American German Business Club Berlin
Second Annual High School Business Plan Competition

Deputy Chief of Mission John M. Koenig  

Berlin, June 11, 2007

As prepared for delivery.

Mr. von Massenbach,
Ms. Petzold-Bradley,

Members of the American German Business Club Berlin,

Students and teachers,

It is a pleasure to participate in the award ceremony of the second annual business plan competition of the American German Business Club Berlin.  The Embassy is proud of its involvement in the competition.  I bring the special greetings of Ambassador and Mrs. Timken.  They are unfortunately not able to join you this evening.  Mrs. Timken is, however an honorary jury member.  She read and judged your plans — and Ambassador Timken read along.  They would both like to congratulate the participants for their initiative and creativity.  Thank you also to the teachers and the schools that participated. 

On behalf of the Embassy, I would like to commend the members of the American German Business Club who shared their time and experience with these future leaders. 

The competition is expanding exponentially.  Congratulations to the club on the success of the High School Business Plan Competition!  We need the vision, fresh ideas and inspiration that bright young minds can generate.

I have just come back from the G8 Summit in Heiligendamm.  The whole world saw some of the ideas – I guess you could call them innovative – that some young people came up with to make their opinions known.  Don’t misunderstand me.  The right to hold peaceful political demonstrations is a fundamental political right in a democratic society.  Such political liberties have a huge significance for the free flow of information and ideas in a democratic society. 

There are also, however, other channels for young people for positive and constructive engagement on the important political and economic issues of the day.  For example, the G8 leaders met with delegates of the Junior 8 or J8 Summit.  This year, nearly 2,000 young people from the G8 countries took part in a competition to win the chance to represent their country at Heiligendamm. They researched and came up with some of their own solutions to G8 agenda issues -- issues like economic development in Africa and other developing countries, HIV/AIDS, climate change and energy efficiency, and new challenges for the global economy.  The J8 program gives young people the chance to voice their opinions on global issues in a constructive format and raise their awareness of their role as global citizens. 

The way I understand it: that pretty well explains why the American German Business Club created this competition.  You wanted to give young Berliners a chance to develop a better understanding of local economic and political issues and, at the same time, to foster a sense of initiative and entrepreneurial spirit that is vital to the evolving issues in the global economy.  Again it comes down to ideas – and translating good ideas into action.

I am a diplomat, not a businessman.  The mentors in this competition will have more to say about good business ideas than me but as Deputy Chief of Mission, I am responsible for the management of the American Embassy here in Berlin and our five consulates in Germany.  Increasingly in government we are applying the same kinds of management principles as in the business world.  That includes encouraging innovation, learning how to create new programs with no additional resources, and cutting through the superstitions of experience that sometimes build up in bureaucracies.   It includes anticipating the obstacles, which could stand between innovation and successful implementation.  And it includes taking advantage of opportunities – and trying to create the circumstances that can lead to opportunity.  At the Embassy, many of our opportunities for innovation, especially in the area of exchanges, education and cultural programs, are based on public-private partnerships with business. 

My career with the U.S. State Department has taken me to embassies in both Europe and Asia.  I have learned that the business community – whether American, local, binational or multinational – is an indispensable ally in maintaining and developing international relationships.  I served from 2000-2003 as Principal Officer at the American Consulate General Thessaloniki.  I organized the largest U.S. public affairs event ever held in Greece to that time, “Honored Nation – USA” at the Thessaloniki International Fair.  It was very definitely a public-private partnership.

But our partnership with business goes beyond trade fairs, and cultural and exchange projects.  Foreign policy is not just the work of governments.  Business plays an essential role in promoting the global reach of free markets and free enterprise.

Since the end of the Cold War, no two parts of the world have experienced economic integration faster and more intensely than the U.S. and the European Union.  Increased investment, deeper economic integration, and more corporate partnerships all tie our business, people, consumers, workers, and farmers together.  Over one-third of global trade takes place between the EU and the U.S.  Our economies are the source of forty percent of the goods and services produced on this planet.  Altogether, mutual trade and investment provides close to one and a half million jobs in Germany and the United States alone. 

Every day companies on both sides of the Atlantic harness the benefits of opened markets brought about by global economic integration. The economic relationship is both a driver and an anchor of the overall transatlantic relationship.  The political relationship might experience ups and downs, but it is the deeper, mutually reinforcing economic relationship that will maintain the course.   Helping integrate this relationship even further is the catalyst known as globalization.

As we all know from last week, globalization is a term that is thrown around a lot – and I believe it is often misunderstood.  Globalization is making the world smaller, faster, and richer. It has brought tremendous changes. The economic and business interests of Germany and the United States are a good example of how open markets, a stable financial system and global economic integration have created better lives for people. 

On a more personal level, I see how globalization has influenced my home town.  I am from the Seattle area.  Seattle is a port city so it has always been open to change but in the last few decades, Seattle embraced the global economy in a big way.  The city changed radically and fast — and on balance for the better.

Seattle is the home of a number of American companies that are synonymous with what I believe are twin concepts – namely, globalization and innovation.   That includes companies like Amazon, a world leader in internet marketing.  I recently visited the distro center in Leipzig.   Starbucks is also a Seattle company.  Its marketing model focuses on staff entrepreneurship and customer satisfaction. 

