Shaking it Up: When Competition Meets Cooperation in the Global Marketplace

Posted in The Gnovis Blog

Every time I pick up a newspaper or turn on the television, recessions, shifting power structures, and potential “shake-ups” in the global economy are the words of the day. New powers are emerging, old powers are faltering, and no one really knows where we are headed as we spin into a new decade of economic uncertainty.

However, one thing seems clear: competition is, and will remain, the name of the game – with cooperation as a close runner up. I recently read The International Economy and Economic Development by Gary Gereffi and Institutions, Institutional Change, and Economic Performance by Douglas North, and, although I am certainly not an economist, both authors got me thinking about potential economic shifts.

USA keep out

Obviously, capitalism has always fueled competition, and in the lifetimes of most Americans, there were not many powers that could compete with the economic and political strength of the USA. At the time of Gereffi’s piece, the USA, Germany, and Japan were clearly “the strongest economies in the world.” However, the global landscape has changed in the meantime: Japan is struggling with deflation; we are constantly reminded that the US is over 12 trillion dollars in debt, and other world powers are gaining momentum. China is producing new technologies at a breathtaking rate, India is providing professional services at increasingly low prices, and Brazil boasts one of the world’s fastest growing economies. The rise of so many potential global hegemons signifies that we are on the edge of a redistribution of power that will certainly “shake things up” across national boundaries. Even on a local level, competition is changing the way we operate, especially here in the US: immigration has caused increased competition for jobs, housing, and resources, resulting in changes in laws and regulations regarding who to let in … and who to keep out.

So, is competition an unintended consequence of international development? As North states in Institutions, changes in society’s margins can lead to changes in the overall norms and rules of the game. China and India are prime examples of countries that have come out of the margins in terms of global competitors – and who will be next? The more countries that are able to come up with successful strategies to enter the global market, the more competition they will bring to current hegemons. With new players and new competition, I think we are likely to see a reconfiguring of both the written and unwritten rules of international trade.

futureSo where does cooperation fit into the international puzzle?  North indicates that cooperation becomes increasingly difficult when more parties belly-up to the trading table, but it seems to me that players who learn to balance cooperation with competition are going to come out ahead. With more and more powerful countries coming to the forefront, I think the US will have to open up to cooperation with these powers in terms of modified rules…or else take a seat in the dugout.  Cooperation can start as simply as increased language proficiency. Statistics show that China and India have more English speaking people that we do here in the US, while most Americans are fluent in…how many languages? Oh. One. English.