April 14, 2011
Defining Globalization <ul><li>Economic globalization  is a “set of processes leading to the integration of economic activ...
Value Chain <ul><li>Concept invented by Michael Porter </li></ul><ul><li>A  value chain  is more comprehensive than a supp...
Other Ways of Thinking about Globalization <ul><li>Deterritorialization , e.g. of </li></ul><ul><ul><li>diasporic communit...
Appadurai’s Cultural Landscapes <ul><li>Ethnoscapes </li></ul><ul><li>Mediascapes </li></ul><ul><li>Technoscapes </li></ul...
Diasporic Communities <ul><li>any people or ethnic population forced or induced to leave their traditional  homelands , th...
Examples  of Globalized Culture <ul><li>Corporate logos </li></ul><ul><li>Who Wants to be a Millionaire </li></ul><ul><li>...
Will Territorial Based Systems Become Obsolete? <ul><li>No (short answer) </li></ul><ul><li>Territorial-based systems may ...
Coping Strategies: National Governments <ul><li>Many coping strategies are still possible. </li></ul><ul><li>Downsizing th...
Theoretical approaches: <ul><li>Neoclassical (industrial policy is bad and counterproductive) </li></ul><ul><li>Regulatory...
The Developmental State vs. the Regulatory State Developmental Regulatory Type of Bureaucracy Elite, Insulated Transparent...
Industrial Policies <ul><li>Includes a wide variety of policy instruments that are intended to advance the international c...
The Impact of Globalization on National Economic Strategies <ul><li>Greater volatility in global financial markets require...
Examples of Coping Strategies <ul><li>Promotion of inward FDI </li></ul><ul><li>Raising the skills of the workers via educ...
Example of GM in China <ul><li>2010 sales of 2.3 million vehicles in China </li></ul><ul><li>World-class production facili...
Example of LG LCD Production <ul><li>Joint venture with Philips </li></ul><ul><li>Only major competitors globally are Sams...
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Ipe20

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Y376 International Political Economy, Lecture #20,
April 14, 2011

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Ipe20

  1. 1. April 14, 2011
  2. 2. Defining Globalization <ul><li>Economic globalization is a “set of processes leading to the integration of economic activity in factor, intermediate, and final goods and services markets across geographical boundaries and the increased salience of cross-border value chains in international economic flows.” </li></ul>Source: Introduction to Aseem Prakash and Jeffrey Hart, eds., Globalization and Governance (Routledge:1999)
  3. 3. Value Chain <ul><li>Concept invented by Michael Porter </li></ul><ul><li>A value chain is more comprehensive than a supply chain because it extends backward to R&D and innovation and forward to commercialization </li></ul>Michael Porter Harvard Business School
  4. 4. Other Ways of Thinking about Globalization <ul><li>Deterritorialization , e.g. of </li></ul><ul><ul><li>diasporic communities </li></ul></ul><ul><ul><li>MNCs </li></ul></ul><ul><li>Cultural Convergence </li></ul><ul><ul><li>leading toward a universal “sameness” </li></ul></ul><ul><li>Mythology or Fad </li></ul>See, for example, Arjun Appadurai , Modernity at Large.
  5. 5. Appadurai’s Cultural Landscapes <ul><li>Ethnoscapes </li></ul><ul><li>Mediascapes </li></ul><ul><li>Technoscapes </li></ul><ul><li>Finanscapes </li></ul><ul><li>Ideoscapes </li></ul>“ The suffix scape also allows us to point to the fluid, irregular shapes of these landscapes, shapes which characterize international capital as deeply as they do international clothing styles.”
  6. 6. Diasporic Communities <ul><li>any people or ethnic population forced or induced to leave their traditional homelands , the dispersal of such people, and the ensuing developments in their culture </li></ul><ul><li>examples: Jews, Cubans, Chinese, Pakistanis, Indians , etc. </li></ul>
  7. 7. Examples of Globalized Culture <ul><li>Corporate logos </li></ul><ul><li>Who Wants to be a Millionaire </li></ul><ul><li>MTV </li></ul><ul><li>World Music , e.g. Reggae or Ska </li></ul><ul><li>Anime , Manga, Pokemon (J-pop) </li></ul><ul><li>Disneyland, Disneyworld theme parks </li></ul><ul><li>Action movies with little dialogue </li></ul>
  8. 8. Will Territorial Based Systems Become Obsolete? <ul><li>No (short answer) </li></ul><ul><li>Territorial-based systems may become less important relative to others but it is more likely that more complex relationships among governance systems at different levels of aggregation -- local, national, regional, etc. -- and nonterritorial governance systems will have to be established. </li></ul>
  9. 9. Coping Strategies: National Governments <ul><li>Many coping strategies are still possible. </li></ul><ul><li>Downsizing the state is not always desirable (e.g. the case of the formerly centrally planned economies). </li></ul><ul><li>National governments are likely to play a role in reducing inequalities accentuated by globalization. </li></ul>
  10. 10. Theoretical approaches: <ul><li>Neoclassical (industrial policy is bad and counterproductive) </li></ul><ul><li>Regulatory State (regulation necessary for markets to work properly, but industrial policy is still bad) </li></ul><ul><li>Developmental State (industrial policy is useful for catching up) </li></ul><ul><li>Competition State (industrial policy has to take globalization into account) </li></ul>
  11. 11. The Developmental State vs. the Regulatory State Developmental Regulatory Type of Bureaucracy Elite, Insulated Transparent, Accountable Support for New Industries Extensive Limited Use of State-Controlled Banks Extensive Limited Stance w/regard to Private Firms Tutellary Regulatory
  12. 12. Industrial Policies <ul><li>Includes a wide variety of policy instruments that are intended to advance the international competitiveness of “national champion” firms, such as: </li></ul><ul><ul><li>Investment subsidies </li></ul></ul><ul><ul><li>Public R&D expenditures </li></ul></ul><ul><ul><li>Science parks and free trade zones </li></ul></ul><ul><ul><li>Export incentives </li></ul></ul>
  13. 13. The Impact of Globalization on National Economic Strategies <ul><li>Greater volatility in global financial markets requires changes in financial market regulations in all countries </li></ul><ul><li>To remain internationally competitive, firms have adopted global production strategies </li></ul><ul><li>Even regulatory states have to compete for inflows of foreign direct investment </li></ul><ul><li>Developmental states cannot succeed with pure national champion strategies </li></ul>
  14. 14. Examples of Coping Strategies <ul><li>Promotion of inward FDI </li></ul><ul><li>Raising the skills of the workers via education and training programs </li></ul><ul><li>Scholarships and fellowships for college </li></ul><ul><li>Increased spending on research and development (R&D) </li></ul><ul><li>Regional development efforts </li></ul>
  15. 15. Example of GM in China <ul><li>2010 sales of 2.3 million vehicles in China </li></ul><ul><li>World-class production facilities (joint venture with SAIC) </li></ul><ul><li>Modified Buick as a chauffeur-driven luxury car </li></ul><ul><li>Not competing with low-end national champions like Geely </li></ul>
  16. 16. Example of LG LCD Production <ul><li>Joint venture with Philips </li></ul><ul><li>Only major competitors globally are Samsung and Sharp </li></ul><ul><li>Production facilities use best materials and tools from global suppliers (e.g. Corning and Canon) </li></ul><ul><li>Have to worry about China </li></ul>

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