MBA 수업내용 ) 경제 지리학 - The New Economic Geography – What does it imply?
Economic Geography
아래의 지도를 보시면 쉽게 이해가 가시리라 생각됩니다.
학교측으로부터 제시되었던 논문은 "The world is spiky(세계는 가파르다)" 그리고 "The world is flat(세계는 평평하다)" 의 두가지 였습니다. 언제나 그래왔듯 이번에도 상당히 상반되는 내용의 논문을 제시하고 학생들간에 싸움을 붙인 것이었는데요 ㅎㅎ
이 논문들의 내용이 상당히 흥미로웠습니다. 첫번째 논문인 "The world is spiky"의 경우, 경제지표가 아래 지도에서 보시듯이 미국, 유럽과 일본,한국등의 몇개 국가에 집중되어 있으며 몇몇 도시에 엄청난 자본이 몰려있다. 따라서 경제지표는 불공평하게 진행되고 있다. 라는 내용을 주장하고 있었구요.
두번째 논문인 "The world is flat"의 경우에는, 세계가 불공평한것은 맞지만 갈수록 중국이나 인도등의 미개발국가의 경제가 성장함에 따라서 선진국과의 격차가 줄어들고 있다. 따라서 지도상으로 볼때 세계는 갈수록 평평해지고 있다. 라는 내용을 주장하고 있었습니다.
여러분은 어떻게 생각하시나요?
세계는 spiky 인가요?
첨부파일이 있습니다.
CBP.ppt
Seminar 1.doc
Theme: The New Economic Geography – What does it imply?
What is the message?
The world is becoming more and more global but there is still a national diversity caused by culture, religion and history. The difference between the well-developed countries and developing countries yet is significant. In general the globalization influenced the progress of these countries due to investment and outsourcing which makes it possible to improve the economy and their social systems. However a main indicator is the population.
What has changed?
In most of the European countries the demographic change is a main issue. Changing demographics is associated with an higher life expectancy, an aging population, retirement of the baby boomers, more immigrants, changes in the ethnic make-up, and generational diversity. At this point the government should take Sweden as an example and support and encourage younger especially the younger generation to stop and turn around this change.
The economy of Russia is growing nowadays. Nevertheless, it is derived mainly from high world prices for natural resources which Russia can export. If Russia is willing to have stable growth in a long run, it is necessary for it to focus on development of non-mining industry and services, to invest more money in innovative production and infrastructure improvement.
Some improvements in social sphere are also essential. Although some national projects in such spheres as health and education were started in recent years.
Pakistan benefits from the globalization as it gives a lot of investment opportunities. But still there are remaining problems, especially in the education and health system.
China is fighting with their population and thus their consumption as well as their health system. It should be to point out that the population and health system are strongly correlated. It is definitely a challenge to offer a good health supply for millions of people, especially across the country side.
What needs to be done and who can do something?
According to the figures and data provided, there are improvements in the economics, health systems and education worldwide. However, there are still remaining national differences and gaps related to culture, history, religion as well as population.
But the globalization also has his drawbacks e.g. the exploitation of developing countries as well as the increasing consumption of natural resources.
One solution could be that the governments are cooperating more closely. In addition the high income countries and so called “rich countries” should find a way to support the developing countries. Not only just financially but also in education and health care. Another important point is to find a balance for the population growth.
Article 1: Beyond offshoring: Assess your company’s global potential (by Diana Farell)
Q1: What factors should a company consider while making their decision to use offshoring?
A company should consider three groups of factors. These are related with production, regulatory and organizational issues. According to Farrell the company the two main questions towards production are:
a. How sensible is the company’s business to relocate its manufacturing process?
- Is the company able to control the quality of the products manufactured abroad?
- Is the company able to deliver goods manufactured remotely to its target markets before they become outdated?
- Would the company have some sunk costs in case of relocation?
b. What are the benefits the company can gain after relocation some steps of its manufacturing process?
- Availability of labor of necessary qualification
- Availability of natural resources at a low price
According to the regulatory issue the company should assess the friendliness of the policy of the host country:
- Are there some restrictions for import and export of specific products (some additional taxes, quotas, etc.)?
- Are there some restrictions for foreign investments?
- What is the situation with legal infrastructure in the host country?
According to the organizational issue the company should questioning themselves if it will be easy to organize a new management structure and to refine internal business processes?
Article 2: The globalization of markets (by Theodore Levitt)
Q2: What is the difference between multinational and global corporations?
Multinational companies are organizations which run their business in several countries and localize their products to each region in order to meet specific preferences of customers. As the localization of goods requires additional costs, the prices for the products of the multinational companies are pretty high. Global companies also operate in different countries but they offer the same products everywhere that allows them to avoid extra costs connected with adjustment to individual tastes of people in various places and to sell world-standardize goods of high quality at a low price
Article 3: Redefining the global triad (by Chong J., Peter T. Golder and Soo Hee Lee)
Q3: What are the traditional and modern global triad blocks and why were they defined?
Ohmae Genichi (1985, 1989) divided the world into a few blocks by trading amounts which are USA, Europe, Japan and developing. According to his division and the article "Redefining the global triad(1996)", Global company should develop their product as world standard and sell them to the market with the order by United States on the first and Europe on the second and Japan on the third and rest of the world on the last. This is because American market was considered as the biggest and most sensitive on that time. In this case, it can be beneficial for United States, since American standard can be the world standard. Many of developing countries were used to investigate trends of developed countries like as United States, Europe and Japan. However, many emerging countries occurred since 1990s and as their markets growing, Economic power of traditional blocks became lessen. Hence, Chong Ju Choi, Peter T. Golder and Soo Hee Lee redefined the main concept of global triad as occasion demands. They reorganized the world based on culture and business system and divided into Anglo-Saxon capitalism, Non-Anglo-Saxon /Communitarian capitalism, emerging capitalism, developing. This reorganized triad reflects diversified market and culture.
