GEOPOLITICS AND GEOECONOMICS

05/10/2017

INTRODUCING THE SDGs (the sustainable development goals)

1. First goal: related with poverty. The situation is improved even if something else is to be done. We
have already speak about the ownership rights: it is a very important aspect in Africa where many
international firms, as Chinese firms, have invested a lot of money and a lot of resources in order to
buy very important quantity of lands.
2. The second goal is related with the problem of hunger and to achieve food security, which is an
issue that has become strategic since 2007-2008 when the rising in prices of most of the
commodities cause many social problems particularly in MIMA countries (Europe, the Middle East
and Africa) and there are some scholars that argued that the so called Arab-spring movement was
very much dependent upon the rising of prices of the most important commodities. The goal of
ending hunger when the increase of the prices made problems to a lot of countries. The goal of
ending hunger is one of the most important goals of this era. There is a strong focus on small-scales
food producers, in particular women, indigenous people, family farmers, pastoralists and fishers. As
you can see there are very important links between those statements and the concept of basic
needs and development. Another important aspect is the goal of maintain genetic diversity of
seeds, cultivated plants and domestic animals. Why? Because in the last 20 years the investments
coming from large multinational companies, in particular in the field of biogenetic (Bayer). These
investments reduced very much the genetic diversity in many countries. On one side, it reduced by
diversity and so an important ecosystems value, on the other side is clear that the reduction of
genetic diversity and the spreading at a global scale of very few global seeds put small farmers in
situation of marginality. Small farmers are very much dependents for their income and even for
their life on the availability of these local seeds. If these local seeds disappear because of the
development of the global system of global seeds managed by many large companies, this can cost
many problems for hundreds of million people, in particular in Africa, South America and Central
Asia. Another word that is important to point out is resilience (a buzzword today, common word, it
means to adapt proactively to different changes) agricultural practices; resilience is a concept
related to adaption to climate change. What we need is the capability to cope with the potential
negative implication of climate change. What does climate change mean for agricultural systems? It
means less water, a very difficult situation in terms of quality of water. One of the most important
fact is the sources for adapting our way of producing foods to the new climate conditions. It is also
call rediscovery of the local agricultural practices. There isnt only one way to adapt. Correct and
prevent trade restrictions and distortions in world agricultural markets, Why? The most develop
markets (US, Europe) still practice many protectionist measure against the agricultural products
exported by emerging countries. There are a lot of costumes duties for the foods that we import
from less develop countries.
3. This case ensures healthy life and promotes wellbeing for old ages. Reduce the global maternal
mortality rate to less than 70 per 100.000 live births. Today this number is about 95 per 100.000.
Another important aspects are the road traffic accidents, air, water, soil pollution and
contamination. To Increase the money put into the health sector. Stress on the world Retention
why? Because there is a very important migration flow from the less develop countries to the most
development countries of people who work in the health sectors.
4. Ensure inclusive and quality education for all and promote lifelong learning. This is a very universal
thought. Gender disparity is a very important idea in this theme; particularly in the less develop
countries. There are many disparities between woman and men in education. Gender equality is a
very general and universal aspect.
5. Achieve gender equality and empower women and girl. At present, there are at least 120 million
girls who has experience this practice. The problem is becoming important in EU and Italy for the
migration. Violence trafficking are all elements important for these development.
6. Ensure access to water and sanitation for all. The first one is to adopt and implement integrated
water resource management approach in different levels including the transnational one. It means
to adopt a more integrated approach to the exploitation of water. One of the most important
problem in invest in the developing countries is that most of water is for the tourist sector in the
touristic resorts. It is necessary a more integrated approach to the exploitation of water. Open
defecation is another problem. One of the most important goal is providing toilets and bathrooms
in the not develop countries.
7. Ensure access to affordable, reliable, sustainable and modern energy for all. The problem here is
energy efficiency and there are lots of indicators that confirm that energy efficiency is increasing
quickly in most of the countries (China) and to increase the share of sustainable energy. Sustainable
