I have seen the economist debate on the permanent declining competitiveness of workers of rich countries. It is quite interesting. Overall, I quite agree with statements of Lynda Gratton, Professor of Management practice at LBS, the CON side. But overall, I think she is idealistic in assuming a world without boundaries.

The three points: rich countries can be viewed in isolation, performance of workers across a country or region is the same, and finally about the value of teams over individual heroisme of workers as the driving force of competitiveness are in fact all based on the assumption that the world is frictionless, in different domains.

The first point is that countries can not be viewd in isolation, they must join up, yet political struggles are fierce nowadays, international organizations are at a loss on how to run the world with the ever more powerful China, India and gulf states. Trade barriers and government subsidies exist in countries for goods ranging from food to oil. Nationalisme and proctectionisme are rampant all around the world.  In a world fraught with frictions and the notion of a nation, the rich countries can be viewed in isolation.  After all the multinationals have national origins. The idea of producing multinationals to conquer the world is a 20th century equivalent to producing armies to rule the world. (Too radical) The political frictionless world is far from reality.

The second point of performance of workers around the world is converging, true… Yet as long as there are country borders, there are administrative barriers, the costs of these workers will not converge to a single point. The competitiveness is the ratio of performance and cost. The economic frictionless world is barely the case.

The The final point about the value of team over individuals is true and the frictionless paradigm worldwide cooperation works in is the internet and web 2.0. The free flow of capital, goods and people is far a perfect equilibrium. The information frictionless world is more or less true.

Of the assumptions that the three points she makes, only the last one with the internet is true. Yet overall I like her bold idealisme because she really puts out an enchanting blueprint for the world. In her rebuttal statement, she stated “We live in a joined-up world with global systems of climate and demography. ”  Challenges that mankind faces can only be solved with joined up efforts, we should behave with good will and cooperation rather than mean-spirited fear and rage.

In my view, the trends of the world are the following:

  • The world is the transition from one previous equilibrium state(US Soviet bipolar situation) to a future equilibrium state(a joined up world as Mr. Gratton proposes).
  • During this stage political strifes will give way to common causes like energy crisis, global warming and meteorological disasters.
  • Technology transfers in all domains, especially in energy efficiecy and production, CO2 reduction measures,will be blessed by governments. 
  • Trade barriers will disappear and free market will prevail. 
  • Informational technology will be invincible and will tremendously aid developing countries to boost economic growth. Worldwide cooperation among professionals will be more widespread.