DOSSIER 5

The Industrial shocks of globalization

● For the FMI: “the growth of global activity over the course of the last five years is essentially the fact of emerging countries and developing countries.

○ China: ¼ of global growth○ Brasil, China, India, and Russia: ½ global growth○ the entirety of the emerging countries & developing countries: ⅔,

● In developed nations, industry seems to be still at the center of the torment of globalization.

○ The primordial question: ■ What is the industrial future for developed countries?

● Foreign investments have been:○ globally associated with the disindustrialization of developed countries ○ associated with the unemployment in the national industries which are strongly

competed with by the importations of the new emerging countries.○ foreign investors also do actions that include:

■ fusions and “hostile” buyouts■ making a “national” industry pass into foreing control, causing a return to

protectionist policies vis-a-vis the IDEs ■ temptations of withdrawal:

● the IDEs abroad risk provoking unemployment in the country of origin

● the IDEs coming from the abroad risk looking the national character of local enterprises.

International direct investments and multinational firms

○ For many, globalization is primarily the arrival of the great multi-national firms:■ global enterprises who direct a world-wide network of affiliates

subsidiaries (sous-traitants):■ sell around the world, at the same moment, the same product:

● globalization of possibilities of production linked with globalization of the market.

● notion of a “village planet” is still not reality, (distance) ■ Still, progressive openings of states to commerce and to international

investments have permitted important development (celui-ci). ● During 90's and 00's, the states had policies that favorable IDEs.

A. Globalization and IDE's

An important growth of IDE's.

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○ IDE's :■ long-term relationship reflecting a control of an enterprise residing in a

country of origin on another enterprise situated in a country of welcome; ■ At least 10% to distinguish from movements (capitaux portefueille) .■ Grew rapidly in the 90’s

● a new phase of globalization with two peeks (2000, 2006-7) GRAPHIC 3.3: Evolution of entering flows of IDE’s 1980-2007

● Peeks correspond to waves of international fusion acquisitions which have engendered an acceleration of IDE's.

● Moreover, given the fact that enterprises profits have been high, the benefits reinvested on location have become an important component of the entering flows of IDE's

○ (CNUCED),in 2006,■ 30% of the total of global entering IDE's ■ 50% (dans les seuls pays en developpement)

International Fusions-acquisition and Service IDE's

● In developed countries, fusions-acquisitions (F&A) are more than half of the IDEs. ○ Among the 10 largest F&As

■ in the 2000’s: one can notice the wave of F&A ● in the enterprises of TIC (the “dot-com boom”)

■ between 2004 and 2006 a second wave● the banking and telecommunications sector.

Graphic 3.2 Trans-border fusions-acquisitions● For the IDEs and in sectorial terms:

○ the growing ampler taking for over 20 years by the service sector■ The service sector captures more than 60% of the global IDEs ■ Similarly, more than 50% of the IDES in the developing countries

occur in the service sector.○ by consequence, the lowering of the manufacturing and primary sectors.

■ only 10% of IDEs are in the primary sector henceforth. ■ the manufacturing industry is only 30% (41% in 1990.+

IDES and other large international variables

● Flows of IDE's have been largely increased (demultiplies.) ○ between 1990 and 2006, the global PIB has been multipled by 2.2 and the

exportation by 3.2, the IDE flows have been multiplied by 6.4.

TABLEAU 3.1 Indicators of the IDEs 1982-2006● Recent strong evolutions make a ratio appear of IDE flows to investment interior to the

country (raw formation of fixed capital)

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○ passed from 2% in the 70's to 14% in the 2000's thus the growing openness linked to globalization.

Geographic Distribution of the IDEs● United States

○ the primary investing country also the primary land of welcome for IDEs.■ However, part in total share of IDEs abroad falls continuously.

● 37.7 % in 1980; no more than 19% in 2005.● The UK, Germany, and France remain in the lead group. ● The concentration of investing countries, although diminishing, remains strong:

○ in 1980, the 15 primary investors held 96% of IDEs; in 2005, they had 86%.

Tableau 3.2—Primary countries of origin of IDE's stocks world-wide 1980 to 2005.

● Long term tendency of entering flows of IDE's indicates that the part belonging to developing countries is growing.

○ Observing the entering IDE's of 70-72 and 2004-2006, the strong evolutions reside in:

■ lowering of developed countries influence in entering IDE's: (78% to 66%) ■ much larger place for China/emerging Asia(both 4.5% to 12%) ■ New European member states (NEM10) (0 to 3.6%)

TABLE 3.3- Entering IDE flows 1970-72 and 2004-2006 (in %)

● countries which have the most cumulative IDE flows over 10 years:○ France: most elevated net sale of exiting IDE’s

■ followed by the UK and Japan. ○ China has the most elevated level of net sales of entering investments,

■ followed by, to a lesser extent, the US and Mexico. ○ Germany has entering and exiting flows that are of a comparable size

■ thus a net sale that is barely elevated.

IDE Towards Developing Countries:● The flow of IDE towards developing countries grew in a rapid fashion during the 00’s.

