helping businesses operate,
American multinationals are learning how to substitute public benefits (such as funding a community amenity) for bribery.
Yet some of the same companies are silent on whether U.S. officials should be permitted to sign on as lobby ists after they leave office.
Serving as a representative for a foreign organization is perfectly legal, of course; but “foreign agent” sounds sinister – and may indeed have troubling implications.
The subject of political advantage is also controversial because companies often keep political operations behind the scenes.
In deed, a company’s political strategy is likely to be less transparent than its product strategy.
Businesses don’t offer tours of the inner workings of the political factory.
Even those analysts who manage to get inside have to piece together a story.
George Lodge, a welcome observer of IBM’s office of Governmental Programs,can only speculate about how IBM influenced changes in Brazil’s restrictive compuler-import policies.
and the public.
Indeed, as globalism grows in markets.
These complexities should not deter businesses from thinking harder and more often about their relationships with government
Localism in polities becomes more important.
Officials whose mandate derives from local opinion determine the rules of the game.
As trade boundaries between nations blur, government become more relevant because they can make it easier it easier or harder for businesses to operate.
Understanding and influencing public opinion becomes as critical as understanding and influencing consumer preferences.
Competing on polities is not simple.
Nor will it alone guarantee success today.
Clearly.
There is no substitute for the basics of providing high-quality products to customers.
But there is also no excuse for naiveté and inaction on the political front.
Thriving locally in the Global Economy
In the future, success will come to those companies, large and small, that can meet global standards and lap into global networks.
And it will come to those cities, states, and regions that do the best job of linking the businesses that operate within them to the global economy.
Sweeping changes in the competitive landscape, including the presence of foreign competitors in domestic markets, are driving businesses to rethink their strategies and structures to reach beyond traditional boundaries.
Increasing numbers of small and midsize companies are joining corporate giants in striving to exploit international growth markets of in trying to become world-class even if only to retain local customers.
At the same time, communities are under considerable pressure to understand what they need to enhance-and in some cases even preserve-their local vitality.
Local residents and civic leaders are expressing concern about their communities economic future, particularly in light of the impact of global forces on where businesses locate and how they operate.
Some see a basic conflict between social and community interests that are largely domestic or even local, and business competitiveness issues that often are international in scope.
If the class division of the industrial economy was between capital and labor, or between managers and workers, the class division of the emerging information economy could well be between cosmopolitan with global connections and locals who are stuck in one place.
To avoid a clash between global economic interests and local political interests, businesses must know how to be responsive to the needs of the communities in which they operate even as they globalize.
And communities must determine how best to connect cosmopolitans and locals and how to create a civic culture that will attract and retain footloose companies.
The greatest danger to the viability of communities is not globalization but a retreat into isolationism and protectionism.
In the global economy, those people and organizations that are isolated and cut off are at a disadvantage.
They are targets for nativists who feed on discontent by blaming outsiders, scapegoating foreigners, and urging that barriers be erected to stem the global lide.
But if communities retreat into isolationism, they are unlikely to solve the very problems that led to their discontent in the first place.
Lronically, the best way for communities to preserve their local control is to become more competitive globally.
This lesson began to come into sharp focus for me when I started to explore over 37 emerging business alliances and partnerships around the world.
I saw that those companies often were surpassing their peers by linking forces in international networks.
But I also saw how controversial their actions were in their own countries and cities, and how irrevocably they were altering life back home.
What I saw made me wonder how the rise of a global economy changes the meaning of community, which is largely rooted in place.
And I started thinking about how global forces could be marshaled to support and develop communities rather than cause their demise.
Beginning in 1993, I undertook a civic-action research project in five regions of the United states that connect with the global economy in different ways: the areas surrounding Boston.
Cleveland, Miami, Seattle, and Greenville and Spartanburg in South Carolina.
By looking at those cities and regions through the lens of business.
I was able to view local economies not as abstractions or aggregate statistics but from the point of view of those inside the organizations that struggle every day to make and sell goods or services.
I could listen to what real people had to say about how they were faring.
I was able to sound out business and civic leaders about their strategies for improving their constituents’ economy and quality of life in light of the global changes.
And I identified some ways in which the global economy can work locally by capitalizing on the availability of those resources that distinguish one place from another.
The New Criteria for Success
In the industrial economy, place mattered to companies because it gave them control over the means of production—capital, labor, and materials—and access to transportation centers that minimized the cost of moving products from one location to another.
In the global information economy, however , power comes not from location per se but rather from the ability to command one of the intangible assets that make customers loyal.
These assets are concepts, competence, and connections.
Today a place has value if it can provide companies with at least one of these resources.
Concepts are leading-edge ideas, designs, or formulations for products or services that create value for customers.
Competence is the ability to translate ideas into applications for customers, to execute to the highest standards.
Connections are alliances among businesses to leverage core doors and widen horizons.
Unlike tangible assets, these intangible resources are portable and fluid, and they decline rapidly in value of not constantly updated.
World-class companies keep their supplies of these assets current by being more entrepreneurial, more learning oriented, and more collaborative.
They continuously seek better concepts and invest in innovation.
They search for ideas and experience and nurture their people’s knowledge and skills.
And they seek partnerships with others to extend their competencies and achieve common objectives.
Companies have several ways of deriving concepts, competence, and connections from the communities in which they are located.
Regions can be superior development sites for concepts because innovators can flourish there, come into contact with new ways of thinking, and find support for turning their ideas into viable businesses.
Regions also can distinguish themselves by enhancing production competence through maintaining consistently high quality standards and a highly trained workforce.
And they can provide connections to global networks in which businesses find resources and partners to link them with other markets cities can