Article 4: The world is spiky (by Richard Florida)
Q4: What are features of a spiky world?
General speaking, through of the development of the economy, more and more resources are flowing to some mega centres, for example: EU, Japan and America. That is the reason why the world is so spiky nowadays. The spiky world presents the following features:
Most of the population is concentrated in urban area, due to the fact that more and more people moved from the country side to the cities. While only three percent of the population lived in urban areas in 1800, nowadays there was and is still a dramatically increase of the number of people who live in urban area.
The worlds’ economy strength is tending to be hold by a very small group of countries, such as Japan, the EU and America. However there are more and more emerging countries.
Finally most of the world’s innovations are generated in North America and EU. The same situation occurs regarding to the most successfully scientists who are also coming from the US and EU. Meanwhile, more and more talents are attracted by the countries which are in the peak of the world and would like to immigrate to these countries.
Article 5: Myth of the triad? (by Poon J. / Thompson E. / Kelly P.)
Q5: Why does the triad can be seen as a myth?
Most of the trade was in between US, Europe and Japan and made a triad. It was around the 80% of the world trade in 1965 and reduces to 69% in 1995. The trend to invest from these big economies to the developing countries started between 1985 and 1995.
The Europe becomes a block from a triad from single European act in 1986 and eventually advent a single European currency in 1999.In Us zone they signed the free trade agreement NAFTA , and then both the EU and NAFTA also expanded them to south American countries .Although the Japan was not in ASEAN (association of south east Asian nations) normally called ASA , but JAPAN , expanded with China and Korea to APEC , ASEAN also signed AFTA (Asian Free Trade Agreement) to expand the trade volumes, and started openly discussing the common currency like Euro since 1999.
The article analyzes that and trade and investment is process of integration and differentiation. Integration as countries are getting together with trade and investments(more global) and differentiation as due to the regional and geographical positions the countries are more tied to their regions in trade and investment, such an imperfect integration tied the world to the triad, so it’s still a myth.
Article: Geographers and “globalization”: (yet) another missed boat? (by Dicken P.)
Q6: Why to geographers feel left behind?
Geographers declare themselves “to be the quintessential world discipline” in analyzing globalization issues. However many authors and governments do not consider their work in publication and discussion thus the feel ignored.
Interlink question 1:
Is the world becoming spikier or more flat due to globalization?
According to Thomas Friedmans a New York Times columnist, the world becomes flat due to the modern technology.
But the article “The World Is Spiky” argues against the concept that the world is flat rather it discuses that the world is spiky, and getting spikier as the globalization is occurred. The spikes of population in urban areas with high opportunities and business growth, spikes of light emission that shows the consumption and business and industrial activities, spikes of patents and the spikes of citations. So these spikes are increasing due to the globalization, managing the valleys with the spiky and hill areas around them are a big political challenge.
“The globalization of Markets “ is the article which discuses about the global corporations and multinational companies and specially standardization of the product with low price so it seems like that the world is going to be flat while global companies emphasize on the common required products, but in real the spikes increases, as global companies exploit their business. They are relying on the low cost countries to reduce production costs through standardized products.
The article “Myth of the Triad?” is mentioning that the main trade market of the world could be seen as a triad which turned nowadays in blocks, including agreement above trade and investment issues. This means that today the regions become indeed more global but still there is a high domestic business.
So these articles show that the world globalization is turning the globe even spikier instead of flat.
Interlink question 2:
Q2: What is the relationship between spikiness and the triad?
Florida Richard argued that the world is rather spikier than flat. Actually if we compare those data e.g. population, GDP, patents and light emission, we can find that these indicators are related with the global triad. Especially, the number of patents and scientific citation was high on Eastern America, Europe and Eastern Asia. This means Research and Development was active in these countries for long time. This also can be explained by traditional concept of triad. Ohmae (1985) divided the world into three groups which are USA, Europe, Japan.
Moreover, the fact that number of population is much higher in emerging countries like as BRICs and the number of light emission is medium in those countries can explain emerging countries are growing and the general concept of global triad should be changed into Anglo-Saxon countries, Communitarian countries and Emerging countries.
Interlink question 3:
Why should we serve the world market with the same standards?
The articles “Myth of the triad” and “Redefining the global triad”, describe a picture of a economic power and market which are emerging due to geographically trade cooperation and increasing foreign direct investment. This assumes that the framework of the economy triad should be redefined. In the meanwhile, the regionalization is becoming a remarkable trend within the world, for instance: NAFTA, APEC, ASEAN. Corporations between theses members are becoming more and more intensive. This is a proof that the world market is not evidently dipartite anymore but connects to each fragment of market closely. “The globalization of markets” embodies the reality of world market that the most effective world competitors sell products with superior quality globally as the same standard as their national market. Multinational companies who are concentrating on preferences of customers in different region were confused, and only global companies will achieve long-term success by taking account of every customer’s desire rather than differentiate customers’ demand. In fact, high quality and low cost are not incompatible when companies offering the same standard products or service all over the world, moreover, large-scale production of standardized items cost less than small-scale production within a wide range of volume. If a company can serve the world as a uniform market, it can serve the market economically. Otherwise it will spend more on serve the market on several segments.