Paulo Vicente, Fundação Dom Cabral, explains the impact of globalization on the development process of companies.

1. PATIMES
INTERNATIONAL SUPPLEMENT
GLOBALIZATION & TRANSPARENCY
MODELS FOR REBUILDING PUBLIC TRUST
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volume 36, number 1 GLOBALIZATION & TRANSPARENCY jan/feb/march 2013
Globalization and the Co-evolution of States
By Paulo Vicente dos Santos Alves
Historians argue whether globalization Let’s imagine two nation-states using the they didn’t innovate, the neighboring new markets with new products. Mass
began 500 or 5,000 years ago. Whichever resources of a region in which there are six nation would. production was a new form of production
is the answer you prefer, it’s much older units of taxation. Normally they share these derived from the needs of world wars.
That is co-evolution. Nations were forced to
than the usual views that it started with taxation units so each gets three units.
evolve by co-existing. Competition among We are now facing a new set of innovations
the collapse of the soviet system, or after They have the possibility of an innovation,
the countries led to a form of cooperation, in the coming decades and the public
World War II. in the broad sense of it, but this innovation
i.e. co-evolution since other nations around administration community faces the
costs the equivalent of two taxation units.
States began independently and grew in the world, namely China, India and Japan challenge of enabling these changes,
So if only one of the nations does the
relative isolation until technology allowed were not evolving as fast. That can explain and leveraging growth based on them.
innovation it will gather six units, but since
for more intensive interaction. One may how Western Europe and its colonies in the These technological innovations could be
it spent two it will end up with four units.
argue that it was already in place in the Americas advanced faster than the Far East, simplified into three major sets: genetics,
However, if both nations innovate they still
ancient world, but since the discovery of eventually forcing by arms, the opening of green tech and robotics.
share the same six resources, but since each
ocean navigation the relatively isolated trade in China and Japan.
spent two to innovate they will end up with Genetic technology will open new
areas of the world found it easier to trade
one unit each. This game of innovation has not ended possibilities but also new discussions on
and wage war with each other. In that
in the 21st century. In fact it is speeding ethics and on sustainability. Advanced
sense we can model the world as being The figure shows the payoff matrix for the
up as technology advances the speed of medicine will be capable of extending life
transformed from seven “islands” into an choices. The numbers in each quadrant
interaction on terms of trade and war. In expectations, and while a marvel for our
“archipelago”. Those “islands” were the represent the gain in taxation units
the past, this has forced city states to join human life span will stretch pension funds
Far East, Indian subcontinent, Middle of nation 1 and nation 2 respectively
forces and become the nation states, now and medical care systems worldwide.
East, Western Europe, North America, separated by a “;”.
this same evolution pressure is making Advanced biotechnology will allow for
South America and sub-Saharan Africa.
Game theory shows us that independent nation states form networks in order to more food production but also will create
According to administrative theory of what the other nation does, your nation compete and survive. new dilemmas and criticisms.
organizations, just like organisms, evolve will have a better payoff if it innovates,
Evolution is about innovation in the Green technology will affect energy
together, or more precisely co-evolve, and that is, four units is better than three if
broadest sense. It allows states to gain generation and distribution,
that also applies to nation states. Before the other don’t innovate, and one is better
advantages over other nation states within manufacturing, waste management and
globalization, they were isolated and the than none if it innovates. We call this a
their network or against opposite networks. recycling. A new energy matrix will emerge
evolutive pressure was small. In many dominant strategy, or a strategy that is
Innovation theory reminds us that there changing the geopolitical landscape while
of those “islands” one single nation state always better to pursue than the other
are five broad types of innovation: new creating new challenges and possibilities.
was capable of dominating the region and strategy.
product, new form of organization, new
creating a “nation-state monopoly.” That Robotics will reduce the need for
The problem is that since the game form of production, new raw material and
was repeated in the case of China, India and manpower while increasing productivity
is symmetrical both will pursue an new market. All of these types are possible
the Middle East. Monopolies have very little and that may bring manufacturing back to
innovation strategy, and they will end up in terms of public administration, in fact
incentive to innovate and advance. In the the developed world, changing the current
winning one unit each when they could public administration can be argued to
case of nation-states they became decadent economic balance. At the same time,
have not innovated and came up with be the very central function that enables
and eventually fall after some time. more people will need to be employed in
three each. If both didn’t innovate it would innovation to occur, and leverages it in a
tertiary and quaternary sectors, changing
After the oceans became navigable the be better for both, but they have a prize in nation state.
the power of unions. A post-scarcity world
nation-states increased their interaction innovation so both end up innovating.
The USA and other nations have will force rent to be dissociated from work.
and the evolutive pressure grew. Some
Back to the real world. Our example is adopted innovation through research Advanced artificial intelligence may claim
nations, like China and Japan, tried to
evidenced in reality by what has happened and development (R&D) using their civil rights and fight for them.
isolate themselves but the situation was
in a fragmented Europe from 1500 to defense departments to pursue “dual”
irreversible. Evolutive pressure forced As one can perceive, these changes have
present day. The nations competed technologies for decades. These
Nation-States to evolve or die. Many a lot to do with public administration in
for resources, whether in Europe, the technologies are termed “dual” because
Nation-States died while others appeared terms of policy, laws, regulation and R&D
Americas, Africa or trading with the Far they have military use but also can
and prospered. Two cases in points are incentives. Not to innovate is not an option
East. They had a prize in innovation. If become applicable to civilian use creating
the Austro-Hungarian Empire, which for nation states. The question is how to
disappeared, and the United States deal with these innovations and maximize
of America which grew to become a the society gains while balancing the
THE INNOVATION GAME (a version of the prisoner’s dilemma)
Superpower. administrative dilemmas that will evolve.
NATION 2
Game theory explains the process in a Don’t Innovate Innovate Santos Alves is a full professor at Fundacão Dom Cabral
version of the prisoner’s dilemma called Don’t Innovate 3:3 0:4 (FDC) in Brazil. He teaches in the Strategy and
the Innovation Game. NATION 1
Innovate 4:0 1:1 Emerging Markets department. He can be reached at
paulo.alves@fdc.org.br.
Permission to reprint this article was granted by ASPA on February 2013