Essay on the Next Global Stage
[pic] SEMINAR CULTURAL DEVELOPMENT Essay on ?The Next Global Stage ? By Kenichi Ohmae 2005, Pearson Education, Inc, publishing as Wharton School Publishing, New Jersey. ATLANTIC INTERNATIONAL UNIVERSITY HONOLULU, HAWAI July 2007 Introduction In his book, The Next Global Stage, Challenges and Opportunities in our Borderless World, the author Kenichi Ohmae, one of the world’s leading business and corporate strategists, makes the key point that Globalization is a fact, here to stay and unstoppable.
In addition, we are moving to the next global stage, led by the world elite of “internet-ians”, a kind of global tribe, and our leaders in a borderless world.
Ohmae does not question at any moment the sustainability of the global world growth model, nor the principles that rule globalization, nor the human rights of different countries, nor any other values. He accepts that profit and the prosperity and even wealth are part of the capitalist global world .
Those countries, regions more so in his terminology, corporations or individuals that do not have the flexibility to adapt to the new reality will be wiped out by the economic and social forces emerging and leading globalization. The author explains in detail, the key drivers of the globalization, such as the “no theory” of the economy dynamics, the leverage of the fundamental platforms for success and growth, the English language of Microsoft PC operating systems, or the prevalence of global brands.
He points out the new face technology is giving the world and examples of governments which put economic prosperity at the forefront of their agendas, independent of the political system, i. e. China, other non democratic countries and countries with a political system based on individual freedom. Ohmae focuses on the technical capacities and skills that the leaders of the new global world must have in order to succeed in it.
It is a very interesting book that offers a vision of economic growth where the main objective is to attract the money in the form of investment, local or foreign, to those areas that make the shortlist of most interesting places to invest and create wealth. Ohmae describes the skills needed to prosper in it and the characteristics of efficiency and competitiveness that attract investors. His viewpoint is that of the capital, without considering the freedom or human rights issues in human social and economic growth. In this sense the book is controversial.
It does not question Globalization and explains with very good arguments the roadmap to success in it. The preeminence of the capital over any other production factor or human development is assumed. Ohmae is one of the most famous strategists, business persons, and academics in business and management theories and practices. He admits that traditional economic theories do not work anymore and that the case study approach, based on learning from the past and traditionally followed in western universities lacks relevance to the future and is obsolete to analyze and learn about the new realities.
He is a believer in innovation and leadership as a means to improve the skills of future business leaders (and political ones, independently of their ideology, paradoxically enough). I am going to analyze, develop and comment on the main ideas contained in this important book, recommendable to all those dealing in the development of economic, business and management theories and practices. Whether one is a practitioner or an academic, I think that many of the ideas are very relevant to our global world. If you want to succeed in it, this book contains many recipes for success.
The question that I will be trying to answer throughout this paper is whether you can skip the question of the model of economic growth in a sustainable way for the planet. And therefore for humanity . I will add my ideas to the analysis in the conclusions. I will start my analysis of the book by discussing the key ideas. Part 1: The Stage The world as a stage World wide music tours are a symbol of globalization . The author uses “Riverdance”, the Irish musical with its Celtic music and Irish dancing, as a metaphor for the global economy.
It is originated and performed by participants of different nationalities and is enjoyed in many countries or ‘stages’. It is an encapsulated example of players in the global stage. The global economy is invisible, but its effects are evident throughout the world. We are players on the global stage and we all feel its effects, no matter where they take place. Ohmae says that China is the country that is benefiting the most from global economy, especially those regions like Dalian, that have an approach of being attractive with incentives to attract direct foreign Investment or DFI .
China cannot be seen as a unity but as a group of regions with different approaches and levels of political and economic independence. In reality, those regions are competing with one another for investment and resources, not from China, but from the outside world. Ohmae explains the examples of two countries that have embraced globalization, such as Ireland and Finland. The first by attracting DFI and the second one by embracing the internationalization as the natural situation, plus the innovation and knowledge based economies that both countries promote.
They have taken the whole world as their natural market, and they have not been economically nationalistic. What is the Global Economy? x Borderless Tariffs are disappearing, but borders still exit for people and goods for the sake of security and safety. But in terms of the key factors of business life, the world has become borderless. These business factors are designated as the four C’s : communications, capital, corporations and consumers. -Effective communications, with the development of internet in the mid-1990s onwards the world is getting truly borderless. The second C, capital, aided by the deregulation of financial markets, is also a beneficiary of a borderless world with the US dollar the monetary platform of the globalization so far. -The third C, corporations, have been successfully responding to the globalization by locating their functions in different countries, that is to say, for example, R&D in Switzerland, Engineering in India, Financing in London, etc. -And the last C, consumers, enabled by the internet to compare prices and products and making much more informed choices.
