Growing up in Prairie du Sac, Katy Sinnott never imagined she’d spend more than 20 years or her life living and working in China.
Sinnott, the new vice president of international business development at the Wisconsin Economic Development Corp., credits a professor at her alma mater, UW-La Crosse, for sending her to Asia as an undergraduate.
“That professor had a profound impact on my life,” said Sinnott, who started her new job at WEDC in October. “She helped me get a scholarship through Yale to study at Chinese University of Hong Kong.
“In my youth, I’d always been intrigued by the possibility of living internationally, but I had no idea that I would eventually spend two decades in China – not to mention traveling all over the world.”
She said she felt a “great affinity with Hong Kong” when she first arrived. That only increased when she moved to Beijing. Sinnott said “both environments were very challenging and exciting, which met my needs at that time for professional and personal development.”
After studying Chinese for nine months in Hong Kong, Sinnott got a job there with HSBC, one of the world’s largest banking and financial services organizations. She also worked in Hong Kong for McKinsey & Co., a global management consulting firm.
With four years of experience under her belt, Sinnott decided it was time to go to the Chinese mainland.
“I felt with my finance background and an interest in IT, that China was the best place to be,” she said. “I saw that it was a growth area 20 years ago, so I moved to Beijing.”
Sinnott said she saw enormous changes during her time in China’s capital. During her last three years there, she was the CEO and a board director for a chain of beauty salons based in China. Under her leadership as CEO, the company expanded from three salons to 38.
“When I first moved to Beijing, nobody owned a car,” she said. “There were only government cars. Then about 1999, I was one of the first foreign women to drive a car in Beijing. In 2000, I saw for the first time a young woman driving a small car and I thought ‘Here it comes.’ Then within three years, the city was congested with cars.”
Sinnott said she never encountered any difficulties as a female executive in China.
“From my perspective, I found that in Asia there are many high-powered women,” she said. “You will see many billion-dollar family businesses that are run by women.”
She said, diplomatically, that it is often a “challenge” for foreign companies doing business in China to maintain ownership of their intellectual property but that China is making “enormous efforts” to control IP theft.
“It is a large country and it is difficult for the central government to regulate it,” she said. “I think any company that is going to go into any other country, there has to be consideration about intellectual property security.”
She said the owners of a computer program would be wise not to take its most important algorithms to China.
“And I’m sure that Coca-Cola doesn’t take their recipe there,” she said. “I think you have to find a balance so that you have the trust of the companies that you are working with. But you also have to protect yourself. That would mean maintaining your highest security on that which defines your product and not take that abroad.”
Sinnott said she also has seen the move by some American firms to “re-shore” their manufacturing by moving it back to the United States because of rising costs and logistical problems.
“I think re-shoring will continue to happen because we have here a highly educated workforce here that has perhaps fewer production issues,” she said. “And you are closer to your (domestic) customers.”
Still, if a company is making products for the Chinese market, it makes sense to manufacture there.
“I think what has happened in China, while it is good for the population with the increases in the labor laws and the increases in the social benefits and retirement funds, is that it has made the production there more expensive,” she said. “If you couple that with the (distribution costs and the) possibility of lots of production issues because it is harder when you are working across different time zones, many companies have seen that it is economical to be near their customers.”
Sinnott said she especially enjoyed her salon company experience.
“That industry is one of the best to be in because it makes people smile,” she said. “It actually gives a psychological boost. So I found that exciting and I found the enthusiasm of our local staff to learn really incredible. Because when I started there, very few people could cut at the qualities expected internationally. But prior to my departure, I had world-class hair dressers.”
Sinnott said she hopes to boost Wisconsin’s exports, which have been flat for the past four years at around 9 percent of the state’s GDP.
“We are doing relatively well, but there is some room for improvement,” she said. “We are making strides, encouraging companies more and more to export.
“Since 2010 there have been very small incremental increases. But if you look at the seven counties around Milwaukee, you’ll see a significant uptick (with) about 15.4 percent of their GDP is made up of exports. We have other pockets that are doing incredibly well. That would include Madison, Oshkosh and the Green Bay area.”
She said Canada remains the state’s biggest market. Wisconsin sends 33 percent of its exports there. In second place is Mexico with 11 percent, while China is in third at 7.2 percent, Japan is fourth at around 4 percent and Germany is fifth at around 3 percent.
“Roughly 45 percent of our exports go to our neighboring countries,” she said. “But they make up only about 4 percent of the world’s GDP. So we really have an opportunity to export more into Asia, European countries and Africa.”
Sinnott said the WEDC will continue to promote the state’s advanced manufacturing capabilities. But she said she also wants to push some of Wisconsin’s growth areas, including the water sector.
“We see that we are becoming leaders with our water council in Milwaukee, which is recognized internationally now. We’d also like to look at the power and energy services that are coming out of M-WERC, (the Milwaukee-based Midwest Energy Research Consortium).”
Sinnott said she returned to Wisconsin in part because she missed her family and because her son has asthma, which was a problem in Beijing’s legendary smog.
“Twenty years is a long time,” mused Sinnott, who said the WEDC is the ideal workplace to apply her skills. Better yet, her son’s asthma has improved significantly. And, she said, he’s become a big Packer fan.
Sinnott said she anticipates returning to China to promote Wisconsin exports.
“There are many opportunities in China, Japan, Korea, Malaysia and all over Asia,” she said.
But for those companies that are only beginning to think about exports, she recommends starting with Canada and Mexico. She said her office will run a trade venture trip to Mexico from March 1-7 and a separate trip to Toronto and Montreal from March 15-20. For more information, visit http://inwisconsin.com/exporting/goglobal/.
— By Brian E. Clark