○ Emerging Asia itself counts for ⅔ of IDEs towards these developing countries.● Entering flows of IDE’s are up to 3% of PIB of these countries from .25% in early 90s

○ Compared to the other financial flows towards developing countries, these IDE flows represents the largest part

■ since the middle of the 90’s■ today, they represent more than 50% of it.

● Graphic 3.3-- Flow of net financial resources towards the developing countries, by trype of flow 1990-2006 (billions of dollars)

● (2004-6) China welcomed ¼ of the entering ID in the developing countries○ primary develoiping country of welcome and 2nd/ 3rd in absolute terms behind

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US.● These IDEs play a key role in the the transformation of the Chinese economy and the

evolution of its exports.○ Reform of 1979: the China developed zones of defiscalized economic expansion,

capable of attracting important IDEs that came from other Asian countries:● (Taiwan, Hong Kong)

Financial funds as International Investors:

● placement funds and other mutual investment funds engage heavily in transborder fusion-acquisitions.

○ In 2006: performed 18% of global F&As (only 4% in 2000) ○ These funds collect funds from the public and their enterprise, buy-out

companies listed on the principal global stock exchanges.○ In 2006, the two greatest acquisitions were

■ Philips semi-conductor (Pays-Bas)■ Atlanta Pharma (Allemagne)

○ Fears:○ The supportability of such important IDE’s by investment funds more

accustomed to placements in high risk stocks and elevated returns in a logic of short term stock-portfolio placements.

○ Vague concerns of dismantling of bought-out (rachat) enterprises for short term profitability.

B. MULTINATIONAL ENTERPRISES

Definition:● For the UN, an multinational Enterprise is comprised of:

○ a “mother house” (maison mere) ■ exercises control on the stocks of the invested foreign enterprises, by

possessing at least a control permiting 10% of the stocks of the affiliate○ filiates abroad.○ The possibility of controlling or orienting the productive strategies of one or

several affiliates is primordial. ○ A production abroad (and not just a distribution )

● Based on this criteria:○ In 2006, UN tallied 78,000 multinational enterprises and 780,00 foreign afilliates. ○ In 1992, it tallied 35000 with 150000 affiliates abroad. ○ The number of multinational has thus multiplied: by 2 in 15 years; 10 in 30 years. ○ Of these 78000 multinatonals,

■ 58000 originate in a developed country ■ Still, these statistics are unable to identify every multinational enterprise.

● The multinational enterprises are at the origin of nearly ⅔ of global commerce;○ ⅓ of this commerce done at the center of their network to form an international

commerce called intrafirm commerce.

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■ Example for the foreign affiliates of the great multinational firms located in France, on average:

● their intrafirm importations represent 70% of their total importations (1/4 of intermediary goods and ¾ financial goods);

● concerning their exportations, they comprise 60% of initration flom (40% of intermediary goods and 60% of financial goods).

■ Similarly, the American multinationals in 2004 were responsible for 53% of United States exports of which nearly 40% was intra-firm commerce.

Multinational or Global enterprises?● Numerous debates are still ongoing to know if there are thresholds which permit the

specific characterisation of a multinational or even global enterprise. ○ Rugman considers that the majority of the current multinational enterprises are

in fact only regional. ■ looks at the the distribution of sales of the triad (Asia, America, Europe).■ An enterprise is global if:

● it carries out at least 20% of its sales in each of these 3 regions● not more than 50% in its region of origin.

■ In 2001, of the 380 largest enterprises counted by Fortune:● only 9 are global, like IBM, or LVMH; being less than 2.5%. ● 84% are regional with less than half of sale in the two other

regions ● 6.5 % would be bi-regional.

● However, the criteria of “sales abroad” can’t ecompass all of the multinational strategy ○ For example, LVMH:

■ hardly manufactures abroad (of some 15 worskhops, only two are abroad■ but it implants thousands of stores under its exclusive brand in all the

countries of the tirade.

The 100 Largest Multinationals:● The UN analyzes 100 largest multinational firms. ● In 2005, these 100 accounted for

○ 10% foreign stocks○ 17% sales○ 13% global employment

■ The ten primary multinationals of this classification represent 36% of the foreign stocks of the 100% primary multi. firms.

Table 3.4 10 primary multinational enterprises in 2005 (in millions of dollars and number of employees)

● The100 primary multinationals show grand disparity of enterprises in terms of size. ○ 58 belong to six sectors:

■ automobile, petrol, electric and electronic equipment, pharmaceutical

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products, telecommunications, and the water, gas, and electric sector.● 84% of the enterprises come from the developed countries;

○ 24% among them come from the United States (30% in the 80’s).○ 5 grand countries have more than 72% of the concentration of these 100

enterprises: ■ US, UK, France, Germany, and Japan. ■ However, this is more diversified that in could have been in the 80’s.

Indicators of Multinationalism:● The CNUCED calculates a degree of multinationalism.

○ Composite indicator which takes the average of three ratios:■ 1. assets abroad over total assets■ 2. sales abroad over total sales■ 3. employment abroad over total employment

● For the 100 primary multinational enterprises, the average global degree of multinationalisation is around 54%,

■ therefore, more than half of grand multinationals activities are done abroad.

○ However a great amplitude/range in this indicator:■ certain of the 100 have a ratio superior to 80% (Honda or Nestle) ■ others inferior to 30% (Hitachi or Telecom Italia.)

