JITE v32n2 - Under Review - Global Paradox

John Naisbitt (1994). Global Paradox , New York: William Morrow and Company, 304 pp., $23.00 (ISBN 0-688-12791-6).

Dennis R. Herschbach
University of Maryland

Like his acclaimed volumes Megatrends and Megatrends 2000 (with Patricia Aburdene), John Naisbitt's newest book, Global Paradox , examines powerful social and economic trends at work in today's international community. And like his other volumes, this is a provocative work. Naisbitt's major theme is that the expansive development of telecommunications is a driving force creating a giant global economy. At the same time, the concept of nation-state is becoming obsolete. The paradox, however, is that small organizational units are gaining greater power as national boundaries are rendered permeable by communication and information technology. Both countries and companies are deconstructing into smaller and smaller entities with greater economic power. The author sees power shifting from the vertical to the horizontal, and from hierarchical to interconnected.

Smaller organizational units are acquiring greater power because the individual entrepreneur is the most important global player. Naisbitt suggests that in a globalized economy the market niche becomes smaller and smaller, and this favors the flexible, specialty company. Contrary to popular thought, the author contends that big companies will have to break up and become "confederations of small, entrepreneurial companies in order to survive" (p. 50). "Webs" of strategic alliances will enable small and middle-size companies to produce products anywhere to the specific quality and market requirements found everywhere.

The author's theme is advanced through six separate chapters. Naisbitt first provides an overview of what he calls the "global paradox"--"the bigger the world economy, the more powerful its smallest players" (p. 12). He cites the efforts of big companies like IBM, GM, Phillips, and GE to create networks of autonomous, entrepreneurial units in order to survive. "Economies of scale are giving way to economies of scope, finding the right size for synergy, market flexibility, and above all, speed" (p. 14). The result is not only greater response to market conditions but a reduction in labor and production costs. To foster deconstruction, companies will form strategic alliances as an alternative to making acquisitions or merging. Capabilities can be added, but undue growth and cost can be avoided. Smaller units, the author contends, will lead to the more effective globalization of economies. At the same time the author suggests that, as the world is increasingly made into a single economy, traditional nation-states will become weakened. National boundaries are no longer important. He predicts that traditional cultural and ethnic differences will reemerge as a force that will weaken existing nation states. The existing political leadership will be found inadequate for the new economic age.

Chapter 2 focuses on the revolution in telecommunications that is driving the new globalized economy. Four important facets are presented: the blending of technologies, strategic alliances, the developing global network, and access to technology for everyone. Tourism, the topic of chapter 3, is used as a case study to illustrate the dynamics of the new economic globalization resulting from the telecommunications revolution.

Perhaps the greatest impact of technological change is on human behavior. In chapter 4, "New Rules: A Universal Code of Conduct for the 21st Century," Naisbitt attempts to identify ways in which individual and corporate behavior will change. The author is upbeat and suggests that instantaneous global communication provides greater access to information, which in turn meliorates behavior. It will be more difficult to hide compromised ethical and moral standards, the author observes: "With the activities of the world being replayed for us in our living rooms each night, none of us can feign ignorance about affronts to society's ethical standards" (p. 148). Politicians will be held to new standards of accountability; human rights violations will come under greater international scrutiny; a global consensus will form around such issues as the environment; and international corporate policy will be subject to greater public view. Examples from Brazil, Venezuela, Japan and the United States are used to illustrate the discussion.

Chapters 5 and 6 focus on Asia and Latin America, the two world regions where the author sees the greatest economic growth. He suggests that it is in these regions that the new global economy is taking shape most rapidly. China will shortly become the world's largest economy; Singapore, Malaysia, and Indonesia have formed a potent economic alliance, joining economic progressives Hong Kong, South Korea and Taiwan. Argentina, Brazil, Paraguay, and Uruguay have created South America's richest market through the four-nation Mercorsor agreement, and NAFTA has formed the foundation for Mexico's economic expansion.

It is in the countries of these two regions that Naisbitt sees his theme most evident: As the economies of the world become more integrated, individual countries will become less important, and the economic contributions of individuals and individual companies will become more important. The author goes so far as to suggest that eventually there will be "an era of self-rule for peoples around the world all connected with each other, a network of PCs [personal computers]" (p. 39). Experts will talk with experts across national boundaries; citizens will become better informed; there will be greater capacity for self-rule; decision-making will be localized, and culture will become universal. Greater communication, however, renders the idea of the nation-state obsolete. Government power will shift as people hold more tightly onto their heritage and reassert individual initiative. Groups of people with a common ethnic and cultural heritage will tend to reassert their common identity while still fully participating in a global economic network. "It is not that all countries will break up. The key is that there will be tens of thousands of different crisscrossing communities co-located on the same territories. Territory as a defining concept will become increasingly meaningless" (p. 37). The process of "tribalization" that Naisbitt sees, however, will not necessarily be smooth.

The author challenges conventional thought when he questions the popular perception that large multinational corporations like IBM, BP, Phillips, Honda, A T&T, and GM will dominate the global economy. This is no longer true, observes Naisbitt. Presently, 50 percent of exports in both the U.S. and Germany are created by firms with 19 or fewer employees; companies with 500 or more employees account for only 7 percent of U.S. exports, and Fortune 500 companies account for only 10 percent of the U.S. economy, down from 20 percent in 1970. The author argues that large companies must break up and "become confederations of small, autonomous, entrepreneurial companies if they are to survive" (p. 13). While the comparatively slow-moving, big companies of the 1970s and 1980s could capitalize on a superior financial base and economies of scale in order to control markets, it is the small-scale, adaptable company working within a network of entrepreneurs that will shape the economy of the coming decades.

Naisbitt's writing is lucid; he is provocative and certainly one of the more enjoyable futurists to read. Some of his views are shared by other visionaries, such as Peter Drucker in his work Post Capitalist Society , and some of his insights are corroborated by recent events. Ford Motor Company, for example, has just announced a new policy to eliminate centralized management control in order to distribute management authority around the globe. The center of power will be moved to local production centers. But even if Naisbitt's look into the future is only partially right, some of the global trends that he outlines are already impacting significantly on education and the way it is delivered. The technical complexity alone of the new globalized economic age is challenging educators. However, we have not yet even begun to ponder the complexities spawned by the confluence of technological change with thousands of combinations of entrepreneurial alliances that transcend national borders. The telecommunications revolution is remaking the global economic world, and it is reshaping education in ways that we can not even yet imagine. While this book does not provide answers to the educational future, it invites us to ponder that future.

Reference Citation: Herschbach, D. R. (1995). Book review: Global Paradox . Journal of Industrial Teacher Education , 32(2), 103-106.