The pulse of the global business community quickens and quivers to the rhythm of business innovation by companies in the world’s most influential countries — the United States, Japan and China, as well as members of the European Union.

As the pace of business globalization increases, research questions addressed by the Jesse E. Owen Chair of Excellence in the College of Business require the participation of companies and research partners throughout the world.

For two decades, Tor Guimaraes, the J.E. Owen chairholder, has not only kept his finger on that pulse, he’s analyzed the overall health and long-term prognosis of these economies by understanding how technological leadership plays a role.

“Technological leadership is critical for the success of business innovation,” said Guimaraes. “The leading companies are continuously looking to further improve their research productivity.”

Similarly, in the past two decades, Asian and American business students, professors and administrators have invited Guimaraes to publish and make presentations regarding the use and management of emerging technologies in organizations — all as an integral part of his mission at Tennessee Tech.

“I came to Tech because here I had the opportunity to broaden the field of study to include technological leadership,” explained Guimaraes, who has been ranked as one of the top 12 researchers in the world by Decision Line, the newsletter for the Decision Sciences Institute.

By invitation of the People’s Republic of China, he has served as a consultant to the government, training faculty and administrators in the use and management of information systems.

The recall of Chinese-manufactured toys and other goods in the past year may have cast aspersion on its manufacturing processes, but Guimaraes says China has the potential to become the world’s industrial power if the government makes the right choices. Last summer he was invited to be a keynote speaker at a major international conference in Shanghai.

Through the prism of his field, Guimaraes has watched China amass trillions of dollars in reserves, and he marvels at the construction and modernization in the last 20 years. But he is most impressed with the growth of students, especially at the doctorate level, who show newfound professionalism and a penchant for grasping the ideas behind technological leadership.

“Their students have shown the ability to absorb huge amounts of knowledge, and now they can stack up against anyone,” said Guimaraes. “They used to be out of the mainstream — as a result of having to catch up from the effects of Mao’s Red Book revolution — but in the past two decades have made tremendous strides.”

Guimaraes says China practices what he calls rampant capitalism at a regional level, and the country’s future power will depend on the national government’s decisions that affect business and industry. What decisions are best? He says the ones that create and support a stronger, wealthier middle class.

“Currently the Chinese middle class is working itself to death,” he said. “To maintain their income, cars, cell phones … they have to pay too high of a price in terms of working hours, stress and family sacrifices.

“But if the Chinese leaders nurture the middle class, they can build their own internal markets with tremendous buying power,” Guimaraes said. “China’s success depends on forming a strong middle class and staying away from the extremes of great poverty and great wealth,” he said. “If they nurture the middle class, China will reign as the main world power in 20 years.”

Guimaraes says Americans seem to have forgotten the same lessons and are seeing a deterioration of the middle class in the United States. The disparity of income is now much more prominent than during more prosperous economic times.

“In comparison, Japan’s middle class is relatively intact, although on a tight budget,” he said. “The Japanese government has managed to keep the herd together.”

Last summer, after studying the innovation process by many American companies, Guimaraes enlisted the support from his Japanese partners to duplicate and compare results against Japanese companies. That way he gained unprecedented access to some of the world’s most powerful companies and gained insight into their business innovation experiences. They compared U.S. and Japanese companies on competitive intelligence, information system support, how they implemented innovation, strategic leadership, and success from implementing business change.

“We expected America to be more advanced in managing technology and innovation,” said Guimaraes.

“However, the evidence didn’t support the theory. For example, a close look at the two largest Japanese construction companies revealed that they were on the leading edge of technological innovation.”

Guimaraes points to the natural and manmade motivations for Japanese leadership in this sector.

“They live on a group of islands, threatened by earthquakes, tsunamis and other weather-related threats,” said Guimaraes. “They have a huge public transportation infrastructure susceptible to interruption and vital to the economy. They weren’t waiting for America or Europe to lead,” he explained.

Guimaraes said even though there is a lot to be learned from the cross-cultural studies he conducts, different questions need to be asked to get an accurate picture of the future of businesses.

“The most important comparison turned out not to be between Japan and America, but between global and national companies,” he explained.

When questioned about the impact of business innovation and free trade among the many world economies, Guimaraes thoughtfully commented on the effects of free trade agreements right in the university’s backyard.

“What have we done?” he asked. “Look at Gainesboro before and after our so called free trade agreements. Gainesboro is America. There are thousands of Gainesboros.

“Theoretically, free trade is great, but trading jobs for cheap goods is a very bad idea,” he said.

(Spring 2008)