○ this indicator has grown more than 25% in the last decade.

Table 3.5 Degree of Multinationalisation of the 100 primary multinational enterprises 1990 and 2005 (in %)

● The degree of internationalisation of affiliates, ○ measures the part of the affiliates abroad in relation to the number of total

affiliates of each enterprise. ■ The average degree for 2004 was 69%.

● Finally, the degree of geographic dispersion of the affiliates ○ introduces the number of countries in which the studied enterprise has affiliates

in relation to the total number of potential countries of welcome. ○ The average degree is 39% countries of welcome, but this variable has a large

standard deviation. ■ (Deutsche Post in more than 103 countries, Royal Dutch Shell is in 96)

● Foreign investments and localisation of multinational enterprises remain rather concentrated in their zone of origin.

○ Factors of interior agglomeration of the country of welcome also play significantly in their choice of localisation.

The Multinationals of the South● With a certain number of evaluation problems (notably the flows from Hong Kong

towards continental china and the registering of social seats of grand enterprises of

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emerging countries in the developed countries like Mittal in the Netherlands), ● FMI & CNUCED-around 17% of the total of global out-going IDEs

○ come from emerging countries ○ go in a south-south trajectory if not South-North.

● In the 100 primary enterprises,○ the weight of the multinationals from developing countries grows progressively.

■ From 1 enterprise (1999) to 5 in (2004) to 7 (2005.)■ In the 500 primary multinationals of Fortune: from 26 (1988) to 61 (2005). ■ Several are spectacular

● example: Gazprom passed up Microsoft in 2006 and became the third global enterprise in terms of business numbers.

● The China Mobile has capitalization which exceeds Vodaphone’s.● A small number of the great fusions-aquisions of enterprises of the emerging countries

have attracted attention in the course of the last years: ○ Mittal Steel Group: the largest F&A in 2006 by acquiring Acelor for 32 billion

dollars. ● Year 2006 :record-setting number of fusions-acquisitions by developing countries.

○ However, total of the foreign assets of the 100 primary multinationals of emerging countries remains inferior to, in 2004, the foreign assets of the #1 global multinational, General Electric.

● These last years, the financing of the enterprises in developing countries has also taken on a character that is very multinational.

○ Their financial possessions:■ mixture of local and international funds.

○ The new collection of capital comes from the international capital markets and continues to grow.

○ The 20 countries classified by the Banque Mondiale as countries with intermediary revenue,

■ (Brasil, China, India, Mexico, Russia) are the principal beneficiaries of these new capitals for their enterprises.

● these 5 countries represent ○ 88% of this capitalisation among developing countries ○ 10% of the entirety of global capitalization.

Determinants of Multinationalizaiton:● Recent studies show that the geographic localization of multinationals are very marked

by○ agglomération

■ enterprises co-localize themselves in order to profit from positive externalities (common local labor market, market of capital goods, public infrastructures, technological consequences, information gain, etc.)

○ proximity■ multinationals are often constrained by a distance effects;

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■ they tend to localized themselves primarily near their country of origin ● (Ex: french multinationals in Europe.)

● Multinationalisation of enterprises is based on several great principles of behavior. ○ 1). (market seeking)

■ the research of new markets in the context of the growth of enterprises ○ 2). (cost-seeking)

■ 2) the research of a decrease in the costs of factors of production, labor, capital, land, technology, in the context of international competition

○ 3). (efficiency seeking).■ the search for new market positions in the context of oligiopolistic

competition, the research of economies of scale, and the dynamic of its competitive advantages

● Three motifs of the extension of multinational’s activity:○ The offer of factors,○ the demand for products, ○ market structure

■ The opening of new markets and the multiplication of competitors can only develop their activities.

DELOCALISATION and DISINDUSTRIALIZATION

A. Delocalisation of Industrial Activities:

Definition of Delocalisation:● Strict sense of delocalizatiom:

● a displacement of an activity from one place towards another. ○ (Example closing in France and simultaneous identical opening China.)

● Delocalisation can be infra or international. ● In a very large definition

○ “all importation of goods & services having national substitutes”● comes back to a desire to qualify as suspect all importation

for fear that one could make the product or one of its substitutes on the national territory

● Advocates a return to mercantilism: ○ “export but definitely NOT import!”

TYPE OF DELOCALIZATION● off shore production:

○ part of the production that is done abroad by multinationals ○ This foreign production (fabrication) can be done by:

■ affiliates (intrafirm production, or international in-sourcing), ■ by international subcontracting, (international outsourcing).

● by externalization of production:○ of certain parts ○ or components

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○ or product assembling ○ These behaviors are already old

■ and developed with new industrialized countries in the 70s, by the intermediary of what on calls the OEM (original equipment manufacturing).

■ These geographic zones with the methods of sub-contracting have strongly grown

● European member states, the other countries of Eastern Europe, the Commonwealth of Independent States, and all of emerging Asia.

● The international decomposition of productive processes has strongly developed in recent years.

○ For example: the importations of the OCDE of parts and components coming from non-OCDE countries have gone from 18% to 33% of the total of this type of importations by developed countries.

Graphic 3.4--Importations of the countries of the OCDE of parts and components coming from non-OCDE countries.

