By Charindra Chandrasena DFA Intercultural Global Solutions President Dean Foster has been involved in researching, writing about, and consulting on the nature of culture and its role in society, work, and politics in a globalising world for over two decades. As Founder and former Worldwide Director of Berlitz Cross-Cultural, as well as the current Founder and President of his own company based in NYC, Foster has played a central role in the development of the field of cross-cultural training and consulting. Foster works with most major Fortune 500 companies, national governments, and NGOs (the United Nations and World Trade Institutes, among others), and as a guest lecturer and faculty member for a variety of premier educational institutions, such as Harvard Business School, Columbia University School of Business, NYU, Darden Business School, and others. He is the host of CNN’s “Doing Business In…” series, a frequent guest commentator on culture, global work, and social issues for CNN, CNBC, the BBC, and other radio and TV shows; and has been interviewed in Newsweek, USA Today, the New York Times, and elsewhere. While visiting Sri Lanka on holiday, The Sunday Morning Business caught up with Foster for an exclusive interview where he discussed the issues around bringing in skilled workers from abroad, the importance of overcoming cultural barriers for businesses, and Sri Lanka’s attractiveness as an investment destination. The following are excerpts of the interview: Sri Lanka recently moved up 11 places in the World Bank Doing Business Index, but it still sits at 100th place. In your experience, how influential is this index on companies’ investment and expansion decisions? Well, it is a major factor because it’s a viable set of facts about the ease with which business could be conducted in another country. However, you can make yourself attractive in other areas. Businesses are very practical and will look at the opportunities and advantages. Beyond the index, there may be new compelling reasons why we need to be in Sri Lanka for a particular business, for a particular industry. So the index is a consideration, but there may be other factors. The more you can highlight those and make a compelling argument, practical businesspeople will weigh up the pros and cons and reach their decisions. What are the most important factors that need to be in place to encourage foreign companies to invest in a country? Broadly speaking, making it easier and not harder for investments to come in. Financial, political, and bureaucratic complications make it harder. That’s number one. Number two is a legitimate and dependable legal system to inspire confidence in investors. It’s about having a welcome sign and making them feel comfortable that they can depend on the legal system. There has to be minimal corruption and dependable ways in which people can protect their investments from being misused. The more you manage this correctly, the better the result would be. Singapore was always very strong on this. They always welcomed outside investments and then that little island nation grew very wealthy, very quickly. Singapore is multicultural with Chinese, Tamils, Arabs, and Muslims, but they allowed for the benefits to be shared with everybody. Not always fairly, and everyone can complain, but in general, everyone benefited more than they suffered. As you know, Sri Lanka is currently in the midst of a political crisis. How damaging is this, and do you think investor confidence would be restored as soon as the crisis ends? I think it depends on how quickly you can fix it. Here is the good news. It’s been my experience that businesses are very forgiving when it comes to political situations. They will overlook a great deal if there is an economic benefit to them. However, if it looks like it’s going to take too long and there are too many immediate problems then they will look elsewhere. If they see opportunities somewhere else, then that will become Sri Lanka’s loss. I think the sooner you can get over this immediate crisis, the quicker things can move forwards. In Sri Lanka there is a certain apprehension about labour migration into the island, mainly by professionals and associations that are concerned about losing jobs to foreign workers, and a lack of job security for locals. How should a country handle such an issue? There’s short-term thinking and long-term thinking. If individuals are going to think short term, they are going to see only the immediate pressure. This is why you need to have strong people, and you need to have dependable systems that can withstand short-term pressure from individuals who fear their jobs being taken away. Then there is the long-term thinking – and I know it’s difficult but politicians and businesspeople need to think long term. If there is an investment, in the short term, it may make certain jobs vulnerable, but in the long term, these investments have been proven to produce more jobs than they displace. However, this doesn’t happen immediately, so you need people with vision who can explain this to the public and who can also protect the most vulnerable jobs, so that if they are displaced, they can do something else. Not an easy thing to do. We struggle with this in our country and many countries, and no doubt in Sri Lanka as well. But I think ultimately, we got to always think long term, because it produces more jobs than it takes away, and that is just a short-term event. Why are foreign workers needed for an economy? In a small market, it may be necessary to find skilled people from outside the country to address a skills shortage. Even though it may make people inside feel that foreigners are coming in and taking their jobs, you need levels of excellence in order to compete globally. There have been experiments in different countries where, in order to protect the jobs, they kept the foreign investors out. They built a wall around themselves and didn’t bring in the expertise they needed. It protected the jobs for a limited amount of time, but ultimately the countries became non-competitive. Brazil in the 1980s is a good example. They disinvited competition from other countries. Brazil is a large country but they still didn’t have all the expertise they needed to compete in the 21st Century and the economy just got worse and worse. If you open up, you get foreign investment and the expertise, but you also risk some of the jobs. If you can take care of those jobs in some other way and still bring in what you need, then the economy grows and everybody benefits. This is what I mean by short term and long term. What measures could be taken in the short term? Short-term solutions I think can be any number of things. In the US, the short-term solution is usually the responsibility of the private sector, but I don’t think it needs to be, and I think for many countries, the short-term solution needs to be the public sector. It needs to be a government initiative to protect the jobs of those who are being displaced by foreign investment and to help them retrain and to find some other kinds of jobs. How important is cross-cultural understanding when it comes to doing business internationally, and attracting foreign companies to set up or expand in one’s country? We help individuals and businesses understand the culture to be able to talk with the people more effectively. This is to learn what they need, how they think, how they negotiate, their expectations, how they make decisions, and how they solve problems. Every culture does these things differently. What we do know is that, in the 21st Century, those companies that can manage these human issues are the ones that ultimately succeed. Everybody has their hard skills and expertise. If they are being trained to do a job, they will know how to do that job, but that’s not the only skill that matters anymore. We also need to be able to understand how to communicate with people from a different culture who think differently. So if we have a company from China coming into Sri Lanka, the Chinese have to understand how you do things in Sri Lanka and how Sri Lankans want to work. Similarly, Sri Lankans have to understand how the Chinese think. If the lines of thinking are different, they have to meet each other half way, learn about the other, and begin to value those things about how they work that may be beneficial to you. Do you think Sri Lanka is capable of transcending these cultural barriers to create a foreign investor-friendly business climate? I think Sri Lanka’s experience can help others. We have many different cultures in this island who have successfully and sometimes unsuccessfully worked with each other. You have these experiences, knowledge, and understanding. You know how important it is to manage these cultural differences because you know the consequences if you don’t. And that’s a great lesson that Sri Lanka can teach the rest of the world. Are there essential traits which people should possess, irrespective of cultural differences, to ensure a venture becomes successful? Yes. You need skilled people and people who know what they are doing. You need to be able to communicate with them. I understand in certain cultures, countries, and industries, it may be very hard to find skilled people; but you have got to do what you can to make sure that people are performing at levels of excellence at all times. That is very important and if they don’t have the skills, you have to find ways to train them. What is your assessment of the Sri Lankan workforce? I think there are differences in the different age groups. The youth in particular are eager to join the 21st Century but are struggling to figure out how to do that. There are lots of advantages of working in Sri Lanka in a global world. A workforce that is, for the most part, young, educated, and English-speaking, and who recognise that they can’t keep doing things the old way forever. These are real advantages that you don’t find everywhere.