And also the products are made in different countries, e. x. its fabric in one country, its assembling process in another and its design in a third one. . Invisible Transactions and settlements of money now take place mostly on and through computers. Plus the B2B trade exchanges, or as C2C auctions. Most ATMs around the world give money in the local currency with foreign credit cards. There is no way that governments can know what you have withdrawn and spent abroad or how much you have spent with a credit card to purchase goods and services across national borders. Cyber connected The global economy would not be possible without the cyber technology allowing large amounts of data to be transferred incredibly quickly. The internet is only the most public part of it. Voice over IP (Internet Protocol) is rapidly facilitating and making cheaper the communications. Everything and everybody with access to the internet can connect. . Measured in multiples “Money makes the world go round”. Money is the main and almost single value in the global economy.
Shareholders demand to take advantage of business opportunities with expectations of profit. Ohmae states that the current globalization process is in its infancy and more changes, many of them permanent, will go on to benefit the world. Globalization is an opportunity to create more wealth and prosperity, as long as one has the recipes or skills necessary to succeed in it. His view contrasts starkly with the negative opinions of these same features expressed by other ecology-oriented authors and economists.
In my opinion, we have to be positive and within the global stage and develop the skills that represent an evolution ofhumanity towards a better stage,provided that using those characteristics to create economic incentives are based on the maintenance and regeneration of the sustainability of the planet. In other words, I think that adding new “values in the market” economy can direct or redirect development towards those sustainability values, such as protection of human rights, freedom, democracy and protection of the environment.
In my judgement, that is where some of the defenders of a collectivist approach to development are wrong. The human individual thrives in a free global stage that protects and promotes the right values with a regulatory framework based upon freedom and democracy, so the planet can increase its wealth and reach all the corners of it. Opening Night: Globalization started with the most important Earth-changing event . The opening night of capitalism spins around the information and telecoms revolution, with Bill Gates as the epitome of this new era.
The fall of Soviet communism was due to the opening of Russia (The Soviet Union) thanks to Gorbachev and his reforms with the “glasnost” (transparency). This was another key change towards a borderless globalized world. The dollar as the world currency after the agreement of the G5 in New York, and the flexibilization of currency exchange rate. The Fiscal revolution to combat Budget deficit in the 80’s in the USA was another key factor for the fiscal revolution in public finance management.
Both helped the globalization process at the beginning of the 90’s. The Microsoft eruption and accessible information technology and software have become a commonplace communication tool in today’s world and is the key technological factor for the new global stage. The coming of China into the world economy, with their reforms accepting efficiency and prosperity and private property with the famous, ”one country, two systems”, claimed by the Communist Party leader Deng Xiaoping, and the continued by Zhu Ronji, was not short of a revolution.
China now exhibits capitalism in its rawest form. And finally, the internet at the beginning of the 90’s and the development of the world wide web with its common hypertext language allow millions to communicate and has changed profoundly our way of living and working. These are facts and Ohmae is right when he says that they are here to stay and that the global stage is spreading more and more, not confined to an elite, but affecting an ever growing part of the world population.
Turning our backs to them would not be rational, these situations give more freedom to people, companies and politicians all over the world and should not limit Freedom, which is the most important human value, but enable societies to protect the weak and provide equal opportunities for people to make their own choices. Each of us knows better how to make decision for ourselves. Certainly better than governments. The idea is that Politicians set up frameworks, where fair values, not only profit rule, and allow the arket, with its limitations watched upon to bring prosperity and redistribute wealth with human criteria for the general benefit of all individuals. I do not believe in limitations on freedom, be it political, social or economic freedom. Countries with no democracy cannot claim that everything goes at the expense of prosperity. In other words, the Singapore model vs the Chinese model or the western model. For me prosperity does not justify political or human right limitations. The end of Economics The Global economy is not a theory, it is a reality.
Not even economists understand how it works. The old masters theories and the well known parameters do not work anymore. Economic theories are used to explain causalities, especially within a country . The problem is that national economies do not exist anymore. There is no model to explain the global economy as such, because we are dealing with many parameters and variables, and so many units of economy, so many new financial products, bonds, hedge funds, and so many derivatives and multiples, that make it almost impossible to establish a mathematical economic model.