energy is a more democratic system of providing energy; it is possible to spread energy also in very
isolated rural areas with sustainable energy systems.
8. Promote inclusive and sustainable economic growth, employment and decent work for all. There
are some aspects that are clearly very important: equal pay, the problem of slavery and the
problem of reduce the use of child soldiers. Child soldiers are about 8-10 years, more than 300
thousands.
9. Build resilient infrastructure, promote sustainable industrialization and foster innovation. This is a
clear problem of coastal areas; these areas have to cope with the problem of flowing in the very
severe way. Promote sustainable industrialization, a general problem, even if some quantitative
elements are provided. Retrofit industries: retrofit means to clean up or reduce the impact of
pollution on water, air and so on. Retrofit industry is an industry that is very develop in Europe, US
and Japan, but is not so develop in emerging countries.
10. Reduce inequality within and among countries. A sort of goal that aim to reduce equality within the
countries. Another important aspects: first improve the regulation of financial markets and
secondly try to give voice to the developing in the decision making process that regard global and
international economic and financial institution, such as the role of this countries in the World
Bank.
11. Make cities inclusive, safe, resilient and sustainable. (INCLUSIVE) Cities are the places where the
inequalities are higher, conflictual places for different groups. (SECURITY) The problem of security
that make cities very vulnerable. (RESILIENT) The capacity of the cities to adapt to the new ethnic.
Sustainable is a basic world. Resilience to disasters, manager of disasters is the principal work
because they earn a lot of money and competencies. Sustainable include all the other concepts.
12. Ensure sustainable consumption and production patterns. We have already said something when
we have spoken about the circle economy. There is also the consumer dimension of the problem
which it means to reduce the food waste (20-30% of the amount of the total food produce).
13. Take urgent action to combat climate change and its impact. What is going to append at the
conference of the parties 21? We have to wait the decision of Trump. At the international level, this
is the most important issue. The develop countries have accepted to provide 100 billion dollars
annually by 2020 to address the needs of developing countries to improve their climate policy. We
 have to understand who is going to manage this money. Who? The World Bank. Some Scholar have
express very negative positions against this choice, in their view the World Bank continues to
operate with the western model.
14. Conserve and sustainably use the oceans, seas and marine resources. The problem is harvesting
and overfishing, illegal, unreported and unregulated fishing. Another problem is to managed the
problem of litter (immondizia). In some areas the litter is a sort of industry, which represent an
important front for marine life. We have a new continent that is establish in the Pacific Ocean (the
great pacific garbage patch), a continent made by plastic wastes and litter in general. In the more
optimistic view the continent is big at least like Texas (0.4% to 8% of the size of the Pacific Ocean).
Many argue that this state have to become part of the United Nations.
15. Sustainably manage forests, combat desertification, halt and reverse land degradation, halt
biodiversity loss. There are some important elements also from the economic point of view, for
example desertification provokes emigration, increasing problems for agriculture and a real
difficulty to manage property water. There is also the problem of the management of soil in the
most develop countries (for example Italy). There is the problem of the sharing of the benefits
arriving from the utilization of genetic resources. This represents the business for the future. Why
are genetic resources so important? What is the most important industry about genetic resources?
The food industry, the pharmaceutics industry, cosmetic and fitness industry, etc. What is the main
problem here? Who has the stock of genetic resources? The most important stock of biogenetic
resources can be found in Africa and Latino America and in general in all poor countries. So they
have genetic resources but not the economic capabilities to manage all of these resources. Who
has the capability to manage the resources? The most develop countries. So there are some
develop county who use the biogenetic resources without give nothing to the others poor
countries. What are genetic resources? If we want to speak correct we need to say genetic
biodiversity like plants and bacterium.
16. Promote just, peaceful and inclusive societies. The economic important of organized crime is
increasing everywhere. Develop effective, accountable and transparent institution at all levels.
Public participation represent basic element in this respect.
17. Revitalize the global partnership for sustainable development. International cooperation, new
public partnership, to reformed financial institutions.

All these goals are interconnected.

