04 Nov 2016
The Competitiveness of Lost Causes
Business strategies and access to financing are opening opportunities in countries with dire economic challenges.Re: Michael Porterby Deborah BlaggTopics:
(photos by Jennifer Heffner)
As lead private-sector specialist at the World Bank Group’s Trade and Competitiveness Global Practice, Emiliano Duch (MBA 1991) draws on 25 years of experience in helping countries and regions to develop competitive private sectors. “Wherever you are, look at the existing strengths and capitalize on those,” advises Duch, who is currently applying that strategy to the challenge of helping rural farmers in Haiti sell their produce directly on world markets.
Since joining the World Bank in 2013, Duch has taken bimonthly trips to train and work with local staff from the Haitian Ministry of Commerce and Trade. “We’ve given a team of 30 farmers a crash course in strategy based on the HBS case method, and we’ve accompanied them on trips to meet potential customers—from coffee dealers in Seattle to mango buyers in Europe,” says Duch. “As they begin to navigate international markets, they’re developing ambitious plans for their producers.”
Lack of infrastructure makes follow-through on those plans challenging in Haiti, the third-poorest country in the world and the site of a catastrophic earthquake in 2010. “We’re helping them to establish logistics platforms, sales forces, and phone-based payment services using power from car batteries, because often they have no electricity,” says Duch, who once described his job in a Class Notes update as “making competitive businesses out of ‘lost causes.’”
Crossing the River
A Spanish citizen who was working for the Ministry of Trade when his government sent him to study at Harvard’s Kennedy School of Government, Duch enrolled at HBS because he wanted “to have both sides of the river as an experience, understanding the business side from the public side and the public side from the business side.”
“In those days,” he recalls, “having an interest in business-government collaborations was unusual. Many of my classmates were looking toward careers in finance and were more of the opinion that governments just needed to get out of the way.”
At the suggestion of his Strategy professor, during his second year at HBS Duch worked on independent research with Professor Michael Porter, who had just published his landmark book, The Competitive Advantage of Nations. “It was a great opportunity,” Duch says. “Porter’s work on the capacity of government to create policies and conditions that facilitate the development of certain industries coincided with my interest in exploring how local governments can create environments that are favorable to the development of particular businesses.”
After HBS, Duch worked in Spain’s Basque country for Porter’s Monitor Group consulting firm, on assignments aimed at finding solutions for high unemployment in outmoded manufacturing industries, which was a situation that contributed to political and social unrest in the region. “It was one of the first applications of the ideas in The Competitive Advantage of Nations,” says Duch. Building on that experience, he spun off his own consulting firm, Competitiveness.com, in 1993 to work exclusively on cluster competitiveness reinforcement projects.
Consultant and Networker
One of his firm’s first challenges was helping the 500-year-old leather industry in Catalonia to comply with the European Union’s new environmental regulations, in part by helping producers secure public guarantees for financing a $17 million water treatment plant. “That was a success story that saved and created jobs and became the basis of an HBS case,” notes Duch. “Today everyone buys Louis Vuitton and Hermès bags made from Catalonian leather that is produced through sustainable, non-polluting practices. Many years later, it’s gratifying to see the positive results of that project.”
As CEO of Competitiveness.com until 2012, Duch personally led more than 120 of the nearly 200 initiatives that the company implemented in Denmark, France, Italy, Spain, Sweden, the United Kingdom, and Latin America. He advised public administration institutions, regional governments, and multinational institutions.
In 1998, Duch also became the founding chairman of the Competitiveness Institute (TCI), a global network of practitioners and organizations with expertise in economic cluster development. The nonprofit NGO has ties to 9,000 practitioners in development agencies, government departments, cluster organizations, academic institutions, companies, and multilateral institutions, in more than 100 countries. “Through conferences, information sharing, and networking opportunities, we support cluster-based economic development to improve the competitiveness of cities, regions, and countries,” says Duch, who still serves on the organization’s advisory board.
Broad Sense of Responsibility
Asked to describe his HBS experience, Duch says, “I went there with an interest in gaining the tools to help my own country grow. But during those two years, my playing field became the world.”
Duch says that, along with broadening his outlook and abilities, Harvard also sharpened his sense of responsibility: “You feel like you’ve been given the resources to have a serious impact anywhere. I was no longer thinking only about how what I learned could be applied in Spain.”
Over his last decade as the head of Competitiveness.com, Duch found himself drawn more often to projects in developing nations. “We consulted first in Chile, Argentina, and Brazil,” he explains, “but after a project in Colombia, where we worked in regions that had been affected by guerillas and the drug trade, I started to think more about countries with challenges that require really large-scale interventions.”
In his current position with the World Bank, Duch says he has more tools to help countries with dire economic problems. “I can offer not only strategic and logistical coaching, but also financing to put plans in motion. In a place like Haiti, the ability to lend money and the execution capacity to help them build infrastructure is what the Bank brings that no consulting firm could do.”
Urgency and Long-Term Impact
After being based in Barcelona for many years, Duch was happy to bring his family to Washington, DC, a city that he says offers “more racial, religious, and ethnic diversity and a broader range of opinions and views.
“There’s also more of a sense here that, if there is a problem, you don’t just complain and wait for government to step in,” he continues. “It’s on your conscience to solve it. That’s something we want our children to embrace. One of our daughters is in college now, and she is doing volunteer work in Greece. I’m not sure she would have pursued something like that if we had stayed in Spain.”
Duch brings a long-term perspective to his own problem-solving work at the World Bank, an awareness of both the urgency and the multigenerational impact of projects undertaken today. As an example, he describes a current initiative in a remote area of Tunisia, near the border with ISIS-occupied territory in Libya. “We’re coaching civil servants there on developing agriculture—the production of cork and essential oils—for international markets.
“Identifying assets that have been given by nature, and building the knowledge and capacity to use those assets to create more economic, political, and social stability, is a little different from building a business,” he observes. “There aren’t many companies that need to develop strategies based not only on what will be best for their stakeholders now, but also for their stakeholders’ grandchildren.”
Class of MBA 1991, Section D