● The possibility of multinationals cutting up their chain of adding value into a large number of complimentary but independent activities in their production process is more and more strong.

■ This phenomenon has given birth to:● the development of network enterprises ● engendered the growth of the trade of decomposed products.

■ It is coupled with:● the attractive costs of labor in Asia,● the new markets of these emerging countries, ● the collapse of costs of logistics and communications,

The Fear of Delocalization:● The fear of globalization job-loss and exercising pressures to lower salaries is not new.

○ However, recent evolutions seem to have aggravated the worries. ■ The delocalization\of jobs in tinformation technologies and services to

enterprises has brought about the consideration that a large proportion of high-salary workers could be in direct competition with certain workers of low salary-countries.

■ This problem is raised in numerous countries. ● US following the entry of Mexico into the ALENA in 1994,● Also occurred in Germany, the UK, Japan, Belgium.● More recently, Korea and other Asian countries as well as Tunisia

due to international investments departing towards

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China/Romania. ■ In the 2000’s, resurgence in France, Germany, and in the US in 2004.

● Due to the parallel degradation of jobs and the commercial(trade) balance, putting elocalization at the fore-font of the news.

● anxiety comes also from the idea that all type of jobs, even in the tertiary and qualified jobs...seem suddenly to be threatened by Chinese or Indian competition.

■ All the same the US is still the primary country of welcome for the IDEs● France attracted in 2002 the same amount of IDE flows as China,

○ 55 billion dollars. ● The trade deficit of France in relation to Emerging Asia was

equivalent to the trade surplus of France in relation to England ○ (9.6 billion euros in 2002)!

Delocalization and Jobs

● The anxieties about employment are refuted by facts and analysis. ○ Countries openness to exchanges and to international investments is not

translated into a lowering of the employment levels.● Rowthorn and Ramaswamy: the North-South commerce would explain only 20% of the

diminution of the industrial jobs in the developed countries between 1970-1994. ○ this is a much wider field than a single delocalisation,○ Update for 1970-2002 comes to around 15% on average for the industrial

countries■ notably loss of 250,000 industrial jobs in the case of France.

○ German loss of jobs to localizations towards new OCDE member countries has been estimated at 90,000 jobs (1990 to 2001)

■ being .3% of total employment. ■ Taking into acocount the permanent mouvements on the lavor market,

this number of 90,000 is equal to the number of jobs created or destroyed in Germany in a single week!

● The results for French industry indicate that around 95,000 industrial jobs will have been canceled in France and delocalized abroad between 1995 and 2001,

○ an average of 13,500 per year. ○ Comparaison, the annual raw elimination of jobs in the industry is 500,000. ○ .35% of industrial jobs have thus delocalized each year between 1995 and 2001,

■ being a little more than 1 job in 300. ● Among the delocalized jobs, a little less than half of them go to emerging countries.

○ These countries represent around 6,500 jobs delocalized per year, ■ .17% of industrial employment outside of energy, ■ or still 6% of the strong decreases in numbers.

● Around 1 industrial closure in 28 corresponds to a delocalization towards a country with a lower salary.

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○ Developed countries represent in fact the majority of the destinations of delocalization.

■ Destinations are the border countries and United States. ■ These delocalizations corresponded in large part to

● a logic of restructuring ● of recentration of groupes,

○ INSTEAD OF a research for lower costs of production.” ■ The countries with low salaries represent a little

less than half of the destinations of delocalization. ■ Among these countries:

● China would be the principal destination, far ahead Eastern Europe, North Africa, South America, and the other countries of Asia.

IDE and EXPORTATIONS:

● Lipsey and Wise “instantaneous moment” study for 1970:○ the impact of foreign production of American affiliates on the exportation of the

US,○ Results put forth a complementarity of investments/exportations.

■ The general positive effect is not however, identical from one sector to another.

● Chedor and Mucchielli have analyzed France more systematically:○ studied performances in exportation according to the destination of the

exchanges■ with the individual date of enterprises■ distinguishing the french enterprises that are

● directly implanted ● non implanted, ● done to test the influence that presence in welcoming territory can

have on the enterprises performances in exportation via affiliates. ■ By distinguishing 7 geographic zones possible for implantation, three

situations can present themselves among the french enterprises:● 1. those french enterprise present in a considered zone of

implantation and exchange (type A enterprises), ● 2.those which are absent from this zone but implanted in other

zones (type B enterprises), ● 3. and finally the enterprises without implantation abroad(type C)

● The results indicate that the rates of exportation by zone are more elevated by the enterprises which are already implanted (have affiliates) in the zone considered.

○ The implantation abroad appears then to be largely complementary to exportation,

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○ An enterprise which implants itself abroad would be able to by this fact have greater and more easier opportunities to continue to penetrate this same market on the complementary products in terms of :

■ product offers “gammes” or■ components.

