Wharton to Size up Prospects for Business in Cuba: MBA News

The Wharton School’s online business research and analysis journal, Knowledge@Wharton, has announced a new conference for senior executives that will assess opportunities for doing business in Cuba.

The ‘Cuba Opportunity Summit’ follows Barack Obama’s highly publicized move to seek a new approach towards Cuba.

In December, the US president stated his intention to end a trade embargo that has been in place for more than 50 years, since the early years of Cuba’s revolutionary era led by Fidel Castro and Ernesto ‘Che’ Guevara. It has been estimated that the embargo has cost Cuba’s economy US$1.1 trillion in that time as well as US$1.2 billion each year to the US economy.

“President Obama’s move to normalize relations with Cuba offers an unprecedented opportunity for North American corporations. Many firms will be considering how to gain a first-mover advantage in this emerging market,” said Mukul Pandya, Knowledge@Wharton’s editor-in-chief, who will host what is intended as the first conference in a series that will also take place in Havana.  

Academics from the Wharton School to offer insights alongside Cuban experts

The prospect of a new market opening up less than 100 miles away from the coast of Florida has certainly stirred the interests of US companies. Wharton’s conference, held in collaboration with the Lauder Institute, is therefore targeting senior decision makers who might be weighing up the benefits of doing business in Cuba.

Academics from the Wharton School are set to join experts in the region to offer their insights into the prospective challenges and opportunities pertaining to a number of industries, including tourism, infrastructure and retail.

One of the co-chairs will be Mauro F. Guillén, an international management professor at Wharton and director of The Lauder Institute:

“Unleashing Cuba’s potential in the global economy is essential to fostering change from all perspectives, and it will hopefully lead to a more integrated Caribbean region,” he said. Guillén, who hails from Spain, combines his role at the Wharton School with a sociology professorship at the University of Pennsylvania (Wharton’s parent institution).

Intricacies of doing business in Cuba

The Wharton School summit is set to be held in New York City on April 1, a date which raises the question of whether US businesses would be foolish to think that Cuba is simply a market there for the taking.

Indeed, the agreement between Obama and Fidel’s brother, Raúl Castro, doesn’t mean we’ve heard the last of the island’s anti-capitalist Castroism.

A recent article in Businessweek focused on the inherent realities of doing business of Cuba, in terms of the bureaucratic and infrastructure challenges:

December’s development “doesn’t mean there’s a capacity to do business in Cuba tomorrow,” according to Julia Sweig, senior fellow and director for Latin America studies at the Council on Foreign Relations in Washington.

Meanwhile, an opinion piece in Canada’s Globe and Mail points out that opportunities may be more forthcoming for those operating from the US’s neighbor to the north because, it argues, Canadians are held in greater esteem by Cuba and are “viewed as polite and not exploitative.” 

However, the motivation behind the Wharton School’s upcoming conference is to survey this landscape in its entirety, including the cultural and political challenges.

December’s accord is clearly a huge step on the part of both countries, yet restricted trade with Cuba has been in place since the turn of the century. According to the New York Times, the US is already the fourth-largest exporter to Cuba, behind China, Spain and Brazil.

A more cordial relationship between the two should therefore see this trade gather pace, and industries such as tourism, aviation and agriculture have been highlighted as those where the potential may be greatest. Investment in golf courses has also attracted attention, the anticipated coming of which has been labeled as a serious departure from the principals of Cuba’s leadership in itself.