Modern World Economy - Alliances and Rivalries

Level: Undergraduate | Grade: 2:1 | Approx. Word Count: 1,410

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Overview

As noted in the research by P.J. Taylor (2002: 113), historically, the global economic environment was made up of a “…competitive world of rivalry between states, [where] each has had to look to its own ends and use any means available to satisfy them.”1 (P.J. Taylor, 2002). Following the demise of the cold war and the advent of the information era, however, this global economic landscape has changed dramatically. Indeed, it was in recognition of this change that the ex-Prime Minister of the UK, Tony Blair observed in his 2006 speech to the Australian government argued “you can't have a coherent view of national interest today without a coherent view of the international community” (Blair 2006, n.p).
However, one has to consider the merits of this argument in the context of the rivalries and alliances that still exist globally across national economies. The objective of this essay is to examine the impact that these phenomena have, using examples from four main economic and political activities for this purpose.

Advances in digital technology in the latter decades of the 1900s led to the globalisation of commercial activities and operations, which in essence related ton the international spread of corporate production processes (Castells 2001). It was corporations in developed countries that were first to take advantage of the cost benefits arising from technological developments. With improved communication provided by the internet and other technological advances, these corporations soon began to move their production operations to locations in emerging countries in order to gain the competitive advantage available from the reduced production and employment costs available in these locations. To consolidate this global production network, corporations therefore to develop alliances and joint ventures with domestic businesses in these countries.