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CONVERGENCE
Information technology and the New Globalization
P R O F E S S O R O F I N T E R N AT I O N A L E C O N O M I C S
THE GRADUATE INSTITUTE I GENEVA
50%
40% RoW
40%
China, 1900, 2014,
20% 19% 46% 46%
30% 1820,
China, 3%
Other 22%
I6 20%
0%
1820
1834
1848
1862
1876
1890
1904
1918
1932
1946
1960
1974
1988
2002
1970
1975
1980
1985
1990
1995
2000
2005
2010
Factory Economies
Factory Economies
Knowhow
Low Low wages
Labour
Thought experiment
In Factory Economies:
Middle class flourishes; Hundreds of million rise out of poverty.
Globalisation is cohesive.
How do we put
knowledge back
in the box?
BROADER PERSPECTIVE ON GLOBALISATION
UNBUNDLED
OLD GLOBALISATION
MICROCLUSTERED
OLD GLOBALISATION
INSIDERICHNATIONS
OLD GLOBALISATION
PREGLOBALISATION
OLD GLOBALISATION
MICROCLUSTERED
PRODUCTIONUNBUNDLED
NEW GLOBALISATION
INSIDERICHNATIONS
KNOWLEDGEOFFSHORING
NEW GLOBALISATION
PARTIALREBALANCING
NEW GLOBALISATION
Product Product
KEY CHANGES
Opened new
industrialisation pathway
for poor nations;
Can join instead of having to
build industrial supply chain.
G7 competitiveness now
required offshoring;
Importing necessary for
exporting.
KEY IMPLICATIONS
#2) Trade-services-capital-intellectual
property nexus emerges
Nexus required new
package of disciplines
(domestic & international).
Deep regional trade
agreements arose; WTO
side-lined; Mega-regionals
designed to knit together
deep bilaterals.
6000%
GVC revolution leaves
many developing nations 4000%
Vehicles,
Parts,
491%
behind; 2000%
315%
Vehicles,
162%
Face2Face constraint still
binding; 0%
Rapidly US, Germany, and
Most production networks industrialising Japan
nations
are regional not global. China, India, Indonesia, Ireland, Korea, Malaysia,
Poland, Singapore, Thailand, and Turkey
KEY IMPLICATIONS
Factory Economies
Knowhow
Low Low wages
Labour
3RD UNBUNDLING?
Robots vs telerobots
Pepper Beam
3RD UNBUNDLING?
Telerobotics today
3RD UNBUNDLING?
Skill range
END - Thanks for listening
How not to address
anti-globalisation
Trump Tariff Act of 2017
REOFFSHORING
Raising US trade barriers will not stop
offshoring of US knowhow
but will raise cost of industrial inputs
inside US
Trump Tariff Act of 2017
Manufacturing partly
rebundles in US for
domestic sales, but
abroad for non-US
sales; Exports replaced
partly by US foreign
affiliates sales
Will manufacturing jobs return?
Offshored jobs typically low-skill &
routine Jobs for robots, not workers
What way forward?
Step 1: Accept 21st century realities
Package it politically:
Trade policy in the service of society; When proposing more open
trade & international production share policies, also propose policies
that help economically disenfranchised.
END - Thanks for listening
Extra slides for:
THOUGHT EXPERIMENT