Vocabulary notes

inevitable – неизбежный, неотвратимый

misery – нищета, бедность

to forecast – предсказывать, делать прогноз

complacency – удовлетворённость

profound – глубокий

vulnerability [¸v٨lnərə'biliti] – уязвимость

dangerous – опасный

to threaten – угрожать

to discourage – препятствовать

to quadruple [kwodr٨pt] – учет верить

hunter-gatherer ancestors – предки, жившие охотой и собирательством

to redefine – по новому определить

habitability – пригодность для проживания

to acquire [ə'kwaiə] – приобретать

obsessive preoccupation – навязчивая озабоченность

quarterly – квартальный

profit-and-loss statements – сводки о доходах и убытках

to assume responsibility – принять на себя ответственность

legacy – наследие

Comprehension and Discussion Questions

1. What are the expectations and hopes for a new economic success in the 21^st century?

2. What view of the future is prevalent in the information industry?

3. Is it possible to develop a new economy without dependence on the natural world and environment?

4. What are the first steps in redefining progress in global economy?

5. What is the global concern of the parents?

6. Acting alone, can a country stabilize its economy?

Text IV. Globalization of world economy

Over the last two decades we have witnessed the globalization of markets and production. The globalization of markets implies that national markets are merging into one huge marketplace. The globalization of production implies that firms are basing individual productive activities at the optimal world locations for the particular activities. As a consequence, it is increasingly irrelevant to talk about “American“ products, “Japanese” products or “German” products since these are being replaced by “global” products. The global acceptance of Coca Cola, Levi’s jeans, Sony Walkmans, and McDonald’s hamburgers exemplifies this trend.

Two factors seem to underline the trend toward globalization: declining trade barriers and changes in communication, information, and transportation technologies.

Since the end of World War II there has been significant lowering of barriers to the free flow of goods, services, and capital. More than anything else, this has facilitated the trend toward the globalization of production and has enabled firms to view the world as a single market. As a consequence of the globalization of production and markets, in the last decade, world trade has grown faster than world output, foreign direct investment has surged, imports have penetrated more deeply into the world’s industrial nations, and competitive pressures have increased in industry after industry.

The development of the microprocessor and related developments in communication and information processing technology have helped firms link their worldwide operations into sophisticated information networks. Jet air travel, by shrinking travel time, has also helped to link the worldwide operations of international businesses. These changes have enabled firms to achieve tight coordination of their worldwide operations and to view the world as a single market.

Over the last three decades a number of dramatic changes have occurred in the nature of international business. In the 1960s the U.S. economy was dominant in the world, U.S. firms accounted for most of the foreign direct investment in the world economy, U.S. firms dominated the list of large multinationals.

By the end of the 1980s, the U.S. share of the world output had been cut in half, with major shares of world output being accounted for by Western European and Southeast Asian economies. The U.S. share of the worldwide foreign direct investment had also fallen, by about two-thirds. Moreover U.S. multinationals were now facing competition from a large number of Japanese and European multinationals. In addition, the move toward free market economies in the countries of Eastern Europe, China and Latin America is creating opportunities (or threats) for Western international business.