Global Direct Investment Solutions

Corporate Development for a Networked World

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Philosophy behind Global Direct Investment Solutions

Bruce Donnelly   bruce@gdi-solutions.com    (Biography)

by Bruce Donnelly

Start with what everyone agrees is worthwhile, but will never happen, or is too difficult to accomplish.  Show how it can be done by working together as a team.  Then move on to attempt what everyone agrees to be absolutely impossible at this time, and create an environment in which highly motivated people can demonstrate their abilities to achieve great progress together.

Dare to believe that the world can become a much better place, and help make it happen by working with others to do the right thing, one step at a time.  The status quo ante is just interesting history.  Learn what is valuable from the shared experience of others, and apply it.  Move forward boldly.  Show it can be done.

Many of the ideas behind the creation of Global Direct Investment Solutions have been evolving for twenty years, ever since joining and then leaving the US Foreign Service.  Economic hardship, sustained by the lack of more effective economic and political leadership for development in countries throughout the world, including our own, is clearly one of the greatest factors in human suffering, tyranny, war, and terrorism or many other criminal and social problems.  Progress, however one defines it, has been much too slow.  We can and must find a way to do much better than this.  The creation of this business is expected to become part of that solution, demonstrating how even a small group of dedicated professionals can transform the global investment process by which billions of dollars are invested each year to build the foundation for future productivity and prosperity.

Decades after the recognition in theory that "no man is an island", and the creation of great philanthropic foundations by business leaders to address urgent social needs, plus the creation of multilateral institutions and more government agencies to try to address both the root causes and daily challenges of human suffering all over the world, there has been considerable progress, but not nearly enough, and not fast enough to avert vast and very dangerous social problems worldwide today. 

As history has shown for centuries, we ignore the suffering of others at our own peril.  Today, the great advances in travel, communications, and other technologies create an unparalleled opportunity for collaborative efforts to transform the suffering which has plagued mankind since earliest history, and bring diverse and talented people all over the world together to achieve great things for mutual benefit

This is not a corporate real estate business about filling up empty factory buildings or abandoned brownfield sites, or creating new offices or factories at sites in the developed or underdeveloped world.  Each project is an opportunity to transform our world, and the sooner and better each project succeeds, the sooner our world will be a better place for everyone. 

We work at the very heart of human progress, with the companies and major investments which will transform our world, whether through seemingly "boring" or mundane "old industries" or those which are widely perceived as being at the "cutting edge" of technology. 

To paraphrase Will Rogers, I never met a business I didn't like.

They are all interesting.  They reflect somebody's dream of a way to create a better world, and profit by that achievement.  They add value efficiently to our world in some clever way, through many people working together, or else they wouldn't survive.  For those who doubt this, look at any object around you, from food on the table to the most sophisticated manufactured product or "software", and think what it took to make it, or to deliver it to where you enjoy it today.  Consider the challenge (or impossibility) of having those same things, in the same place or at a comparable cost, 10 or 20 or 50 years ago.  We are surrounded by brilliant accomplishments every day.  We just don't always take the time to notice and appreciate them.  We take brilliant solutions to our needs for granted.  Improvements to our quality of life or changes to where and how and by whom our needs are met may seem disruptive or even unwelcome at the time, but in hindsight they are taken for granted and seem to have been almost inevitable outcomes of market forces shaped by personal choices.

Some very clever people did a lot of valuable work to achieve that visible progress together.  It's like the "Carousel of Progress" ride at Disney's EPCOT, which they keep having to update for the changes since it was launched at the NY World's Fair where I saw it as a child in 1964.  We take a lot of extraordinary progress over time for granted.  The fun of this business is that we get to work with the clever people who are investing in creating the future for all of us, and meeting our diverse needs better than most of us ever envisioned, so that we can afford to enjoy an even better future, according to however we define "better" or the monetary or social value of specific products or services at the time.  It's better than visiting a "World's Fair".  We see the future emerging every day, and it is always amazing to see what talented people can achieve together.  We work with the visionaries and innovators who have the skills to convert ideas into better products and services which are delivered more efficiently.

Global direct investment is a process through which many talented individuals and the organizations which they represent, whether in private business or in public or professional service work, apply their resources and capabilities to achieve progress which governments alone clearly cannot or will not achieve for the people they serve.