Another Seattle company is Boeing.   It gambled big on the 747 and won.  It now seems to be winning another gamble with  the 787 Dreamliner.   Airbus is Boeing’s chief competitor.  That competition has been good for both companies because competition promotes innovation. 

Microsoft is probably the most well known Seattle company.  It started very small back in the mid-1970s and grew very fast.  Bill Gates was a Harvard dropout.  He never graduated from college but he worked hard and collected a hard-charging group of people to work with him — including a few of my friends.  This year Bill Gates returned to Harvard to give the commencement address at the graduation ceremonies.   He recalled the energy and intelligence of Harvard and the fact that an extra credit project for which he wrote software for a company in New Mexico that had begun making the world’s first personal computers marked the beginning of Microsoft. 

But Gates also recalled that he left Harvard with no real awareness of the inequities in the world — the appalling disparities of health, and wealth, and opportunity that condemn millions of people to lives of despair.  He said he learned about new ideas in economics, politics and the sciences.  It was not clear, however, to him back then that humanity’s greatest advances are not in its discoveries — but in how those discoveries are applied to reduce inequity.  That too is the essence of globalization. Some twenty years after he started Microsoft, he established the Bill and Melinda Gates Foundation.  In the past decade, the Gates Foundation has pledged close to $10 billion dollars to good causes in the fields of education, health and development. 

Microsoft co-founder Paul Allen gives major support to biotech and other cutting edge start-ups.  He plays a strong role in the community — supporting sports events and cultural innovation.  He conceived one of America’s most exciting museums — the Experience Music Project.  Allen had a passion for Jimi Hendrix.  His collection of Hendrix memorabilia was the basis for a museum with a broader cultural mission.  The Frank Gehry-designed building that houses the Experience Music Project features a world-class collection of artifacts reflecting the essence of rock 'n' roll, from its roots in jazz, soul, gospel, country and the blues, to its influence on hip hop, punk, grunge and other more recent genres.   He has created a destination for celebrating musical innovation.

Seattle is one example of how all the various aspects of globalization come together.  You will notice that I am a fan of my home town.  But being a home town patriot does not prevent me from being a confirmed internationalist.  And I hope that you all feel the same way about your home town – Berlin. 

Undoubtedly in the future, globalization will present unprecedented challenges that will require creativity and resolve.  One-third of human beings now live in places where the standard of living may increase 30 fold in a single human lifespan — a transformation that dwarfs what we call the Industrial Revolution. 

In the final analysis, globalization is about choice, about seeing things changing elsewhere in the world and wanting to be part of it.

Again it’s all about ideas.  As Michael Dell, the Texas entrepreneur who broke all records by building Dell Computer Corp. into a billion-dollar company before he was 25, says "ideas are commodities."

In both the United States – and it’s the same here in Germany – inventors, business leaders and entrepreneurs have played an important role in shaping our national culture.

The capacity to seize opportunities and the ability to adapt enterprisingly is a part of America.  The story of people like Levi Strauss, the 24-year-old German immigrant, who came to California from New York during the 1849 gold rush to make tents and covered wagons and stayed to make blue jeans for miners is America’s story.

Some companies have started in garages -- companies like Hewlett-Packard in 1939 and Apple in 1979.  They are also part of that story of ideas linked to opportunity.

When Ted Turner created CNN in 1980, he said. "Do you know why we're going to be such a big success and why I'm going to make a billion dollars? It's because people know things are screwed up and they're looking for a change."

The ability to change and adapt is something that never becomes irrelevant.  Back in the early years of the automobile industry, Henry Ford defined his market by saying that his customers could have any color car they wanted -- as long as it was black.  He did not see the advantage he was handing to his competitors. 

In the 1970s, IBM kept an eye on a handful of big, established rivals but it ignored the young Apple Computer entrepreneurs in Cupertino, California in the heart of what became Silicon Valley. 

In the future, that same combination of good ideas, technological innovation and taking advantage of opportunity will be essential. 

One of the topics that leaders discussed last week at the G8 in Heiligendamm was climate change.  They discussed ways to actually accomplish their common objective of reducing greenhouse gases.  They agreed that to achieve reductions the development of transformational environment technologies was essential.   In the United States, the federal government, state governments, local governments, America's private sector and nongovernmental organizations have been following this strategy for some years.  Since 2001, the federal government of the United States has invested over 30 billion dollars in climate change research.  There has been significant spinoff to entrepreneurs around the country.  In addressing the challenge of climate change, I wouldn’t be surprised if, fifty years from now, some of the names of those environmental tech companies were written in the history books alongside the names of other well-known American business brands.

So let me conclude with a word to the participants in the 2007 American German Business Club Business Plan Competition.  The world faces new and unforeseen challenges but there are also unprecedented opportunities for collaboration and innovation. Our era is one of momentous transition and transformation, one in which there is an unprecedented openness to new ideas.  There is room for big dreams.  With your energies, ideas and fresh eyes, I know you will make your dreams come true and enrich the world in the process.

Congratulations and best wishes to you all.