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International Political Economy
Despite the attacks of September 11, 2001 and the wars in Iraq and Afghanistan and ongoing new terrorist threats, globalization is alive and well and slowly rebounding to pre-crisis levels. Businesses that seek success through globalization need to make better "country bets." To determine where they should commit their businesses. They need to assess the prospects of countries for political stability and economic growth. Making better country bets offers the best prospects for prospering in the global economy. A set of 15 principles for "getting globalization right," including estimates of corruption, leadership succession, external threats and others is offered to help businesses make effective assessments of country prospects.
The twenty-first century will witness the most rapid changes in the history of the world. Technology is on an exponential growth curve. Powerful demographic trends have resulted in fewer births everywhere but especially in the rich countries and in dramatically ageing populations. Fears of climate change are driving public policy and private investments. A number of countries are achieving vast riches and enhanced national power. These and other forces will be identified and their effects on the global economy will be described. Companies that wish to succeed in this century must anticipate and prepare for these changes.
The gap between the rich countries and the poor countries is not widening. In fact, for the majority of the world's population, that gap is diminishing. Some 60 developing countries have adopted many of the features of market economies and are growing their economies faster than the 30 rich countries. These rapid developers include India and China with 40 percent of the world's population between them. As a result, the gap between a majority of the poor, living in these 60 countries, and the people in rich countries has been diminishing for a decade. But there are another 60 countries in the world that have not adopted the features of market economies and have not joined the trend towards globalization. Their populations are not only not getting richer, but are frequently actually getting poorer. The income gap between those failing states and the rest of the world is widening rapidly. It is from those countries that future global instability and threats to the US will emerge unless the rich countries take concerted and vigorous action to generate economic development in those countries. The implications for business of these changes will be identified.
Whether in business or government, leaders are in the midst of hard times. For many leaders, these hard times provide an opportunity to strengthen their leadership positions. Leaders who seize the opportunities within a crisis can re-fashion their strategic vision for the future of their organizations, remobilize resources, and enlist the powerful emotions generated in a crisis to strengthen their ties with their followers.
Despite President Medvedev's recent efforts to transform Russia, it will remain a laggard in the global economy. The vast mineral income flowing to its government makes market oriented reform difficult. The growth winners will be the BICIs - the rising powers of Brazil, India, China, and Indonesia. Their prospects for continued growth will be assessed. Indonesia is an often-overlooked winner in the global economy. It is the world's most populous country. It is a political democracy working hard to diminish corruption. It has had years of >6 percent growth. These four countries will become major economic and political powers.
Competitive success in an increasingly globalized economy depends more than ever on worker dedication, commitment, and passion. Leadership within the organization is the principal way to generate those emotions. In this speech, business leaders will learn to master the techniques of generating those emotions in the work place.
The challenge for every leader is to act out of ruthless, data based rationality and at the same time to lead with emotional sophistication. That means having the courage and the self-confidence to change policies when new data suggests the existing policies are not the right ones. It means creating a team with skills that compliment the leader's. It means listening to others and understanding with empathy the wishes and goals of others. It means creating a work place where those wishes and goals can be satisfied and where new skills and achievements can be realized, recognized, and rewarded.
Leadership is more celebrated in the abstract than in the practice of great leaders. What we know of great leaders -- great leaders for evil as well as for good -- is that they are able to mobilize their followers to extraordinary levels of commitment and often extraordinary achievements. Those same results can be achieved by business leaders through practicing a few exercises. They are challenging but effective and can make business executives into more effective leaders.