National Innovation Strategies in the Global Economy
Edited by Göran Marklund, Nicholas S. Vonortas and Charles W. Wessner
Chapter 4: The Multilateral Trading System and Transnational Competition in Advanced Technologies: The Limits of Existing Disciplines
Thomas R. Howell 4.1 INTRODUCTION1 Globalization is bringing unsettling change in the world economy. Dramatic advances in information technology and transportation and reductions in trade and investment barriers have enabled corporations to locate manufacturing and services functions in virtually any country possessing the right combination of factor advantages. A rapidly increasing range of production, design, logistics, research and development (R&D) and services can be outsourced to other countries, bringing cost savings, relief from regulatory burdens, access to local labour pools and many other advantages. Factories, corporations and entire industries are decamping from their countries of origin to relocate in other parts of the world. Individuals, particularly those possessing special skills and training or entrepreneurial ability, are leaving their countries of birth in pursuit of better opportunities. These developments have made available to the world’s consumers a vast array of new goods and services, often at progressively declining prices, but at the same time have been profoundly destabilizing. Companies and industries that do not adapt to the realities of globalization risk extinction and even highly skilled workers that are not mobile, in global terms, are ﬁnding that their jobs are not secure. National and local governments must grapple with the economic and political complications arising out of industrial ‘hollowing out’, the abrupt migration of industries and people to other parts of the world oﬀering greater advantages (Aspray et al., 2006). For centuries national governments have intervened in economic aﬀairs to shape market outcomes to enhance national advantage, and...
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