We All Can Win
Provera, Marco Tronchetti, Global Finance
Market globalization may be seen as part of a well-defined historical and political process. Its origins go back to the postwar liberalization of trade embodied in GATT, which in turn led to the establishment in 1995 of a permanent body in the form of the World Trade Organization. It is also the result of the forming of regional economic areas, such as the European Union, NAFTA, Mercosur, and ASEAN, with the aim of furthering free trade and economic integration.
This process was set in motion by the industrialized countries, in full agreement with the developing nations. Over the past 50 years it has led to greater economic well-being, benefiting many parts of the world on an unprecedented scale.
The business community-especially large companies-has played an important part in the process despite the considerable difficulties that accompany working in open markets. Industry is going through a critical period, as extreme competition has brought with it slimmer margins, higher investment in R&D, and the need for wider global reach. At the same time, market saturation and technology have produced overcapacities and forced companies to rationalize, adopt leaner organizational structures, and cut costs. In such a competitive environment, where speedy reaction to events is highly important, any errors of strategy or timing can exact a high price.
While the removal of barriers to competition may cause problems in the short term, it works in favor of the supply of advanced goods and services at affordable prices. This is the real return brought about by investment in research and innovation and by the impressive improvements in productivity and efficiency forced on companies in their bid to prosper in the face of tougher, wider competition. …