade with North America is becoming more intense and therefore exchanges out of North America are reduced. The fact that they had more people and goods to circulate, is not necessarily significant, here and there are some urban myths but if you just look at the statistics, people have this social challenge to resolve.

Nowadays, we have not learned our social, professional and mental stability from a family value point of view, and of course, with Skype and Facetime our lives are made much easier. A few years ago a couple who had 3-4 children had at least the guarantee that one of the children would live near them and take care of them in their old age, today it is not like this. From a social point of view this is an extremely tricky challenge. Some say that the next 100 years the idea of the company will disappear, or rather, it will no longer have the same relevance as it has today. The way society is organized, they can never fade away completely. It is for this reason that I say that we are entering the 3rd Phase of Capitalism. Business as we know it, within the next 50 to 100 years, will not have the same role as it has today – all of us have a hard time realizing what is happening. If people are blind to the idea of war, then war will most likely occur.The first time I heard about the Mediterranean problem was in 1992…

In what way?  

This issue of immigration from Africa to Spain and Italy – what measures should be taken? Do we build a wall or do we create conditions for people so they do not have to emigrate? It seems that there is nothing new about this ‘new’ problem. A year ago I read out a text in Brazil where they were talking a great deal about Germany and Europe, I asked the audience when they thought it was written, and they responded: “One month, six months, one year, two years ago,” yet I explained it was published in 1990! I foresaw the financial crisis that is going on now – in 1996. Do you know how? The origin of the crisis comes from the easing and subsequent repeal of the Glass Steagall-Act (Banking Act)  which gave rise to this crisis of 2007.

I predicted that the boom and evolution of the world economy would happen in 2001 and the decline in 2014, I was wrong, it was a little earlier. There are models and formulas to realize which sectors are at risk, and so when they say that the crisis was a surprise…really? A surprise for whom? It was inevitable.

You said that within the next fifty years, India will be the next world power. Will we see India solve its social problems? Will India be an example of overcoming difficulties?

Well, India has a very complex caste problem that it needs to address, but let me start with China first. I do not teach in Portugal, I only teach abroad and I teach in China. It was only after I went to China that I realized what was happening there, because what they see reported about China in the media and politicians in no way corresponds to the truth and there are contradictions.

The latest example is Greece with its tax avoidance, I think the Chinese are cooking their books too, and I think a good part of the miracle there is that they are “gilding the lily.” In the last 2 or 3 years, 5 million people graduated, while 2 million people got a Master’s and 1 million got a PhD. Every year. Even if we think that Chinese universities do not have the same quality standards – the numbers are astounding. In India those who can’t get into MIT go to the IAT, so I believe that the main lever for change is education. The language is also key, China has more than 80 dialects, and in that sense India is more likely to become a world power because of its low profile for expansion.

The image of Portugal, its characteristics, according to a study, are not very positive. What can be done to change this?

I am supporter of the German-Japanese model. I do not arrive late for meetings, I am very punctual. My mother is German. The glass always half full. I believe in the country, I am an optimist, but an informed one, so I have some questions about this change. Portugal will be like this in 100 years, it has to do with cultural and religious issues, but it is not unspoken of and that will change too. I’ll give you an example: Portugal is a liability and Lisbon is an asset.

Of course a company in Porto will not say it’s from Lisbon. Lisbon is the 8th or 9th city in the world to hold conferences, who knows, no one! In the last 3-4 years it has won 1st place in European short breaks, three times! The Portuguese do not know that. When they asked the Siemens President what his perfect board was, he said six Germans and one Portuguese. The London Business School, at the time my wife studied there, had 64 nationalities and the best student was Portuguese. We talk about self-esteem. We could be more Spanish. We could be Iberians. The Portuguese are more like the Italians than Spaniards. Here we believe that everything that comes from abroad is better, but for example, around 60% of Brazilian genes are Portuguese. I like Portugal. We have to stop complaining about everything and appreciate the country more. Let me tell you a quick story:. A Scotsman, responsible for funding and higher education in England, did his doctoral thesis and it took him five years. His thesis was to be on three countries in the 1500’s: Germany, Italy and Portugal. At the time he realized that the attitude in the 3 countries were as follows: Germany (work hard, no play), Italy (work hard, play hard) and Portugal (no work, no play). This is history. The best word that can be translated from Portuguese is Inveja. Envy. That’s interesting. So instead of worrying about what we do, we look more for what we do not. From that point of view I am not an optimist, money changes what the country is. But if we change our focus, we can enjoy the best that our country has to offer: good weather, good beaches, Lisbon is clean and safe, we are close to the U.S. and Europe. I am an informed optimist.

Sustainability Knowledge Lab is interesting. Is it important to attract outsiders to this project?

Both. A good example, the Instituto de Empresa recruited students from Latin America a few years ago and placed them in MBA courses and quadrupled their salaries. Based on that, it rose in the rankings and now attracts students from around the world. We are the only institution in Portugal with a campus abroad, TRANSCOM in Mozambique. ISCTE is a proportionate institution with more foreign students than Portuguese: we have 300 BBA students from China. Three years ago there were only three certified universities in Portugal and we were one of them. It has to do with our relationship with Macau. ISCTE has a management school and a business school. There, we only teach executives. Our focus is Africa and Latin America, and we intend to attract more people from other nationalities. What distinguishes us from the competition is this student-to-student link and student-teacher. It is informal, the student can go into the teacher’s office without having to make an appointment. And we’ll continue these practices and bring them into other countries.

The development of an organization is done by maximizing the opportunity for all of the stakeholders and the minimization of what each person thinks, says, and does. What you think should be the same as what you do and what you say.