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Global Business Revolution

International Business Environments
China Focus
Political, Economic and Technology Focus
Dr. Thomas Lairson

Global Business Revolution

Summary

o The GBR defines much of the international environment for business
o Major structural changes in the global economy
o Knowledge as primary source of value and competitiveness
o Technologies of ICT and logistics alter relative prices and propel changes in global flows and in global business organization
o Lean and flexible manufacturing merge with innovation-driven firms to accelerate the speed of business
o Global production networks as major organizational innovation derive from the combination of Toyota and Silicon Valley
o GBR creates opportunities for poor nations to capture knowledge and enter global economy
o GPNs provide avenues for upgrading by poor nations to achieve sustainable growth

I. The environment of business everywhere is greatly affected by the GBR

• Dramatic and far-reaching changes in the organization, scale, scope, production processes, and products of business
• Transformation of macro business environments 1970-2008

o New structural characteristics: knowledge/technology; globalization; emerging economies; new organizational forms in business
o Global dynamics affecting shifting comparative advantage

II. Major structural changes

A. Knowledge/technology have become the most important source of value in products, production, supply chains, and business organization

o “Over the entire past three centuries, the main source of wealth in market economies has shifted from natural assets (notably land and relatively unskilled labor) to tangible created assets (notably buildings, machinery and equipment, and finance) to intangible created assets (notably knowledge and information).” John Dunning
o One estimate is that in the 1950s, 80% of U.S. value added in manufacturing...