To put it another way, the "invisible hand" often needs some help finding the right hand to shake, because progress needs to be faster and better on a global basis.  Demand is out there looking for supply, while Supply is looking for demand.  They don't always enjoy efficient markets in which to find each other and do business.

Responsible direct investment projects can transform our world, one local success at a time, better than any government.  This is where the solutions will be found, as Adam Smith astutely perceived so long ago.  Government isn't the answer, but it isn't the problem either.  It can help or hinder, but it isn't the driver, or the solution.  Demand is the driver, and supply is the solution.  Government is involved in the process of how efficiently and effectively they come together and interact, including attempts to manipulate the "terms of trade" in some circumstances, unfortunately.

If you doubt this potential impact, think about who pays the taxes, and who uses them.  Who has more resources?  Who is taking a percentage from whom?  The companies and individuals who do the work to provide goods and services, and who pay the taxes to support government services, have far greater wealth than all the government agencies of the world put together.  They all share a vested interest in the successful development of their own communities.  They also share a common interest that their tax dollars be applied more efficiently to their objectives.

That creates potential for the legendary "invisible hand" of capitalism to work to mutual advantage.  Investment projects are the foundation for enormous economic activity and benefit flows.  Direct investment projects are the infrastructure through which we build our social environment and make the choices about using our resources, technologies, and knowledge wisely for mutual benefit.  Governments, businesses, and private individuals are not adversaries with irreconcilable conflicts of interest.  They just have different roles and interests, and sometimes don't work together very well to resolve their different agendas and find common ground on which to make greater progress than is possible if they remain "a house divided against itself".

Inefficiency in direct investment flows is a global curse to humanity.  That doesn't require Keynesian intervention, protection of "infant industries" which never grow beyond their need for protection, nor mercantilist or nationalist solutions.  It requires a much better process to bring opportunities and resources together, all over the world, as "local to local" solutions rather than top-down intervention to address perceived inefficiencies, unmet social needs, or inequities of free markets. 

Such intervention by government is, quite simply, just one party in the negotiation trying to use its' power or influence to shift the terms of any deal in its' perceived favor.  If it pushes too hard, however, everybody loses because the negotiation ends in favor of better terms for trade and investment somewhere else.  The losers in that scenario are the people whose government blew their chance at greater prosperity.  Unfortunately, many governments still "don't get it", and their people suffer for it.

That includes "developed" countries, too - not just the "Third World" ones.  The road to missed opportunities for economic development is paved with bureaucrats and political leaders on both sides of major investment transactions who simply don't necessarily suffer from the adverse consequences of their intervention, and can benefit personally from doing the wrong thing (not just through overt corruption).  Government careers can be made doing work which effectively destroys value.

That is why free markets are generally a far better solution than government intervention, no matter how noble the social justification.  Government intervention isn't likely to disappear on either side soon, however, so the theoretical arguments about the appropriate level of intervention in a perfect world are moot.  We must play the hand we have been dealt, and those who persistently try to stack the deck in their favor will soon find that nobody wants to play their game, which is their loss.

The difference is that global direct investment isn't a zero sum game, simply redistributing wealth around the table of players according to the latest round of play, nor can anybody just cash in their chips and go home the winner forever.  We are all in this together, and temporary advantages are soon overcome by clever people who redefine the future, and those who walk away are soon left behind.

Instead of "winner takes all", good deals add high value for both parties, and the benefits grow beyond the initial expectations, building the "wealth of nations" rather than just the wealth of one nation.  That important "s" is sometimes forgotten by political leaders and their bureaucrats, who may perceive their role as pushing the interests of one nation alone.  That doesn't serve their constituents well.  It is one thing to be tough negotiators on behalf of your interests, and quite another to be so inflexible that a valuable potential agreement is lost, to mutual disadvantage.  This subtle neo-mercantilist attitude among bureaucrats is a serious problem, because it applies powerful government resources to counterproductive policies and practices, and sooner or later the consequences are suffered by people who may honestly believe that their government officials were trying to advance their interests, and that their suffering is therefore somebody else's fault.  Call it the "foreign devil" problem, in which no one is held accountable for the bad results of their own government.

