New Aspects of Global Competition

1
New Aspects of Global Competition
Professor Ron Johnston Australian Centre for
Innovation Sydney, Australia Roundtable Key
Tendencies on Future Trends that Affect the
Competitiveness of Emerging Market Firms 7
September 2005
2
Stages of Globalisation

• European colonisation 1400-1815
• British hegemony 1815-1914
• US Government dominance- 1914-1950s
• Global corporations take over (US, European and
  Japanese Korea/Taiwan) 1960s-1990s
• New players China, India, Brazil and many
  others

3
Outward Foreign Direct Investment by Emerging
Countries

• 1 trillion OFDI from emerging markets in 2004
• 7-fold growth from 1990-2003 (2x ICs)
• Now over 14 share of global OFDI
• Foreign shares of assets, sales and employment
  in top 50 emerging TNCs same as worlds top 100
  TNCs

4
The Big Uncertainties over Globalisations
Progress

• Steady growth within existing rules, or radical
  transformation of global trading, with new rules
• Effects of global terrorism
• Effects of global warming
• Resource constraints
• Collapse of existing global financial systems
• New technological advantages
• Effect of big losers- Africa

5
The Challenges of the Global Knowledge Economy

• Increased competition, focused particularly on
  knowledge generation, knowledge interpretation
  and knowledge application
• The capability to learn, and apply learning, to
  economic and social outcomes, is the basis of
  national viability and quality of life

6
One Consequence

• Knowing how to do things in isolation is not the
  decisive type of knowledge any more. Knowing how
  to work cooperatively towards larger goals, and
  to effectively communicate, become much more
  important

7
Growth in Investment in Knowledge Generation

• OECD growing at at 5 per year
• New Asian Players
• China 25 of US
• Korea 8 of US
• Taiwan 3 of US
• Sum of Human knowledge doubled in past 8 years!
• Talent Wars

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Rules of the Global Knowledge Economy - I

• What determines economic performance is not so
  much knowledge creation as the knowledge
  distribution power of a country, company or
  culture

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Rules of the Global Knowledge Economy - II

• What counts is knowledge of how to develop new
  knowledge, how to locate and acquire knowledge
  generated elsewhere, how to recognise connections
  between different pieces of knowledge, how to
  embody knowledge in goods and services these
  are the challenge for the modern manager and
  policy-maker (OECD)

10
Rules of the Global Knowledge Economy - III

• Knowledge is being transformed from an
  intellectual pursuit to a commodity in the global
  capitalist system. This leads to inevitable
  pressures for increased efficiency, productivity,
  outcomes and ownership, of knowledge.

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Some Guidelines for Emerging Companies

• Innovation
• ICT enablers
• Skills and Training
• Organisational learning
• Clustering
• Internal teamwork/project orientation
• Government as purchaser, supporter, networker,
  informer
• Access to appropriate finance