B. The Disindustrialization

The decline of Jobs in the Industry:● The delocalization, in fact, participates in the disindustrialization of the developed

countries.○ Vaster phenomenon○ All developed countries experience industrial employment (l’emploi industriel)

decline in favor of the employment in services. ■ Since the 60’s, services have inexorably out-stepped industry,

● (in France, since the 50’s).■ In 2005, the EU-27 had no more than 17.1% of its employment in the

manufacturing industry, ● France 15.2%, ● Germany 19.6%, ● UK 12. %

● In France, this tendency is old; ○ since 1975, the part of industrial employment in total employment has lowered. ○ The industrial part still represented around 45% of the total in 1975

■ continues to decrease ● The lowering become stronger as the sectors become importers

and consumers of low-qualifed labor.

Table 3.7 --Evolution of the different salaried worker numbers in France in the entirety of sectors outside agriculture (2001-2007).

● Direct industrial employment lowers in all the large sectors, except in equipment goods.○ The largest market lowering is that of the automobile industries.

■ Although the numbers there now maintain an elevated and stable level since the beginning of the decade, they began to diminish in 2005.

■ For the large majority of consumption goods, submitted to a strong foreign competition, production is going to continue to decline;

● this it the case notably in clothing and textiles, sectors where the enterprises have an accrued recourse to foreign out-sourcing.

● Durable goods (furniture) and varied products (tows, sport articles) lose parts of the markets do to the foreign competition.

● As for the mass-market digital products (telephone, etc) they are now nearly all imported.

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● In the automobile sector, this was accentuated in 2006 when the automobile production of french constructors abroad passed for the first time production that was carried out on french soil.

Graphic 3.7 -- People working in the textile industry and the evolution of automobile production in France

● Between 2001 and 2007○ the french economy destroyed 511,000 jobs in industry. ○ But in this same time created 957,000 jobs in services○ A net creation of 402,000 jobs

■ + 277,000 created during construction. ○ The service sector represents now 67.8 % of the total of employed labor in the

sectors outside of agriculture. ○ Thus total employment 2001- 2007 grew 4.4%; industry has lowered 14.4%.

■ Inexorably France, like all developed countries, is becoming a country of service sector jobs.

● Numerous studies on the causes of disindustrialization in developed countries. ○ Internal factors appear as the key explicative elements of this evolution, namely:

■ 1. technological progress.■ 2. elevation of productivity in the manufacturing sector ■ 3. slidings in demand of internal consummation towards services ■ 4. demographic evolution as well as the increasing roll of service in

manufacturing production itself. ○ The commerce with emerging countries seems to be only marginal in these

macroeconomic evolutions.

C. The Delocalization of Services: The New Wave February 3, 2003 Bussiness Week “(Is Your Job Next?),

spotlight on the new wave of delocalizations, this time in the service sector.

The Rise in Implantations Abroad of the Service Sector

● The progress of information and communication technologies (NTIC)○ has resolved the technical problems of

■ non-transportability ■ non-stocked of data ■ and other services

○ has rendered possible the sectioning of service activities ○ have reinforced their “commercialization” by creating new type of exchangeable

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services. ■ A large number of service activities can now be done independent of their

geographic localization.● their production and their servicing (prestation) no longer have

occur at the same place. ● Formerly protected office jobs are henceforth exposed to

international competition. ● The existing savoir-faire in numerous services can be codified, standardised, digitalized

be it for:○ simple, low-qualification jobs

■ like the collection of data, the telephone call centers, ○ more qualifed actions

■ the development of programs, medical diagnostics starting from radiography, industrial drawing, architectural conception work.

○ The production of these service can then be fragmented and localized anywhere:■ Such a fragmentation can even be much more developed than that of

industrial products because its simply offices with minimum of material that are moved, not factories.

India, land of welcome for delocalized services● The growth of “delocalization” of the service industry is linked to the opening and

development of the services sector in India■ This country responds perfectly to the large quantity needs for a relatively

educated labor force.● The first transplantation of service into India was done by American Express in 1993.

○ These enterprises developed rapidly;■ Example: Dell

● installed its first call center in 2001 ● 2005 nearly 10,000 local workers divided among numerous

centers. ■ Also attracted consulting and study enterprises (MacKinser, Gartner

Grou)○ service implantation in India went from “a risky and exotic adventure to the

routine.”● These implantations were also done in the activities of Research and Development.

○ Example: General Electric ■ employed more than 2000 scientifiques and ingenieurs in Bangalore in

order to carry out research in multiple domains ranging ■ laboratories are also an example of the R&D carried out in Bangalore.

● master or doctorat level in science● However, implantations of service sector platforms in the emerging countries remains

entirely to the “large/great” enterprises. ○ Olsen(2006) survey of 1,100 bosses of enterprises of just an average size

■ 5% of them wanted to delocalize the service jobs that used NTIC abroad

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■ 73% have no intention of engaging in a transplantation to abroad.■ The analysis indicates also that less than 20% of American enterprises

have a strategy in terms of international production● this rate climbs to 95% for the enterprises which are classified in

the 1,000 primary enterprises in the list of Fortune magazine.

The statistic results on the delocalization of services

● The cost/benefit calculation of local labor was one of the motivations for Indian installation

○ At the time of the Internet bubble (bulle), end of the 1990’s, large salary differences

● an American accountant○ at one of the great American enterprises,○ less than three years of experience, ○ could earn between 39,000 and 50,00 dollars per year.

● In India ○ junior employée,

■ the average salary was 2,400 per year ○ for an engineer

■ less than 7,500 dollars.● Here also, it is the total cost and productivity that should be rather taken into account.

