Hormats, Robert D., Harvard International Review
Dramatic advances in technology and the collapse of international economic, political, and ideological barriers over the last decade have set the stage for an explosion of new business opportunities in the next century. New entrepreneurs, new technologies, and new business models will accelerate the pace of change. Business opportunities will be greater than ever in human history. Business will have the opportunity to improve virtually every aspect of human life. The next century opens full of promise, but whether it fulfills that promise will depend on what is made of it.
International Business in the 21st Century
In the first decades of the 21st century the velocity of economic change is likely to be even greater than it was in the supercharged 1990s. New businesses and business models will render many older ones obsolete. They, in turn, will quickly face competitive challenges. Opportunities will rapidly open and shut. Speed, adaptability, anticipation of customer needs, and skill in networking will determine success or failure. Agile and innovative Davids, individually and as part of dynamic new alliances, will challenge the traditional Goliaths with zeal, pursuing them in their own backyards and across national borders. Many clashes will occur in the supercompetitive e-battlefield. Goliaths will respond by improving their own nimbleness, forging new international coalitions to pool their strengths and forming partnerships with the very Davids who challenge them.
Regardless of where a company is headquartered, the probability is high that a growing portion of its customers, competitors, sources of capital, suppliers, and partners will come from other countries. Businesses will have to think and act globally, but also be aware of the potential for backlash against globalization in nations or communities where they operate; they will have to become highly responsive to myriad local political, cultural, environmental, and social considerations. The internationalization of business, combined with changing demographics-aging societies in advanced economies and growing numbers of young people in emerging ones-will require companies as never before to pursue multicultural human-resource policies and facilitate the international mobility of their best talent. The rising cost of social security and medical care for older citizens will impose huge financial demands that increase government budgets and thus the cost of capital.
To excel in the fiercely competitive environment of the 21st century, companies will need to adopt rapidly and master technologies that revolutionize manufacturing and services, as well as communication, marketing, and organizational frameworks. But to excel will not be enough if it is in the wrong product, business, or market; success will depend on achieving excellence in the most profitable lines of business and in the fastest growing markets. Management will need to relentlessly pursue new products and better ways of making older ones. Most products that will be sold ten years from now do not exist today, and many of the world's most competitive companies 20 years from now have yet to be started or are currently in their infancy.
The Path Ahead
Markets for goods, services, finance, and information have become rapidly and tightly integrated across borders. Barriers to the flow of trade and investment have fallen and deregulation has spread throughout the world as ideological divisions have collapsed and the cost of communication and data transmission has plummeted. Firms in the 21st century will have enormous opportunities not only to sell and invest in previously sheltered markets and form growing global alliances, but also to leverage technological breakthroughs by selling on an expanding international scale, access components and technology globally, secure financing by tapping world markets, and obtain human talent from a multitude of nations. …