Globalization or Regionalization?

Joko Susanto

Chart of Debate

Not Regionalization

Regionalization Hettne (1998)

Dicken (1998)

Gamble&Payne (1996)

Rugman (2000)

Tieting Su (2002)

Hirst&Thompson (1999)

Harvey (1990)

Rees (1994)

Hoogvelt (1997)

Ohmae (1995)

Giddens (1999)

Castells (2000)

Not Globalization

Globalization

Key Variables

Not Regionalization

Regionalization Complexity of Regionness (Hettne,1998)

Production Chains (Dicken,1998)

Mode of Governance (Gamble&Payne,1996)

MNE Concentration (Rugman, 2000)

Long-Cycle Fragmentation (Tieting Su, 2002)

Trade to GDP Ratio (Hirst&Thompson,1999)

Structure of Employment (Harvey,1990)

Permanence of Arms Economy (Rees,1994)

Transformation of Capital-Labor (Hoogvelt, 1997)

Importance of Regional Powerhouse (Ohmae,1995)

Emergence of Real-Time Economy (Giddens,1999)

Importance of Network Economy (Castells,2000)

Not Globalization

Globalization

International Production Network“a networked internationalization is at the core of the production process” (Castells, 2000)

Real-Time EconomyA dynamic and responsive supply-demand system results in a real-time planning, manufacturing, distributing and feedback updating. www.innovationmagazine.com

Global Supply-Chains“Surrounding every Dell factory in the world are these supplier logistic centres, owned by the different suppliers of Dell parts.” (Friedman, 2005)

Mode of Governance

Complexity of Regionness

Regional Power-House “the economic pendulum to swing away from nations and back toward regions” (Ohmae, 1995)

Asia’s Growth Triangles

Trade to GDP Ratio (1)

1913 1950 1973 1992

France 17.7 10.6 14.5 17.8

Germany 17.6 10.0 17.6 28.5

Japan 15.7 8.5 9.1 9.1

Netherlands 51.8 35.1 40.0 42.6

UK 22.3 18.0 19.7 18.0

US 5.6 3.5 5.2 7.0

The degree of trade openness for the advanced economies was not much different in the mid-1990s than it was at the end of the belle epoque of international trade in

1913(Hirst & Thompson, 1999)

Trade to GDP Ratio (2)

1913 1950 1973 1992

China 1.4 1.9 1.1 2.3

India 4.7 2.6 2.0 1.7

Indonesia 2.2 3.3 5.0 7.4

Korea 1.0 1.0 8.2 17.8

Taiwan 2.5 2.5 10.2 34.4

Argentina 6.8 2.4 2.1 4.3

Mexico 10.8 3.5 2.2 6.2

Total World 8.7 7.0 11.5 13.5

There is an increasing integration of the developing economies into the international system. Thompson (1999)

MNE Concentration[t]he vast majority of manufacturing and service activity is organized regionally, not globally, as showed in the relative persistence of MNE concentration in ‘the era of globalization’. (Krugman, 2000)

Country or Bloc 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

United States 164 157 161 159 151 153 162 175 185 179

EU 129 134 126 126 149 148 155 155 156 148

Japan 111 119 128 135 149 141 126 112 100 107

Switzerland 11 10 9 9 14 16 14 12 11 11

South Korea 11 13 12 12 8 12 13 12 9 12

Canada 12 9 8 7 5 6 6 8 12 12

Brazil 3 1 1 1 2 4 5 5 4 3

Australia 9 9 9 10 3 4 5 7 7 7

China 0 0 0 0 3 2 3 4 6 10

Others 50 48 46 41 16 14 11 10 10 11

Total 500 500 500 500 500 500 500 500 500 500

Changes in the Fortune Global 500 as quoted by Rugman (2000)

Long-Cycle Fragmentationthe global trade system is, instead of fully integrated, fragmented in a long cycle of structural configuration of certain states. (Tieting Su, 2002)

Structure of Employmentthe process of capital accumulation is becoming flexible with respect to labor processes, labor markets, products and pattern of consumption as characterized by the emergence of new sector of production, new financial service, new market, etc (Harvey, 1990)

Percentage of Employed Population In

Agriculture Industry Services

1960 1973 1981 1960 1973 1981 1960 1973 1981

Australia 10.3 7.4 6.5 39.9 35.5 30.6 49.8 57.1 62.8

Canada 13.3 6.5 5.5 33.2 30.6 28.3 53.5 62.8 66.2

France 22.4 11.4 8.6 37.8 39.7 35.2 39.8 48.9 56.2

West Germany 14.0 7.5 5.9 48.8 47.5 44.1 37.3 45.0 49.9

Italy 32.8 18.3 13.4 36.9 39.2 37.5 30.2 42.5 49.2

Japan 30.2 13.4 10.0 28.5 37.2 35.3 41.3 49.3 54.7

Spain 42.3 24.3 18.2 32.0 36.7 35.2 25.7 39.0 46.6

Sweden 13.1 7.1 5.6 42.0 36.8 31.3 45.0 56.0 63.1

UK 4.1 2.9 2.8 48.8 42.6 36.3 47.0 54.5 60.9

USA 8.3 4.2 3.5 33.6 33.2 30.1 58.1 62.6 60.9

OECD 21.7 12.1 10.0 35.3 36.4 33.7 43.0 51.5 56.3

Structure of Employment in Selected Advanced Capitalist Countries as quoted by Harvey (1990)l

Source; WTO International Trade Statistics 2006