○ Certain analyses put forth evidence of a gain of around 40 (?)○ Others relate situations that are less attractive

■ even negative. ○ Elements besides the costs are also advanced:

■ like research of new markets and research of qualified laborers.● Studies have been done to know the number of potential delocalizable jobs in the

service sector. ○ van Welsum and Vickery: calculated the portion of people executing the tasks

which can be done anywhere:■ founding their work on the data of employment by profession and by

sector.○ This analysis, founded on data by professions for several countries of the

l’OCDE, makes one think that a proportion of around 20% of the total employment of services is “delocalizable.” ( Ian note: b/c of certain non-transferable factors.

Importations and Exportations of Services.

● Exchanges Data shows:○ many of the countries who benefit from implantations in the service sector have

known a rapid development of their exportations of services to enterprises and informatic services.

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○ However, many among them have also recorded a rapid growth in the importation of these services in major part coming form the countries of the OCDE.

○ These results leave one to think that, in the countries of the OCDE, the delocalization of services linked to the NTIC (such as that which is reflected in the exchanges and investments) have not yet brought about a relative decline:

■ from the segment of jobs that reoccur there ■ from the part of the tributaries that do not have a fixed location.

○ The positive advantages of delocation of services are superior to the costs, ■ even if adjustment process can bring up difficulties in the short term.

● In a more general fashion:○ the second half of the 90’s has been, in particular for the US, a period of:

■ economic growth ■ strong growth in productivity,

● THUS widening thus the gap with the other European nations■ This growth is because of the application of the NTICs in the

economy. ● Mann) 2003: the considerable reduction of the price of products in

the service sector is a key element of the technological changes○ In this context, the globalization of production of these

NTIC products and services has play also a role.■ Example: Mann estimates that between 1995 and

2002, globalization and fragmentation of the production of these products and services has

● brought about the lowering of prices from 10 to 30% of these productions

● contributed to the growth of productivity by .3 points per year,

○ additional of $230 billion of PIB.

3. THE INDUSTRIAL FUTURE OF EUROPE● The current evolutions of globalization have renewed reflections about the industrial and

productive future of developed countries and notably that of Europe. ○ Will there be a new industrial revolution?○ Does Europe have a future in industry/and or in services/ can one develop

without industry? ○ Will the retreat of industry still permit the maintenance of a heart of innovation

and of Research and Development in Europe? etc.● Different recent students have weighed in on these questions.

○ The global results that are the most simple put forth several evident contemporary evolutions like

■ 1) the growth of international competition ■ 2) the augmentation of international integration of markets)

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■ 3) the growth of the technological changes■ 4) the shortening of the cycles of production■ 5) the arrival of new organizational forms.

○ New challenges also appear: ■ demography, ■ emerging Asia

● new capacities of production● new markets

■ the environment.● If there is little doubt in confirming that the relocalizations will affect the European

industry and numerous basic services,there will be the necessity of a new focus on: ○ the quality of products, ○ the segments of products with a strong added value○ high technology.

● One must consider that the production of products instensive in non-or little qualified labor will continue to diminish in the PIB of the countries of the OCDE.

● Additionally, it is not set in stone that R&D activities must follow the localizations of manufacturing industries;

○ Conversely, the competition in Research and Development will intensify It is thus necessary for the developed countries:

● to pursue import efforts in Research and Development● to push the frontiers of technology and certainly ● to organise R&D around technology clusters:

○ agglomeration of technological activity ○ positive impacts which are linked to the technological

externalities that they bring.● The future of European production counts on the allocation of knowledge.

○ There has thus already been several decades since the announcement of the entry of the developed nations into the economy of knowledge,

■ What methods does Europe give itself in order to be successful in this entry?

● There is thus the true technological challenge.

I) Dossier 5: Les chocs industriels de la mondialisation, Mucchielli1) Quel avenir pour les pays développés ?2) Croissance les 5 derniers années : BRICs ensemble représentent la moitié de la croissance mondiale (Chine = ¼)3) IDEs associés(a) Globalement : à la d´industrialisation des pays développés

