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Globalization of Production

Globalization of Production. Strange, “States, Firms and Diplomacy” Lynn, “Unmade in America” Blinder, “Offshoring”. Changes in the structure of production since the 1970s driven by:. Accelerated rate and cost of technological change Increased capital mobility

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Globalization of Production

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  1. Globalization of Production Strange, “States, Firms and Diplomacy” Lynn, “Unmade in America” Blinder, “Offshoring”

  2. Changes in the structure of production since the 1970s driven by: • Accelerated rate and cost of technological change • Increased capital mobility • Cheap and fast international communication

  3. Spillover effect of structural changes in the global economy: • New middle class • Demands for democratization and economic flexibility • Intensified competition for market share among countries – a source of state power • Role of global corporations? • State-firm diplomacy?

  4. Changes since the early 1990s: • Opening up of previously closed economies • Information revolution • Intensified global competition • Desire to drive up stock prices • Result: global assembly line based on subcontracting; corporations focus on marketing and distribution

  5. Effects of the global assembly line: • Cheaper products • Security risks: political disruption; natural disaster • Social costs to the US? • Globalization?

  6. Offshoring • Third industrial revolution • Similar to previous revolutions: increased global efficiency at the price of some social dislocation • Most important dividing line: between impersonal and personal services • Developed countries need to adjust: train young people for the jobs that will be available; provide stronger safety nets

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