The Power of Shifts in the Global Economy

Ten years ago, the IDEA awards program coordinated by Business Week and IDSA went from being a U. S. product design competition to a global competition. The annual spring issue of Business Week that describes these award-winning products is one of the best annual showcases of business innovation. When the program committee con­sidered whether the competition should remain an exclusively U. S. competition, they found they had no choice but to make it interna­tional, because there were no longer any exclusively U. S. businesses.

Samsung develops products around the world and has developed products in the United States for a U. S. market. It is no longer clear what makes a U. S. product American and a Korean product Korean. The Honda you might drive is manufactured in Marysville, Ohio. New Balance keeps 20 percent of its manufacturing/assembly in the United States, whereas Nike does not. So is New Balance more of a U. S. company than Nike? Is it better for a global athletic sports shoe company to be seen as centered in any one country? The help line for Dell computers is in India, but the corporate headquarters and assembly plant are in Texas, and some of its parts manufacturing is in Asia. Ford Motor Company now owns Volvo and Jaguar, and Daimler clearly owns Chrysler. The concept of the Big Three in the U. S. econ­omy is no longer a reality. It is no longer clear what nationality many of these companies are, and it may not really matter.

The interconnected world marketplace is fundamentally differ­ent from that which the United States inherited as a world power in 1945 after World War II, and the needs of consumers are becoming more defined and segmented. Many companies that thrived in the era of mass manufacture and in large predictable markets are strangely caught between outdated and emerging models of product development. Identifying the needs of emerging trends in global marketing and finding innovative offerings of products and services are fundamentally different from figuring out how to develop an assembly line to make an automobile that is cheap enough to afford, or developing a system for distributing electricity in a city. Few peo­ple talk about the system that supports cell phones. In the modern marketplace, everyone talks about the look and feel of the phone, its bonus features, and what the service is like. No one is amazed by cell phones; they just expect them to work and fit into their lifestyle. Countries such as India and China went from limited phone access to high saturation as a result of the minimal infrastructure and low cost to create cellular systems. These countries went from the pre­industrial age to the information age almost overnight.

As another example of the new world order, consider Finland. In recent years, Finland has been considered one of the most efficient countries in the world. Finland has the least corruption of any country in the world, it has an exceptionally high literacy rate, and it has a homogenous culture dedicated to being the best at whatever it does. The government has been investing in a program called “Finnovation” to build economic growth and global expansion. The Fins excel in sev­eral areas, such as cellular communication, cruise ships, freight lift equipment, logging products, and crafts and aesthetics in glassware and jewelry. The companies in Finland are joining with a collaborative effort of integrated research with universities of design, business, and technology to turn the country into Finland Inc.—a clear instance of knowledge companies helping to create a knowledge country built around integrated innovation.

Updated: October 12, 2015 — 9:10 pm