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(b) Sectoriellement : chômage (dans des industries nationales concurrencées par importations de nouveaux pays émergents)(c) IDEs à l’étranger risquent de provoquer du chômage dans le pays d’origine(d) IDEs en provenance de l’étranger risquent de faire perdre le caractère « national » des entreprises localesB) Investissements Directs Internationaux et Firmes Multinationales1) Mondialisation et IDEs(a) Une croissance importante des IDEi IDE : investissement (>10%) de long terme pour que l’entreprise de pays d’origine puisse contrôler une entreprise dans pays d’acceuilÞ <10% à mouvements de capitaux de portefeuille/spéculationii flux d’IDE entrants culminent en 2000 à $1,411 milliard ; en 2006 à $1,306 milliard. (1990 : $55 milliard)Þ hauts niveaux correspondent aux vagues de F&A(b) Fusions acquisitions internationales et IDE de servicei 2 grandes vagues : d’abord dans le secteur de dot-com boom, 2ement dans secteur bancaire/télécommunicationsii ampleur grandissant de secteurs de services / baisse dans des secteurs manufacturier et primaireiii secteur de services atteint plus de 60% des IDE mondiaux vers 2000s (par contre à 1990 : 49%)(c) IDE et autres grandes variables internationalesi 1990-2006 : PIB x2,2 ; flux d’IDE x6,4ii ratio : flux d’IDE/investissements intérieurs des pays ~ 14% en 2000s = ouverture croissante liée à la mondialisation(d) Répartition géographique des IDEi Pays développés :Þ Etats-Unis : premier investisseur mais aussi premier pays d’accueil· MAIS : part d’IDE sortant chute continuellementÞ Royaume-Uni, Allemagne et France dans ‘groupe de la tête’Þ Concentration forte : premiers 15 pays investisseurs = 86% mondialementii Pays en développantÞ Tendances à long terme des flux entrants d’IDE indiquent que la part de flux des pays en développement augmenteÞ Chine + Asie émergente : 4,5% à 12%Þ Europe NEM10 (nouveaux états membres) : 0 à 3,6%iii France, R-U et Japon : IDE sortants le plus élevésiv Chine a le solde net d’investissements entrants le plus élevé (suivi d’E-U et du Méxique)v Allemagne : flux entrants et sortants de taille comparable : solde net plat(e) IDE vers pays en développementi Pays émergents d’Asie comptent pour 2/3 des IDE vers pays en dvpmntÞ Chine accueille le plus d’IDE entrants(f) Les fonds financiers comme investisseurs internationauxi Croissance en 2000s, risqueii ????2) Les Entreprises Multinationales

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(a) Définitioni Entreprises multinationale : une maison mère + filiales à l’étranger (ONU)Þ 1992 : 35,000 multinationales/150,000 filiales à l’étrangerÞ 2006 : 78,000/780,000ii entreprises multinationales : à l’origine de ~2/3 du commerce mondialÞ 1/3 = commerce intrafirme(b) Entreprises multinationales ou globales ?i ‘Globale’ (Rugman) si :Þ au moins 20% des ventes dans chacune des trois « zones »Þ pas plus de 50% des ventes dans région d’origineÞ 9/380 grandes entreprises (IBM, Coca-Cola, LMVH)Þ MAIS : par exemple, LMVH ne fabrique pas à l’étranger, donc on doit utiliser aussi d’autres critères(c) 100 Plus grandes multinationalesi 6 secteurs primaires : automobile ; pétrole ; équipement électronique et électrique ; produits pharmaceutiques, télécommunications ; électricité, gaz, eauii 84% des entreprises originaires des pays développées : Etats-Unis, R-U, France, Allemagne, Japon(d) Indicateurs de la multinationalisationi CNUCED : « degré de multinationalisation » :Þ 1. Actifs à l’étranger/actifs totauxÞ 2. Ventes à l’étr/ventes totalesÞ 3. Emploi à l’étr/emploi totalii degré moyen global de multinationalisation : ~54%Þ la plupart des activités des grandes firmes multinationales s’effectuent à l’étrangeriii degré d’internationalisation des filiales : part des filiales à l’étranger vs. nombre de filiales totalesiv degré de dispersion géographique des filiales : nombre de pays où une entreprise a des filiales vs. nombre de pays d’accueil potentielsv [mais en général, investissements à l’étranger et localisation des entreprises multinationales restent assez concentrés dans zone d’origine](e) Multinationales du sudi Nombre de F&A attire l’attention : gaz, électrique, pétroleii Financement des entreprises des pays en développement prend un caractère multinationaliii BRIC + Méxique = 88% du total de capitalisation dans des pays au dvpmt(f) Déterminants de la multinationalisationi AgglomérationÞ les entreprises se colocalisent pour profiter d’externalités positives (Silicon Valley)Þ Multinationales souvent contraintes par effet distance ; tendance à se localiser d’abord près de pays d’origineii 3 grands principes de comportements de multinationalisationÞ market-seeking : rch de nouveaux marchés dans cadre de croissance de l’entrepriseÞ cost-seeking : rch de moindres coûts des facteurs de production (capital, travail, terre, tech) dans cadre de concurrence nationaleÞ efficiency-seeking : rch de nouvelles positions de marché dans cadre de concurrence oligopolistique· rch d’économies d’échelle· dynamique de ses avantages concurrentiels