The theory of complexity is more suitable to approach this new 21st century economy, fundamentally different from the 20th century one. Part of the paradox that surrounds economic theory is that it is often divorced from the world in which it has been developed. The Author cites several classic economic theories from old masters such as Adam Smith, David Ricardo, or Keynes that explain the reality around them. However, the global economy of today needs new thinking to tackle its realities.
The technological revolution has transformed geopolitics, including turning obsolete the nation-states. Economic environments are constantly changing and are difficult to encapsulate. The liquidity of money, says the author, is another feature of the global economy. There is a constant flow, no absorption anywhere; absorption would cause inflation. Traditional economic theory cannotexplain this either. Technology and deregulation have liberated money from national economies. Money flows to areas of highest return, no matter where that is.
Money has not patriotism. There is an over liquidity. Deflation’s antidote was inflation according to the theories of some famous economists (Paul Krugman) but the Japanese example contradicts the theory. Consumers know better than economists what is good for them and what to do with their money. Another aspect of monetary policy that the advent of the global economy has altered is the position of interest rates. More and more individuals save, for instance in a “portfolio’ of assets in the global world in the world stocks exchanges and the different currencies.
The theory of complexity was developed because the traditional linear theories could explain less and less the complexity of the world, the relationships, the behaviors, the expectations of individuals, corporations and governments. There more and more thinkers, academics and business people who, like Kenichi Ohmae, see a parallel between the global economy and the world of complexity. Predictability, or more so the lack of it, is one. A small change in one variable can have a huge and inexplicable impact elsewhere. Traditional theories tended to think that equilibrium was the natural state of economic systems.
Nobody is completely sure of how the very recently developed global economy works. The old economic paradigms that supported the classical theories have been broken, but despite that many countries, or governments find difficult changing habits, the old interventionism, or “touching a key” to obtain a result is still in place, but with sometimes opposite results to those expected. Those who do not understand the new economic paradigms are liable to become the victim of someone else who does. In the developed world the economic policy should focus on asset appreciation, which has much bigger impact than increasing the flow of income.
China, the author says, in one of them. So, in summary, some the characteristics of the new economic paradigm of the global world according to the author, are: . For the first time in human history, prosperity and riches do not depend on existing wealth. In the global economy, there is no need for mineral resources or colonies, or any other “traditional” resources. A country or a region can attract foreign investment to create prosperity . The world has an excess of capital. There is plenty of money always looking for places to invest. A regions has to show worthy of consideration.
Regions know that they are in a buyer’s market and that they have to compete for investment. Investment means prosperity. . Size no longer matters. The need of an internal substantial market is not necessary anymore. International success is accessible to countries with small populations, i. e. Nokia in Finland, Ireland, etc. I agree fully with the book’s ideas about the end of the old economic theories. The complexity of the borderless world, where individuals, corporations and governments try to maximize their return on investment is the reality of today.
The global economy still has to produce its theorist, with the permanent state of flux and metamorphosis as a defining characteristic. We see how the global economy emerges in front of us, but it is difficult to grasp. Those who understand it and use new thinking, succeed. Innovation and productivity for competitiveness are the real drivers. Part 2: Stage Directions. Playmakers For the author, the geographical and economic unit of the global economy is the region. Not so much the nation-state which, despite its political importance, cannot be viewed as an economic unit within the global economy.
That is why political economy studied in classic economic theory is obsolete. The nation-state had its own currency and its natural territory and economic boundaries. With the global borderless economy, that notion is overcome. This idea is relatively new and revolutionary, and not ‘politically correct’ for some as it suggests governments should have a subsidiary role in the regulations of economic transactions. There is a group of economists and thinkers closer to the political “left” that oppose to this notion.
In their opinion there should be more regulations to protect the nation-state citizens from the global economy, capitalists and multinationals. Indeed they argue there should be less international trade and more national barriers and clearly defined borders to protect the life style of the citizens within and that the market and the capital not only have profit as the only value, but others such as the environment and sustainable growth, influencing the market forces to adapt to a more “human” global, but local economies.
This is a central confrontation in terms of vision of the global world and the political consequences. It will be a central debate for the sustainability of the world and its social, political and economic consequences. In his explanation of the rise of the regions, versus the nation-state, the author mentions several examples, like Singapore, Ireland, the Tokio region, Dalian and Guangzhou in China. Some of these regions are component parts of old nation-states; others spill over existing borders.
