New Report Identifies Trends and Issues in Globalization for the Next Decade

March 16, 2004

                                                                                                                                                   Contact:
                                                                                                                                                   Cynthia S. Shaw
                                                                                                                                                   (202) 687-4080
                                                                                                                                                   css27@georgetown.edu

New Report Identifies Trends and Issues in Globalization for the Next Decade

 With a global gross domestic product of $47 trillion, global trade now accounts for more than 17 percent of the world's economic activity. At the same time, anti-globalization sentiment due to oppression, exploitation and injustice, security concerns due to terrorism, and protectionism due to past trade policy errors threaten to disrupt the activities of international business. As we look to the next decade, what do leading business, policy and academic experts forecast for the future of international business?

Georgetown University's Delphi study, "A Forecast of International Business and Trade Shifts," conducted by McDonough School faculty Michael R. Czinkota and Ilkka A. Ronkainen, aims to assist business leaders by presenting the analysis of corporate presidents, board members, and policy makers from the Americas, Asia-Pacific and Europe on changes in the international business environment over the next decade and the impact of these changes on corporate practices. Czinkota and Ronkainen have conducted the study every five years for the last 20 with a 76 percent historic accuracy rate.

"Forecasting changes is crucial for the preparation of responses to them," said Czinkota. "As researchers, we should be ready to provide insights into alternative courses of action when globalization causes major changes in the environment and practices of business and policy."

One of the key trends and issues forecast by the participants in Czinkota's and Ronkainen's study is the emergence of China and India as the hotspots for growth geographically. "China will no longer be just a contract manufacturing base but will project outward with its own products and technologies," said Ronkainen.

The study also reveals that the dollar is seen as retaining a strong role as reserve currency, with declines providing only short term currency value advantages for U.S. exporters. Survey participants predict that security concerns will slow down business transactions and the exchange of information in the near term, but that over time, U.S. actions will succeed at making terrorist targets less vulnerable. Additionally, more safety steps will mainly benefit developing nations by helping them attract investments.

The survey participants view trade negotiations as having a bright future provided that nations are willing to focus on the issues most important to them rather than trying to play a role in all arenas of trade and investment.

Within this landscape, the survey participants predict that corporations will continue to be confronted with demands for greater transparency and accountability. Outsourcing pressures in service industries will require firms to improve their ability to coordinate the interfaces between suppliers and customers. According to Ronkainen, "Continued innovation will be crucial to obtain and retain first mover advantages, and customer needs will have to be targeted more precisely in order to achieve new levels of customer satisfaction." In addition, new revenue streams will need to make up for the loss of past income sources, and global brands will have to share the platform with strong local brands.

"We in the education sector must provide global insights to a global audience," said Czinkota, "and often with the goal of managing national transitions." New knowledge centers will collect knowledge and knowledge providers from around the world and distribute their educational messages far beyond national borders.

Czinkota and Ronkainen are on the marketing and international business faculty at the Georgetown University McDonough School of Business. They are the co-authors of several books, including International Marketing (7th edition), International Business (7th edition) and The Global Marketing Imperative. Ronkainen has served on the board of the Washington International Trade Association and was the founding editor of the association's newsletter, Trade Trends. Czinkota was Deputy Assistant Secretary of Commerce in the U.S. Government where he was responsible for macro trade analysis, departmental support of international trade negotiations and retaliatory actions, and policy coordination for international finance, investment and monetary affairs.

About Georgetown University

Georgetown University is the oldest Catholic and Jesuit university in America, founded in 1789 by Archbishop John Carroll. Georgetown today is a major student-centered, international, research university offering respected undergraduate, graduate and professional programs on its three campuses. For more information about Georgetown University, visitwww.georgetown.edu.

>> Download the Delphi Study [PDF format]


Fourth Georgetown McDonough School Delphi Study Examines Geographic Issues, Policy Concerns, and Corporate Strategies for International Business