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C) Délocalisation et désindustrialisation1) Délocalisation des activités industrielles(a) Définition : délocalisationi déplacement d’une activité d’une place vers autre [infra ou internationale]Þ « toute importation de biens et de services ayant des substituts nationaux peut être considérée comme une délocalisation » -Van Welsum et Vickeyii offshore : fabrication effectuée à l’étranger par des multinationalesÞ par des filiales : « production intrafirme » ergo international insourcingÞ externalisatoin de production de certaines parties, composants, assemblage = international outsourcingiii OCDE : organisation de coopération et développement économiquesiv Décomposition internationale des processus productifs s’est fortement développée dernières annéesÞ importations des pays OCDE de parties/composants en provenance de non-OCDE· 1992 : 18%· 2004 : 33%(b) Crainte des délocalisationsi Craintes principales : pertes d’emplois/pressions à baisse sur salairesÞ Concurrence de travailleurs en prov des pays à faibles salaires(c) Délocalisations et emploii Inquiétudes sur l’emploi démenties par faits et analysesÞ Pays OCDE ont enregistré des niveaux de productivité et de salaires réels moyens plus élevés qu’ils se sont spécialisés dans la production de B&S pour lesquels ils disposent d’un avantage comparatifÞ France perd 250,000 travails de 1970-2002 (15%)Þ Allemagne pas vraiment affectéÞ Etude sur la France· Une entreprise réduit fortement (au moins 25%) les effectifs employés dans une courte période à l’intérieur du pays· En même temps, augmente importations du même type du produit· 0,35% des emplois industriels délocalisés chaque année 1995-2001Þ pays à bas salaires : peu moins de la moitié des destinations de déloc(d) IDE et Exportationsi 3 types d’entreprises françaises classifiées A, B, CÞ A : présente dans zone d’implantation et d’échange considéréeÞ B : absentes de zone d’impl mais implantées dans d’autres zonesÞ C : sans implantation à l’étrii L’implantation à l’étr apparaît être largement complémentaire de l’exportationÞ Donc une entreprise qui s’implante à l’étr peut avoir des opportunités plus grandes/faciles pour continuer à pénétrer le même marché sur des produits complémentaires en termes de gammes/composants2) Désindustrialisation(a) Décroissance des emplois dans l’industriei Désindustrialisation des pays développés : baisse tendancielle de l’emploi industriel au profit de l’emploi dans les servicesii Emploi industriel direct baisse dans tous les grands secteurs sauf biens d’équipement face à la concurrence étrangère(b) Création de plus d’emploi dans secteur service = création nette d’emploi

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(c) Raisons pour désindustrialisation dans pays développési Progrès technologiqueii Hausses de productivité dans secteur manufacturieriii Glissements dans la demande de consommation interne vers servicesiv évolution démographique ainsi que rôle croissant des services dans production manufacturièrev **dans ces évolutions macroéconomiques le commerce avec pays émergents n’apparaît que marginal3) Délocalisation des services : la nouvelle vague – « is your job next ? »(a) L’envolée des implantations à l’étranger dans les servicesi Progrès des NTIC (technologies de l’informatique et de la communication) a crée de nouveaux types de services échangeablesÞ Grand nombre d’activités de services peuvent être réalisées indépendamment de leur localisation géographique à production et présentation pas besoin de se dérouler au même endroit· Emplois de bureau exposés à la concurrence internationale· Saisie de donnés, centres d’appels téléphoniques· Développement de logiciels ; diagnostics médical à partir de radiographies ; dessin industriel ; conception architecturale(b) L’Inde, pays d’accueil des services délocalisési Développement du secteur des services en/ouverture d’IndeÞ Main d’œuvre relativement éduquéeÞ American Express en 1993 (‘back-office’)ii Implantations se font également en Recherche et DéveloppementÞ 1) Moins de 20% des entreprises américaines ont stratégie de dvpmt internationaleÞ 2) 95% des entreprises classées dans les 1,000 premières de Forbes-oui(c) Résultats statistiques sur la délocalisation des servicesi Calcul coût/efficacitéÞ C’est parfois un gain de 40%, parfois même négatifii Welsum/Vickery : Potential offshoring of ICT-Intensive Using OccupationsÞ Pour déterminer les professions à retenir (qui peuvent être réalisées n’importe où), descriptions de tâches selon 4 critères· 1.) utilisation intensive des TIC (information/communications tech)· 2.) Production pouvant être commercialisée/transmise grâce aux TIC· 3.) Contenu en connaissances fortement codifiable· 4.) absence de nécessité de contacts en face à faceiii environs 20% de l’emploi total des services est « délocalisable »(d) Importations et exportations de servicesi Exportations de services à croissance rapide des importations de ces services en majeure partie en prov des pays de l’OCDE (organisation de coopération et de développement économiques)ii Pour l’instant : avantages positifs de déloc des services liés aux NTIC > coûts malgré des difficultés soulevées à court termeiii Mann : mondialisation + fragmentation de fabrication de produits/services ont engendré baisses de prix de 10 à 30% ; contribué à croissance de productivité de 0,3%/an ($230 milliards de PIB)D) Le futur industriel de l’Europe ?1) Y aura-t-il une nouvelle révolution industrielle ? L’Europe a-t-elle un avenir dans l’industrie et/ou services ?

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2) Quelques évolutions contemporaines évidentes :(a) L’accroissement de la concurrence internationale(b) Augmentation de l’intégration internationale des marchés(c) Accroissement des changements technologique(d) Raccourcissement des cycles des produits(e) L’avènement de nouvelles formes organisationnelles3) Défis :(a) Asie émergente avec nouvelles capacités de production et nouveaux marchés(b) L’environnement4) R&D n’a pas forcément prédestination à suivre les localisations des industries manufacturières donc pays développés doivent poursuivre les efforts R&D5) Donc :(a) production manufacturière et de services classiques basée sur principes de disponibilité de capital et travail (K et L)(b) avenir de la production européenne table sur dotation en connaissancei quels moyens l’Europe se donne-t-elle pour réussir cette entrée ?

FUCK GOOGLE DOCS FORMATTING

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