Ohmae says that globalization is a liberalization of individuals, consumers, corporations and regions from the legacy of the nation-state in which they belong. Eventually the information available to each of them will give them the wisdom of choice, r. e. Part 1: The Stage Whether a consumer buys the best and cheapest from anywhere in the world is also their choice and not the decision of the government. Likewise corporations will shift eventually to the best host regions. Ultimately is a competitive world and one that will discipline all members of the global village, because wealth will migrate national borders. Platforms for Progress
These are the developments that have promoted human progress; what the author calls the platforms for progress; that is to say means of allowing companies or individuals to communicate with each other to get things done more quickly and efficiently by enhancing communication and delivery, and creating the common standards accepted by the players. Technology platforms: These include operating systems, (Microsoft), personal and corporate computers, the HTML programming platform for writing web pages (Java), the internet, the World Wide Web and its applications like online transactions, shopping in the cyberspace, etc.
The Voice over Internet Protocol (IP) and the versatility and affordability of telecommunications. Language: The English language is the linguistic platform of the global world. Many critics see it as symptomatic of US dominance and cultural imperialism. Attempts to impose other languages, like Russian in the old Soviet block of communist countries have failed totally. English language is spreading all over Asia where it is synonymous of business success. Being bilingual in your own mother tongue and English will become the norm, not a special skill.
The US Dollar: The reason is historical and practical and dates from the end of WWII (mid 40’s). Many countries trade in the US dollar, e. x. North and South America, Australia, oil producing nations and Asian countries such as China and Japan. This puts the US in a privileged position, although, the recent trend in the importance of other currencies is balancing the situation versus the dollar and creating a group of global currencies, such as the Euro, the Yen and the Chinese Renminbi. Other Platforms: These include ‘Branding’ in the global economy.
The majority are American, but more brands from other regions of the world are becoming global. Global business culture; the global jargon of business is understood across borders. The ATM platform; this allows cash to be dispensed from locations far away from your locality. The credit card and smart cards platform. GPs platform, and other platforms are becoming available to a large number of users in a global world and those doing business need to understand this. Out and About Another issue shaping the global stage is the business process outsourcing (BPO).
This means business optimization and refers to the relocation of sources and resources. Again it is the the Telecommunications revolution which drives BPO. An immediate benefit has been the reduction in costs. However, BPO is one of the most controversial aspects of global economy, seen by some as a capitalist exploitation of the poor, a new way of making money at the expense of poor countries, creating new global economy “slaves”. India (also Ireland) has benefited the most from BPO (again the English platform).
The author defends this new form of globalization arguing that it facilitates the distribution and spread of wealth in a more effectively and efficiently than development aid. The money goes directly to individuals rather than potentially corrupt government agencies. The increased prosperity in India and Ireland is undeniable (other examples include China and the Philippines). Ohmae defends BPD as a source of wealth for poorer countries and criticizes those myths and half truths about the “sweat workshop” cliches, claiming these stem from western fear and insecurity about the loss of white collar jobs.
The view from those countries is radically opposite. Cross-border BPO, is yet another example of the borderless world. Many clerical jobs have been replaced by computers and companies outsource more and more functions in search of cost reductions and competitiveness. It is natural that some of the better and cheaper operators should be found across national borders. Some politicians and intellectuals have a different point of view. In my opinion, BPO, like everything else in life has a right and wrong approach to it. If the conditions for fairness and other values other than just profit are introduced, the advantages outweigh the isadvantages. A global effort is needed by international political institutions to guarantee that exploitation by multinationals is not allowed. I believe in market forces over governmental control. In other words, if market rules penalize companies that do not comply with international norms of fair work then they will have the incentive to change. More so than a compliance with national regulations open, in some cases, to corruption, lack of transparency and consequently disregard for human rights. Breaking the chains The internet and the portal are becoming more and more important in the global stage.
The search engine is the best “travel” guide and helpmate for internet users as they move through billions of pages in the cyber jungle. This is creating the emergence of “cyberites” or “netians”. This group of internet users has a tendency to follow behavior patters that Ohmae classifies in theorems. . Theorem 1; internet users for five years or more tend to think, act and behave similarly. They want to buy the best and cheapest from anywhere in the world. They are confident that they can live well under the liberated regime of a truly global environment. Theorem 2; (Age-10/10) is the number of years to become a real cyberite according to the non-scientific observation of the author. It takes longer to unlearn accumulated 20th century assumptions and myths depending on your exposure. The younger generations have less difficulty in learning the rules and games of the cyberworld. . Theorem 3; Cyberite as proactive consumers. People are passive when watching TV. They want to be entertained. By typing the names in a search engine cyberites are more likely to discover or buy something.
