The accelerating pace of structural change thrusting multinationals more squarely centre-stage in world affairs means that the economics of competition in many industries have been altered fundamentally, and probably irreversibly. What is loosely termed ‘global competition’ is the outcome of how individual firms have reacted over time to the changing balance of opportunity and threat. The opportunities have been pervasive, given the declining regulatory and technical obstacles to the internationalisation of firms' activities. But so too have been the threats, for not all were able to respond adequately to the new standards set by the leaders. The actions taken by both leaders and followers have, at each turn of the wheel of fortune, helped to create the next round of change. Though most enterprises in developing countries have been by-standers in many rounds, more are now coming forward to play their part for the future. That a Taiwanese enterprise, the Evergreen Marine Corporation, has emerged as the world's largest container shipper reflects the new opportunities, even for latecomers in established industries.
This chapter explores why external change in the international political economy has had the uneven impact on industries we showed in the previous chapter. Some reasons are not hard to find. For example, electronics has transformed many industries, but left others like agriculture relatively unmarked. If during the last twenty years, the costs of automobiles had declined as fast as those for memory capacity in computers, today a Rolls-Royce would cost 50 cents (van Tulder and Junne, 1988). Equally, regulatory change transformed financial services, but had lesser impact on chemicals.