The Shanghai Expo recently held its closing ceremony, with the long, congratulatory speeches made by the usual cadre of political types covering the usual ground, but much was left unsaid.
The Shanghai Expo is part of a tradition of international world fairs and expositions that began in 1851, when the Great Exhibition of the Works of Industry of All continents was held in London. Organized by Prince Albert as a showcase for Victorian England’s power and accomplishments, it became an international triumph. It was a new vehicle for England’s technical and industrial prowess, which created a line of eager emulators from both Europe and America.
Between 1851 and 1984, the United States dominated the hosting chores with 17 World Fairs and Expositions. Both Chicago and New York hosted twice. Given that the Shanghai Expo is the 41st, it demonstrates the dominance we once had in this area.
Over the years, the nature of the beast has changed from a showcase for technical and manufacturing to cultural exchange and tourism and now to a national branding exercise, where the main attractions are increasingly extravagant national pavilions.
The cost of these pavilions, which was estimated at $13 million at the 2000 Expo in Hanover, has continued to soar, even as the benefits to those putting them up has continued to be debated. However, national pride and jingoism are powerful forces, and each new expo has succeeded in attracting more and more national and corporate participants.
The Shanghai Expo attracted 192 countries and 50 international organizations. The pavilions varied in cost and complexity. India paid $9 million for its pavilion, which emphasized its traditions, while Saudi Arabia invested $154 million on a technological extravaganza. It was estimated 70 million people would attend, and 73 million showed up. The largest one-day total of visitors exceeded 1 million. The festivities lasted 184 days and took place on the largest Expo grounds ever created, 5.28 square kilometers (3.28 square miles). The cost to Shanghai was 28.6 billion RMB ($4.19 billion U.S.), but the figure does not include huge additional infrastructure costs associated with the project.
Of all the buildings put up, only five will remain after the Expo is finished. The rest will be dismantled and moved. The theme of the Expo ‘Better City Better Life’ was carefully chosen to underline China’s rapid rush towards urbanization. Twenty thousand performances were held on the grounds, while 560,000 volunteers registered, trained and participated. In addition, hundreds of thousands of paid workers were brought in to operate the restaurants, perform in the shows and operate the 4,000 licensed shops on the grounds. Outside the grounds, the hotels, restaurants, shops, tour guides, trains, planes and automobiles required even more workers. For those not attending the Expo, life was difficult, business travel to and from Shanghai became a nightmare of delayed flights and unobtainable hotel rooms. Those living and/or working in Shanghai had to rearrange their days to deal with roads which were already impossible before the Expo. In the end, though, it was a massive success for Shanghai and China, as it brought its message to one of the largest audiences ever assembled and collected a tidy economic windfall in the process.
On a more nationalistic note, the U.S. pavilion, which was organized at the last minute, became mired in scandal as allegations surfaced over connections between Nick Winslow, the USA pavilion president and CEO, and the USA’s pavilion’s chief contractor, BRC Imagination Arts of Burbank, Calif. Winslow ended up resigning as an officer but stayed on the board. Many questions remain about the $61 million the United States spent on an effort that was underwhelming at best.
With that background, what was not said at the Expo’s closing ceremony was that this is another example of how seriously America is falling behind in the race for success. China will be facing some tough times in the near future, but the major defining difference between us and China is increasingly attitude. While we squabble amongst ourselves in the vain hope that some political magic will make the economic pain go away, China is building its infrastructure and planning their economic strategy.
Yes, even though China is in for a sharp economic shock at some point in the next few years, the problem is what is going to happen over the next 15 to 20 years, as their capabilities and markets mature, and we continue to look for easy answers. We are no means out for the count, but we need to work better, if we are going to keep up with China and some of the other emerging nations.
Think about it. If each of the 73 million attendees spent a modest average of $100 per visit, including travel transportation, meals, tickets and souvenirs, by hosting the Expo, China created a $7.3 trillion event before any economic multiplier effect. Is this conservative? Yes, but the real question is, wouldn’t we have been better off investing $6.1 billion to host the event and have gotten a return rather than spending $61 million and getting little more than embarrassed?
The larger question is: Can we afford to let China take the lead and wonder why we feel left behind?