The payment systems are a fundamental part for the development of internet. In fact, security is one of the issues that prevent people from buying and trading in the World Wide Web. Improvement of the security will increase the number of cyber transactions. More companies are introducing security and convenience to internet payment systems. The final part of the net revolution is logistics, or the physical distributions of goods. The new technologies have created many new business models, from the case of Dell, to Amazon, Zara and others.
Parcel delivery companies have grasped the opportunity to become global logistics business partners with the outsourcing of that important function in the global world to many companies. Time and distance are barriers. This ‘barrierless’ global world is a psychological shift that shapes our understanding the global economy and its benefits. We consume items from any cornerofplanet,becausetheyareavailabletousasglobalconsumers. Part 3: The Script Reinventing Government Governments are losing their power in this global world. Some do better than others, and decentralization is happening within their countries.
Nevertheless, strong central control is something of the past, Ohmae argues. Today’s intellectual battle is between the old and the new. Governments are wealth distributors, not wealth facilitators. They create wealth only through taxation. That is the way many people experience governmental intervention. The best taxation is the simple one explained in the book and also the fact that money raised from taxation should be invested in the places it is raised. As distributors of wealth, governments have gone the way of developing welfare states and welfare economies.
They protect national industries, even if they are inefficient and weak globally, at the expense of the taxpayer. The distributive state is when distributed wealth is spread evenly and fairly throughout the country. Governments of the future must seek to facilitate rather than frustrate. The public service of any country must be prepared to work more on short term projects with identifiable goals as is the practice in the majority of European countries, rather than enter into a permanent employment regime. A pragmatic approach is necessary. A Vision for Change
Governments need to have a vision for the future, not only one developed by politicians, but by all social agents, which identifies national strategy and policies in an open and transparent way and reach all layers of society. It must not be just a mere collection or words and aspirations, but identify clear, practical and obtainable goals. Democracy should be used to reach majority consensus. Naturally coming with this vision is not easy. First because of the political fractions in a country, then because we now live in a borderless world and can no longer put national interests first.
And finally because we live in a cyberspace and are bound to the TIC (Telecommunications and Information technologies) . Mapping the future These are the fundamentals to develop a viable vision for a country: . It must empower individuals .It must invite capital from the rest of the world .It must maintain an even keel Government vision. These are things Governments can do: . Be ambassadors for new technology .Diminish the hindrances for capital flow .Eliminate obstacles for companies to attract the best people, skilled workers or managers .
Minimize bureaucracy .Specialize the country around a competitive advantage A truly visionary government is dedicated to education. A highly educated work force is necessary to add intellectual value to the country or region. Workers in all areas should be educated in being versatile and open-minded. Possession of disciplined thought processes and the ability to approach problem-solving are always the areas one can build upon and apply in many different areas. To this end, further education or skill acquisition should be made easy.
The internet and broadband technology make attending and participating in learning from remote locations possible. A new Role for the Government Governments have been involved in providing education, but their role should change to being a member of a team and open up to the private sector involvement. Education and the school system represent one of the best ways in which governments can teach the citizens of the future about changing roles. But world reality is not very encouraging. Many governments, on the contrary, want to set up barriers to protect their national economies.
There are examples of countries and/or regions with different characteristics, that are successful in the government involvement and the understanding of the global economy. Some regions of China, Scandinavian countries, Ireland or Singapore are among them. In each there is tradition of interventionist government action, especially in the economic sphere. In different ways they have given more, by doing less, often providing only the initial impulse and vision and the right background conditions, but thereafter sitting on the sidelines. The Futures Market
Governments must change, but the global stage, change is both necessary and inevitable at three fundamental levels: . Technological- Technological progress has the capacity to reshape countries . Personal- Individuals must become more proactive and more adaptable . Organizational- The emergent corporation will be homeless. It will be adaptive, focused on innovation and unencumbered by needless hierarchy or the psychological baggage of the past The technological Future Technological progress means that industrial death is increasingly a fact of business life.
