Future patterns of world growth

• Published date: 01 September 2018
• DOI: http://doi.org/10.1002/jsc.2226
• Author: Mizan Rahman,David Floyd
• Date: 01 September 2018

EDITORIAL

Future patterns of world growth

Many factors are leading to improved world economic growth but

under certain limiting conditions.

This issue sets out to evaluate the factors leading to improved World

Economic growth. Ten years after the Financial Crisis, deflation has

startedto disappear and interest rateshave begun to move in an upward

direction.Indeed, the World economy may havehit a sweet spot where

bothdeveloped and emerging marketsare growing at the same time.

Recovery has been very slow since 2009 and history shows that

often a slowdown occurs after a short period of higher growth. In

view of this, the issue aims to focus on how robust growth may be in

both the long and short term and whether the driving factors will be

sustainable forces in the future as well as examining how such factors

may change in importance.

The first article by Floyd examines the recent trade policy of

America and its potential risks for slowing the World economy. Whilst

America wishes to renegotiate NAFTA and is increasing some tariffs

on Chinese solar panels and washing machines and limiting takeovers,

it is also encouraging foreign investors to locate in its territory. This

suggests there is potential for more world trade especially when

China is at the same time expanding its One Belt One Road policy.

The article further looks at the improving situation in Europe and

Emerging Markets. World Trade membership of many countries is also

helping to reduce the risk of future trade wars.

The article by Ardley further analyses some of the negative

aspects of the World economy at present and its constraints on

further world growth. Much has been made of the potential for

lower growth in the United Kingdom as it sets out to reduce some

of its level of integration with the European Union. There is also

focus on potential opportunities of the Brexit process in terms of

making new trade deals and exploring opportunities in new mar-

kets that have favorable demographics and market potential. The

World Trade Organization may help to ensure that countries have

limited potential to increase tariff barriers and that trade should be

increasingly global in the long term. The article also reminds us of

the importance of establishing global brands and the increasing

nature of Multinationals having origins from a greater number of

countries. Increased flows of foreign direct investment have been

the main result so far and this seems likely to continue in an

increasingly globalized world.

The article by Enderwick shows the importance of investment in

infrastructure in order to promote future growth activity. The article

illustrates the complexities of linking up such a wide range of

countries with different histories and cultures. Administrative barriers

and credit worthiness are other issues to take into account. The article

further shows the ambitions of China to become a leading economy in

the near future.

Furthermore, in relation to China, stakeholder perspectives of its

foreign direct investment in other developing countries become rele-

vant, as it is examined by the article by Wahed and Rahman. The

emergence of Chinese multinationals as foreign investors has received

some critical reactions recently. Applying the theory of stakeholder

identification and salience, it has been suggested that three stake-

holder groups. The business community, labor community, and policy-

makers, have emerged as “expected stakeholder”groups in

Bangladesh, deserving managerial attention from Chinese FDI enter-

prises operating there.

Future growth is also going to be achieved by increasing produc-

tivity and innovation. Hasan and Jha explore the different types of

innovation that have become available that add both to product range

and productivity and costs of production. Innovation can be both

expensive and less expensive in the types of development taking

place. Product differentiation and quality focus need also to be taken

into consideration. Strategies also need developing to focus on both

applied and adaptive innovation. Increasingly, more countries around

the world are focusing on both these types and the product life

cycle is speeding up. The article also draws our attention to the

increasingly important service sector as well as innovation in tradi-

tional manufacturing areas of business activity.

An increasingly most important component of global growth will

arise from online business activities. Babu and Dey provide an inter-

esting article on how to further develop the success of online purchas-

ing. The factors determining future success will depend on trust. Such

activity will also depend on value to the customer and the perceived

costs of doing so. This suggests that firms need to provide simple

solutions that are low cost and safe in order to attract the most num-

ber of customers. Firms also need to provide successful marketing

strategies in promoting this aim.

The final article by Bernardi and Floyd on Brazil gives the outlook

of foreign direct investment there concluding that it is a market for

long term investment there. Implications for policy makers have been

identified in areas such as investment in basic education, maintaining

political stability and undertaking fiscal reforms.

DOI: 10.1002/jsc.2226

Strategic Change. 2018;27:435–436. wileyonlinelibrary.com/journal/jsc © 2018 John Wiley & Sons, Ltd. 435