Multinationals and Economic Development in the Era of Globalization

The processes of globalization, within which the strategic evolution of MNEs analyzed in earlier chapters has occurred, involves not only increased integration between national economies but also an increasingly systematic policy emphasis on generating those individualized characteristics that define them. This then points again to the role of the generation and progression of differentiated sources of competitiveness at the core of national development strategies. Deriving from this another crucial factor of recent decades has been the increased commitment to technological change as a source of growth and development, for both firms and national economies. Here we can see an analogy for the process of creative transition, within the competitive evolution of MNE subsidiaries (see Chapter 2), operating at the level of national economic development. Thus, at early stages of their pursuit of industrialization as a source of development, countries may possess potential sources of competitiveness (latent static comparative advantages) which local enterprise lacks the capacities to operationalize effectively. Then inward technology transfer can provide the firm-level competences to secure early growth. But eventually policy will need to target indigenously generated sources of the firm-level drivers of competitive individualization and sustainable development. Building local technological change as an impetus to growth has resulted in the generation of national systems of innovation (see Chapter 8) and the pursuit of dynamic comparative advantage.