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PATIMES.ORG	                                         PATIMES: INTERNATIONAL SUPPLEMENT                                    ...
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Globalization and the co-evolution of states

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

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Globalization and the co-evolution of states

  1. 1. PATIMESINTERNATIONAL SUPPLEMENTGLOBALIZATION & TRANSPARENCY MODELS FOR REBUILDING PUBLIC TRUST Permission to reprint this article was granted by ASPA on February 2013
  2. 2. PATIMES.ORG PATIMES: INTERNATIONAL SUPPLEMENT PAGE 9volume 36, number 1 GLOBALIZATION & TRANSPARENCY jan/feb/march 2013Globalization and the Co-evolution of StatesBy Paulo Vicente dos Santos AlvesHistorians argue whether globalization Let’s imagine two nation-states using the they didn’t innovate, the neighboring new markets with new products. Massbegan 500 or 5,000 years ago. Whichever resources of a region in which there are six nation would. production was a new form of productionis 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 tothan 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 innovationsthe 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 publicWorld 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 therelative 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 sincefor 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 stillancient world, but since the discovery of eventually forcing by arms, the opening of green tech and robotics. share the same six resources, but since eachocean navigation the relatively isolated trade in China and Japan. spent two to innovate they will end up with Genetic technology will open newareas of the world found it easier to trade one unit each. This game of innovation has not ended possibilities but also new discussions onand wage war with each other. In that in the 21st century. In fact it is speeding ethics and on sustainability. Advancedsense 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 lifetransformed 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 fundsFar 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 forSouth America and sub-Saharan Africa. Game theory shows us that independent nation states form networks in order to more food production but also will createAccording 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 energytogether, 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 andglobalization, 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 emergeevolutive pressure was small. In many dominant strategy, or a strategy that is Innovation theory reminds us that there changing the geopolitical landscape whileof 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, newcreating a “nation-state monopoly.” That Robotics will reduce the need for The problem is that since the game form of production, new raw material andwas 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 possiblethe 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 factincentive to innovate and advance. In the the developed world, changing the current winning one unit each when they could public administration can be argued tocase 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 enablesand 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, changingAfter the oceans became navigable the be better for both, but they have a prize in nation state. the power of unions. A post-scarcity worldnation-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 claimnations, 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. TheseNation-States to evolve or die. Many a lot to do with public administration in for resources, whether in Europe, the technologies are termed “dual” becauseNation-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 canand 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 creatingthe Austro-Hungarian Empire, which for nation states. The question is how todisappeared, and the United States deal with these innovations and maximizeof 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 2Game theory explains the process in a Don’t Innovate Innovate Santos Alves is a full professor at Fundacão Dom Cabralversion of the prisoner’s dilemma called Don’t Innovate 3:3 0:4 (FDC) in Brazil. He teaches in the Strategy andthe 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

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