The 4 forces of globalization : Enterprise, Knowhow, Capital, Markets: Issue 01

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Enterprise, Knowhow, Capital & Markets are perhaps the 4 principal drivers of modern day business. One of the major reasons of globalization and the east west convergence is because “Enterprise” and “Markets” have largely shifted to Asia and the rest of the world while “Knowhow” and “Capital” still are dominated by U.S. and Europe. Today both need each other as never before. Fortunately such collaborations are effective and are increasingly happening through cyberspace, at competitive costs and with increased efficiencies.

It is only after Enterprise finds Knowhow that it searches for Capital to drive into Markets. But enterprise is extremely demanding. It means involvement. To get involved in everything from concept to commissioning.It means also getting your hands dirty in every process to churn out most efficient and competative products and services. Competative businesses are thus increasingly being driven by Asian entrepreneurs or managers,using western Knowhow and Capital and capturing the fiercely competative global markets, of which the most lucrative chunk is now the unexplored Asian markets of fast growing populous nations like China & India.

Though there is in each case the convergence of the East & West, in patterns where knowhow and capital is supplied by the West, there are some very significant exceptions showing that more upheavals on the way.The automobile industry is one such area where Knowhow shifted to the east before the markets, as Japanese Car makers made early inroads into Western Technology domains.

All that happened because of restrictive patenting technologies of the U.S. that required paying hefty royalties and licence fees and no permission to indegenise critical technologies. That saw the Japanese build everything anew, the transmission system, the engine and the steering wheel mechanism. Every part in a Japanese car became a conceptually innovative product, turning out to be much more efficient and cost-effective. The Japanese car became a totally new automobile, more fuel-concious and compact then its Western counterpart and beat them to capture global markets. This adversity of fighting the restrictive U.S. patents was a boon in disguise for the entire Asian markets as the Knowhow spread from Japan to Korea to India and China. Today the U.S. has lost its technological capibility to match Asian motor makers and as a result its biggest companies are closing shop.

Now the key question before the West is will they try to bottle up solar technology and renewable energy initiatives and face the same consequences as the Automobile, as Asia developes its indigeneous products.