Sometimes one should walk away from a deal, but often the problem is to get to the table in the first place, and recognize the potential mutual benefits which can be achieved by negotiating those issues on which there may be serious disagreement.  If both sides are simply "taking a position" and sticking to it obstinately, then it is a waste of time to pretend that it is an actual negotiation, rather than two ultimatums which will lead to little of value, even if one side eventually capitulates.  Another outcome is that an acceptable deal is finally struck, but after the investment of needless time and effort, and perhaps with a very suboptimal but tolerable outcome.  Once again, who is ever held accountable for missed opportunities?  It is too hard to prove what might have been possible, and serves no purpose anyway.  One does the best one can, but the point is that it is still a very wasteful process.

We need to make it faster and easier to achieve successful investment projects, in full partnership at the local level with the people whose lives are impacted, and with respect and sensitivity for their dignity, capabilities, values, and dreams.  There needs to be mutual recognition that investments are not unilateral decisions, and that the purpose of negotiation is to find the best solution for mutual benefit so that the agreement can be enthusiastically implemented and sustained through commitment to success from both perspectives, rather than a pyrrhic victory in which one side claims success and the other feels defeated and resentful, and perhaps poorly motivated to respect the deal at the first opportunity to break it.

I think we can all agree on that, even if we may disagree about specific political or economic theories or actions, or how best to achieve our common goals within the context of diverse social values, experiences, capabilities, and expectations.  If we are going to make our world a better place, we have to do a much better job of bringing resources and opportunities together.  Major investment projects have a big impact.

Many small steps can take us to that destination, but mankind was never satisfied to crawl, walk, or even run.  Expectations, if left unmet, can breed great and dangerous frustration over the social inequities of a "trickle down" pace of change, even if one can show that great progress is being made.

The lack of successful investment doesn't just generate disappointing national statistics or company financial reports.  It destroys lives.  It destroys whole communities.  It feeds countless social problems as people confront their inability to satisfy dreams of a better life through socially acceptable means, and perhaps turn destructive in desperation, frustration, or envy about the success of others when success seems unfairly beyond their grasp.

We must find creative ways to exceed expectations about what is possible, so that frustration is transformed into motivation and teamwork, which can then become mutual gratitude about the benefits of developing a better world together, with a visibly positive impact which we can identify in our own communities.  Development is not a zero sum or winner takes all game.  Capital investment is at the heart of the process by which we all compete and are rewarded for creating a better world, day by day.  It is the process by which the resources of the private sector, which dwarf those of governments, profitably and efficiently combine to do great things today which we will soon take for granted in the future.

Laissez-faire, free markets solution for all?

Does that mean that laissez faire, free market capitalism is the magic wand to ensure every society's prosperity?  No.  People and their governments must make their own choices, and decide what they think works best for their interests. 

Like companies, some countries, regions, or local economic areas will make good choices and prosper, while others will struggle or fail, but that isn't because there is one right answer and they got it wrong, or were treated unfairly.  Just as some companies succeed brilliantly and then fail despite still doing well those things which contributed to their success, the same can be true of national economies.

The world changes, and success requires adaptation to changing circumstances.  The future belongs to those who learn and adapt well to the new environment, rather than those who think their past success entitles them to a bright future.  Past success just puts one in a good position to adapt faster and better to a changing world, but as they say in the financial reports, past performance and forward looking statements are not necessarily indicative of actual future performance.  There is great opportunity for complacency or mistakes, and competitors get better too.  As individuals, companies, and societies make daily choices about how they invest their limited resources, they shape their own futures, for better or worse.  There is no simple right or wrong answer which applies everywhere for all time.  That is why the process of making major investment choices well is so critical to the future, even though lots of small choices add up to have a great impact, too.

It's like the old 80-20 rule in consulting, by which 80% of the benefit may be achieved by a focus on 20% of the work, and the other 80% of the work to achieve that last 20% of the potential benefit may not be worthwhile as a priority, even though a 20% benefit may still be of great value.  First things first.  If the process for major projects can be made more efficient, small projects will benefit, too, because the decision processes and issues are quite similar in this niche.

For example, somebody with a very small project might benefit form some of the knowledge and contacts which are shared openly through this website, but it would not be a focus of this company to go out and find such projects, or to provide all of them with as much or more support as the major projects.  We are glad that they can benefit from this work, too, and will generally try to be helpful, but that 80-20 rule still applies, and they require more help than can be justifiably offered for free when the focus is to create the maximum benefit for communities everywhere by helping leading companies to plan and implement major projects faster and better.

