In a recent real estate transaction in Toronto a bungalow was bought for $400,000 CAD over the asking price, for a total of $1,200,000 CAD. The buyer was a Chinese student whose parents live in China and have a business in San Francisco. The state of the Canadian real estate market where offshore bids drive the real estate prices up and price Canadian out of the market left Canadians asking for government protection.

I am writing these paragraphs on the way home from an industry trade show in Germany.This is not so much a Marketing article but my thoughts on how the world is changing around us. Traveling abroad and meeting people from different parts of the world always brings a new perspective to my current beliefs.

While in Germany I learned that Brazil has surpassed the UK in becoming the world’s sixth largest economy. India and China are experiencing economic growth in the double digits. At the same time well-established economies of the Western Europe cannot seem to find their way out of the financial trouble.

The obvious question I asked myself is “How do we, the representatives of the Western society (loosely defined as North America, Australia, Europe and Japan), be it countries, companies or individuals, compete in this new environment? Is there a need for a new, more meaningful value proposition definition? Are we willing and ready to change as fast as the world around us is? Or do we choose to stand still, ignoring the trend and pretending nothing is actually happening?

Instead of asking for protection we have to first accept the reality, understand it and redefine what we have to offer to the world. I am not sure a lot of companies and individuals are willing to do that. Many of them are happy with the current comfort level don’t aim for more. However in order to remain competitive we have to open our minds and take advantage of new opportunities, while avoid thinking and acting based on old cliches.

The industry trade show in Germany was a representation at the micro level of the new economic reality. Two thirds of the exhibitors were from India, China and Taiwan, while Europe was very poorly represented. I was amazed by the way some of the Asian companies have presented at the show, starting with the quality of their products, the aggressive pricing and modern marketing.

Many of the Asian companies started as manufacturers under private label for well-established Western brands. While Europe and North America struggled with the recession, they invested heavily in new technology and know-how. Many of them have refocused on building their own brands and and cancelling the private label programs. On a personal level I get more inquiries from entrepreneurs from that part of the world than from North America or Europe. They are all very smart, highly educated and interested in expanding their business.

Bottom line, the Western society has to  re-define its value proposition. Otherwise we run the risk of becoming irrelevant on the world stage. It’s not going to be manufacturing (the battle has already been lost) or financial power (China is the largest holder of U.S. debt).

So what’s left for us? Innovation maybe? This is an open question with no easy or obvious answer.

I am very interested in your perspective on this matter.

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