The rise and fall of commercial enterprises is part of the landscape. Each technological wave usually has its victims, those who were unable to change in time. Time has been compressed. The history of the digital camera is just an example of this. Big companies like Kodak and Fuji are facing restructuring. Or the music and cinema industries with the emergence of the internet and the digital technologies. Something similar can be said about telephony, with the rise of VoIP (Voice over Internet Protocol) and its impact on Telecoms. The personal future
No matter where they are, individuals will have to learn to adapt. A job career for life is a concept to be discarded. Another change will be the accepted norm that life always gets better and that workers, no matter their education level, can look forward to an incrementally improving lifestyle, leading to a post-retirement soft-landing, in which almost all their needs are provided for. People will have to learn to be lifestyle mangers. Flexibility will be central to success. Success in the global economy will also depend on good leadership. This is true with regard to a region-state, or a company.
Good leaders need vision but must remain pragmatists. Leaders must value information and innovation. One of the most important assets that a leader can possess is a flexible attitude to his/her role. He/She must be intuitive and able to change. The Corporate Future Uncertainty is another feature of the global economy. Paradoxically this provides opportunities for those brave and adept enough to adapt. The global economy is new. The rulebook remains unwritten. Nobody knows what will work. The best way forward is to try anyway and to learn from your mistakes, then try again.
The author dismisses the case study method followed by universities, arguing business needs to be done in new ways. Notions from the past cannot be applied to the future. Companies need to commit to the global economy wholeheartedly, unless they want to be absorbed by others. Companies will be homeless. The traditional link to a nation-state will disappear, the relationships will be different, because their business will be widespread. The notion of headquarters is giving way to the reality that the market is open 24/365, the market never sleeps.
The natural state of the homo economicus is movement. Innovation is another feature of global economy. And whatever innovation system a company may establish, the innovation of new, better, more efficient, cheaper, more convenient products and services will be permanent; Business systems, products and services, customer relationships and internal staff relationships, will become four key areas for innovations. Companies also need to learn to adapt their identities and shift their business models to adapt to market changes. More and more corporations will have to be like living creatures.
The traditional military-like organization that companies have today, based on hierarchy will also have to be adapted. The old pyramid will not survive. The control focus organization will evolve to other forms of flexible, innovation-focused organizations. The next Stage The Region as the unit of the global economy will continue to rise. There are many examples, from Vancouver, to Sao Paulo, Estonia, Ho Chi Ming City or the Baltic Corner, that have been the chance to put together some of the right features to succeed in the global economy. The formula for success is not too complicated.
What is complex is the need to unlearn the legacies of the nation-state and acquire new skills to work with global businesses. These regions now compete to attract investors to create wealth, and to this end are marketing themselves as brands to make potential target group investors aware oftheir competitive advantages. Conclusions Ohmae’s definition of the Globalization is described as one global stage where players act in an ever changing plot, brought about by the information technology and telecoms revolution which defies physical and political barriers.
A network of powerful machines create, analyze and synthesize information in milliseconds. The information within them is easily and instantly available. The traditional nation-state is an obstacle in many instances to the functioning of this global network. All regions, not nations, of the world, fight and compete with each other to attract money and investment to create wealth in their territory. Traditional economic thinking is obsolete to explain such globalization. Knowledge and education are more important thantangible natural resources, locations or previous sources of wealth.
Governments, businesses and individuals can only prosper through flexibility and pragmatism. The world is going through a globalization process , that is both inevitable as part of the natural human evolution and unstoppable ,because of the incentives that produces . The Global economy is a reality not a theory. Globalization is in reality unknown even for those who succeed in it. The features of the global economy are : borderless, invisible, cyber connected, and measured in multiples ,where profit or money is the single most important value.
The complexity of the global economy is such that no existing theories can explain it There are many variables that change constantly and create unexpected effects, and the theories and mathematic model that explain complexity can’t be proved empirically. Ohmae does not defend the suppression of the state, but with what I consider good judgment, thinks governments should not try to do things for business, but should allow business to do things for itself.
However, he does not emphasize the fact that governments should create the political framework that guarantee the human rights, freedom, and education for people to be able to be competitive in a fair world with a consensus on the big questions of life, including democracy, sustainable growth and basic moral and/or human values in the performance of the companies. It would be as though the free Market can increase the value of those companies that comply with those “general framework conditions”, and not only profit determines the value and/or performance of corporations.
This may sound like “wishful thinking”, but I believe the market can better guarantee the sustainability, efficiency, freedom and prosperity of humanity than government. The difficulty, of course, is how to reach that “general political framework”. World leaders need to search for it and, in my opinion, this will be the single most important issue for world sustainability and prosperity. It has to be the next big revolution. The Humane Political Revolution.