The Economist 29Feb2020

The EconomistFebruary 29th 2020 Business 55

“A

career bookabout Asians? Aren’t

they doing fine...?” So begins “Break-

ing the Bamboo Ceiling”, a tome by Jane

Hyun published in 2005. Because Asian-

Americans had higher incomes and educa-

tion levels and committed fewer crimes

than their average compatriot, they were

seen as a model minority. Despite this, they

rarely rose to the top of companies. A mix

of individual, cultural and organisational

barriers—the “bamboo ceiling” of the

book’s title—seemed to halt their rise.

Fifteen years later Asians are still un-

der-represented. Some 11% of associates at

American law firms are Asian, but only 3%

of partners are. In technology Asians make

up over 30% of the workers but less than

15% of bosses. In 2017 Asians made up

roughly 6% of the country’s population but

only 3% (16) of the bosses of s&p500 firms.

Some prominent Asians run big compa-

nies. Arvind Krishna is ibm’s new boss. Sa-

tya Nadella runs Microsoft and Sundar Pi-

chai leads Alphabet. But few other Asians

have joined their ranks—and, revealingly,

these stars all have Indian roots. There are

fewer South Asians in America than East

Asians, but they still made up 13 of those 16

Asian s&p 500 ceos.

Why are there so few Asians among

America’s business elite? And if a bamboo

ceiling is to blame, why do South Asians

break through more easily? These ques-

tions are the focus of a study by Jackson Lu

of mitSloan School of Management and

colleagues, who surveyed hundreds of se-

nior executives and business-school stu-

dents. They found that while discrimina-

tion exists, it is not destiny. South Asians

endure greater racism than East Asians but

still outperform even whites (if success is

weighed against share of population).

Their research also rules out lack of ambi-

tion: a greater share of Asians than whites

strive for high-status jobs.

That leaves culture. The researchers

conclude that South Asians tend to be more

assertive than East Asians in how they

communicate at work, which fits Western

notions of how a leader should behave. The

same propensity for confident discourse

featured in “The Argumentative Indian”, a

book by Amartya Sen, a Nobel-prizewin-

ning economist. The researchers attribute

East Asians’ reticence to Confucian values

of modesty and respect for hierarchy.

Sometimes boldness and bombast are

needed to break bamboo. 7

NEW YORK

A provocative study examines Asians

in American corner offices

Diversity in America Inc

The benefits of

being bold

A

lberta haslured many an oilman in

recent years. Tapping new wells of

thick Canadian bitumen and processing it

into crude is expensive, but the break-even

oil price for operating an existing one can

be as low as $25. Large reserves and low de-

pletion rates mean that companies can of-

fer measured growth and attractive divi-

dends. Instead of lubricating profits,

however, Canada’s tar sands are bunged-up

with protests against new pipelines. Most

international oil firms have fled. The latest

firm to retreat is Teck Resources. On Febru-

ary 23rd the Canadian company scrapped

plans for a C$20bn ($15bn) oil-sands mine.

Canada has not yet aligned “climate policy

considerations” with “responsible energy

sector development”, wrote Teck’s boss,

Don Lindsay. Without regulatory approv-

als, an investment partner, new pipelines

and a high oil price, Teck might as well have

sought the Moon.

Things are looking rather different

south of the border. Fracking a virgin shale

bed is simpler—and cheaper—than mining

a new tar pit. American crude production

surged by 94% from 2011 to 2018, hitting

Canada twice over: by pushing down the oil

price and sucking away investment. Cana-

dian oil output rose only two-thirds as fast.

Chevron and ExxonMobil are among the

global energy giants to pump capital into

America’s vast Permian basin in Texas and

New Mexico; the pair will present spending

plans to investors in March.

But frackers, too, have headaches. Many

have grown fast but spent faster. Returns

tend to be meagre, as the quick decline in a

well’s output has led firms to drill new

ones. Low gas prices have hurt firms spe-

cialising in fracked gas most, though oilier

producers have also struggled. An analysis

of the top 39 public shale oil companies by

Rystad, an energy-data firm, found that

cashflow from operations exceeded capital

spending at just one in four firms in the

third quarter of 2019.

Now American companies may begin to

behave more like Canadian ones, says Ben-

ny Wong of Morgan Stanley. Investors have

urged frackers to grow more slowly and re-

turn more cash to shareholders. Top shale

firms are listening. In November Pioneer

Natural Resources raised its dividend and

said it would pursue more modest growth.

On February 18th Concho Resources and

Devon Energy, two companies with assets

in the Permian, told investors that capital

spending would be lower this year. The

companies raised their dividends by 60%

and 22%, respectively.

Shale firms’ slowing growth may reflect

geological and technical limits, too. Bob

Brackett of Bernstein, a research firm,

points out that productivity per square foot

declined in all but one of America’s main

shale basins last year. As the richest wells

are depleted, remaining sites will require

higher prices to be drilled profitably. Amer-

ican government forecasters expect do-

mestic oil production to reach 14m barrels

a day by 2022, then plateau. Others expect it

to taper off sooner. Scott Sheffield, Pio-

neer’s boss, told investors last year that the

opec cartel of oil-producing countries

probably does not need to worry about fur-

ther growth in American output.

America may turn more Canadian when

it comes to regulations, too. Unlike Justin

Trudeau, Canada’s prime minister, who has

struggled to balance oil interests with envi-

ronmental ones, President Donald Trump

has simply ignored conservation and the

climate. He has allowed drilling on federal

lands and eased rules for planet-cooking

methane emissions. But the shalemen’s

political problems may mount. Low gas

prices led to a surge of flaring last year,

prompting a Texas regulator to propose

curbing the practice, which would incon-

venience firms. On February 24th the Su-

preme Court heard a suit to block a new

shale-gas pipeline that would cut beneath

the Appalachian Trail, America’s longest

hiking path. Democratic presidential can-

didates including Bernie Sanders, the

front-runner, want to ban fracking.

In Canada the premier of oil-rich Alber-

ta argues that provinces should be freer to

develop oil projects within their borders. It

is not impossible to imagine a world in

which oil states battle a more restrictive

national government in America, too. 7

NEW YORK

Canadian and American oil industries

are becoming more alike

Oil in North America

Of tar sands and

shale beds