Keynote address to the 2008 Canadian Council for Aboriginal Business 6th Annual Vancouver Gala Dinner by Milton K. Wong, Chairman, HSBC Investments (Canada) Ltd.

…The word “multinational” wasn’t even coined until about 1960. But since then, we’ve been living in a world where the need to specialize—and rely on other specialists— has grown ever more apparent. It’s much harder now to operate your business as an island unto itself. In this era of globalisation and technology, you need suppliers, partners, allies and collaborators—and yes, you even need your competitors. The increasingly complex demands that globalisation and technology are placing on the resources, services, skills and knowledge that businesses can offer require more collaborative ventures. The very nature of competition in business has changed.

American author Gore Vidal once wrote, “It is not enough to succeed. Others must fail.” Does that sound familiar? This attitude once characterized the business world. But today, a business that initiates a war by bringing this attitude to the game may be headed for failure. The airline industry is a good example. By trying to drive each other out of business through price wars, airlines have made it much more difficult for themselves to make profits.

The idea is not to get in bed with a direct competitor, of course, but rather to court another business that complements yours and devise mutually agreeable terms that help both of you get ahead.

Now you may be thinking: Isn’t that exactly what American consumers, banks and investment firms were doing when the financial crisis exploded? And true enough, the capital markets themselves are a huge collaboration. So why am I standing here promoting collaboration if a widespread crisis like this is what can come of it?

There are certain conditions that make collaboration effective, and the current financial crisis occurred in the absence of those required conditions. The key missing ingredient was common moral sentiment among the collaborators. From the hapless homeowners who couldn’t even afford a downpayment to the denizens of Wall Street and on to the banks of the world, the various players were not working from the same book of rules when they joined the game.