Interview: John Rice
In which sectors can Mongolia develop a competitive advantage over its regional neighbours?
JOHN RICE: Mongolia has a small population with a lot of natural resources, and in my opinion, a very bright future. However, Mongolia must continue to invest in and advance its education, training and leadership development. The interest that many companies have shown in the country – specifically in Mongolia’s raw materials wealth – must ultimately contribute and benefit the society. What will accelerate or impede this process is the development of talented leadership. Each time I visit Mongolia, I encounter a pool of bright people who have been trained at leading educational establishments and worked at renowned private institutions. They have chosen to come back and invest in the development of the society, and this is an important point. However, much more is needed.
Talent scarcity is an issue throughout the economy in Mongolia, and having the right recruitment, development and training capabilities is key.
How can policy makers encourage the development of a knowledge-driven economy?
RICE: Policy makers should start with universities and schools that educate the type of people who could contribute to the next generation of innovations. Also, rules and laws that protect intellectual property must be strengthened; this is a challenge throughout developing markets. It is important for people to understand that innovation never takes place in just one location.
If we look at the thousands of technologies and products that GE has introduced over the last 10 years, all our significant innovations have been a result of global collaboration with engineers all over the world. Building the tools and the capability to ensure that that partnerships can take place is an essential part of developing a knowledge-based economy that facilitates innovation. The market in Mongolia is small, so attracting innovative companies to set up operations and export those ideas is essential. There are already several innovators and capitalists in Mongolia, but the country needs more. Mongolia’s neighbours can compete with their volume of manpower; Mongolia has to compete with intellectual capacity.
How can the country improve its level of attractiveness to Fortune 500 companies?
RICE: Fortune 500 companies look for openness, transparency and a level playing field; under these terms we will be able to compete fairly and win our share. It is also important to have rules that do not change overnight without warning, and regulations that are reasonable and allow us to get a return on our investment. Capital can flow anywhere in the world, so countries are either going to attract capital or push it away based on their rules, laws and treatment of investors.
When there is a welcoming environment, we want to invest and develop. We have seen real progress in Mongolia, and as a result, GE has announced a deal of $50m to supply wind turbines to Mongolia’s first wind energy project in partnership with Newcom, which will provide almost 5% of the country’s electricity needs. We would not make a commitment of this nature if we did not feel comfortable about the market environment. We are investing in the future of Mongolia.
What specific factors had an influence on GE’s decision to make investments in Mongolia?
RICE: The entry into Mongolia is a strategic move by GE that recognises the burgeoning demand for renewable energy in a number of regions around the world. Our investments in Mongolia highlight GE’s global growth strategy in one of Asia’s fastest growing countries with a wealth of natural resources.
Mongolia’s electricity demand is expected to double in the next 15 years. We are introducing advanced technology that will pave the way for renewable energy projects to meet some of this demand. This underscores our commitment to development in one of the most challenging yet fastest-growing emerging regions.
Read More from OBG