A key point, however, is that governments are not good at picking "winners" in the marketplace, and attempts to create winners often backfire in unforeseen ways.  For example, countries which tried to protect their infant computer industries created a prosperous group of businesspeople who could only compete in such restricted markets, while the whole country paid the price in terms of inferior technology which other companies and individuals were compelled to use at their disadvantage. 

Like the operation that is declared a success even though the patient is dead, these policies with good technocrat intentions to micromanage the economy for popular national political motives and ambitions have generally been dismal failures, even when they may appear to have been successful to some degree.  It is, for example, hard to measure the cumulative harm which uncompetitive technology inflicted on all their other industries, and how far this may set them behind in terms of ability to compete in world markets, instead of an indefinitely protected home market, with all the risks of corruption and "uneconomic profits" through state intervention to favor one group in the market over another.  Such good intentions can be very costly, and the costs can be hidden, so that the consequence of bad policies grow and become even more costly until they reach the point at which the problem is self-evident..

What did each of us do today to improve our world?

Each successful project isn't just another "deal" to be done as a source of profit to drive a stock price and shareholder value, although that is obviously important as a key driver of investment flows.  Success, on even a small scale, transforms the lives of all those who benefit directly or indirectly.  Every deal changes our world.  Some deals may prove to be bad, but the vast majority are good, and become even better.  Like the proverbial wheat and chaff, we learn from our experience, separate them at the right time, and move on to reap the benefits rather than dwell on the problems.

As some of the great business leaders and philanthropists of the last century so capably demonstrated, capitalism can be a great force for social good despite the obvious problems created by those whose motives and acts are not driven by higher values than the attainment of personal wealth and power. 

The challenge today isn't to redistribute wealth through governmental or other social programs, or to try to enforce ethical values and conduct through government, but rather to apply the prosperity and dreams of capable people of good will more responsibly to the daily opportunities to make the world better, one step at a time.

I see it as a challenge for diplomacy as something far more than "war by other means" between groups with conflicts of interest.  It is an opportunity to bring people together to find their mutual interests and achieve great goals as a team.

Global direct investment projects can transform our world beyond our imaginations of what is possible today, because they can efficiently apply the wealth of the entire world to the challenge, one project at a time, through thousands of successful projects each year.  They can respond to the diverse expectations of mankind.

It isn't about "domestic" investment or "foreign" investment.  It is about successful global investment, from anywhere, to anywhere.  Local communities are transformed as businesses go about the task of growing the organizations which successfully meet real needs efficiently and thereby drive economic development. 

Some projects will fail, and others succeed beyond the wildest expectations, but the process is a force for great social progress in the entire world, no matter where each specific project may go.  What matters is that the projects succeed, and apply resources very efficiently to their own piece of the puzzle of economic growth.

That is what drives this business, and why I am unapologetic about capitalism, or the role of this new corporation as a "for profit" rather than a "non-profit" enterprise.  Once the profits are there, they will be applied with social responsibility, but the profits contribute to disciplined performance and a focus on what achieves results.  They are the economic proof of mutual agreement that high value is being delivered.

The launch of this business was delayed for a year by the events of 9/11/01, which disrupted many capital investment plans and coincided with the annual meeting of the International Economic Development Council, where I was discussing the vision at the time with fellow professionals in this field.  The last year has been put to good use, however, to prepare for faster progress as the US economy recovers again.

I am glad to be launching the business at the IEDC Annual Conference and the CoreNet Global Summit, and hope it contributes successfully to the transformation of this niche market.  Direct investment can have a great impact on the lives of people around the world by efficiently bringing together the people who can convert investment opportunities quickly into successful projects.  The role of GDI Solutions isn't to drive that process, but rather to help create a more efficient market.

In short, supply is personally introduced to demand, and the world is changed for the better not by my own capabilities, but by what they can achieve together.  If it was ever true that diplomacy is simply "war by other means", then perhaps one can also argue that global investment and business is "diplomacy by other means".

Bruce Donnelly, 9/11/02

See also : 

The Introduction section, "Explaining the Vision", and the explanation of "The Need for a Better Process" as the reason behind SICR, as shown graphically in the summary of the SICR process and the graphical "funnel" showing how GUIDE and SICR fit together from both the perspectives of the corporate executive and area representatives.