THE NORTH-SOUTH DIVIDES IN A GEOGRAPHICAL PERSPECTIVE. WHAT DOES SOUTH MEAN (TODAY)?
The main goal of this presentation is to try to answer to this question. What is the sense of south today?
And how this concept is evolved? The United Nations asked to Willy Brand to answer to the questions how
is organizing today the international economic system? What are the most important elements that can
explain the north-south divide? This report provided an important analysis with an important focus on the
failure of the world economic system to provide social and economic equality for humanity. What was the
most important logic of the international policies to reduce the gap between the north and south
countries? The Brand report pointed out how poorly effective were these kind of policies, how poor was
the capability of these politics to reduce the north-south gap and this report highlighted some solutions
mainly based on the concept of international cooperation. Put your attention to mutual interest. What
does mutual interest mean? It means that to reduce the gap between north and south countries in this
approach can have basic positive economic implications, not only for the countries belonging to the south
part of the world but also for the most develop and richest countries. Cooperation was considered to be
the tool and cooperation in the Willy Brandts approach meant above all the setting up and the
development of new international institutions. These elements were not translated into practice because
of the cold war political context. The Brandts report remains a paper report. How the north and the south
were mapped from the economic point of view? The divide is not based on the geographical aspects. The
line divides North America, the Mediterranean Sea, the south border of Asia, and finally the Asian Tigers
from the South. According to some indicators and economic, social variables, Brand mapped the divide.

North countries: South countries:

rich countries (GNP), poor countries (GNP),
large industries, agriculture of subsistence; raw materials
export industrial product, and agricultural product exports;
capitalistic marked-orientated agriculture local-based economic sectors;
and agro-industrial chain, import industrial products
Large rich cities. peripherality from financial markets
and networks

The Willy Brandts report confirm very well what we have already consider: the important of the dualistic
approach (70s and 80s) and a stage based approach, all these elements pointed out the role of the
financial support by the richest countries in order to make the less develop counties to improve their
conditions. It is clear that this traditional way of conceptualizing the north-south division is completely
outmoded; this way has no political, economic and cultural implication today. We cannot represent the
contemporary economic system continuing to utilize this kind of approach. Few arguments support this
consideration: first of all we know very well that the GDP is a not a good way to represent the concept of
development, we need something more. Secondly there are new economic actors that have contributing
since 1980 to make more dynamic the international economic order. We have different faces in which we
can see this kind of dynamics (Asian tigers 1980s, BRICS since 1990s; 2005 the next 11 emerging countries).
Another important aspect is the todays strategic role of raw materials so the countries consider part of the
south have today an increasing importance of the row material (energy above all). Then we have to
remember the new industrial geography have completely transform the industrial landscape of the world
economic system and today we have manufacturing is everywhere and at the same time the restructuring
and industrial crisis in the traditional north.
The concept that today we consider as more capable of representing the present situation of the
international economic system is the global south. We have two different dimensions: (more geographically
oriented concept) there are many areas in the South of the world that today play an important role in
global networks. We have countries, national economies, but more frequently regions and cities that have
become important parts of the new global network. The second dimension is more social oriented: South is
a social, political and economic condition of marginality, peripherality that characterize different areas also
belonging to countries of the North. So Global South, from a geographical point of view, is a concept that
refers to the fact that many countries traditional consider as part of the north are today more dynamic and,
at the same time, it refers to a social, political and economic condition of marginality that characterized
also North countries. How do we represent today the world? What language do we have? Are we using old
words to represent todays world economic system? How we conceptualize in a map the contemporary
world system? The risk is to utilize an old language to represent new phenomenal. What conceptual map
do we have for representing the emerging world system? To answer these question we have to consider
two different dimensions: today we have a new and different spatial order, but we are not able to
represent effectively this spatial order. When you dont have a word to represent the situation you kiss a
very important tool. What is the new economic geography? Are still we living in a bipolar system? Not after
the cold world. At the same time are we witnessing a multipolar world? Or are we experiencing a new
world without a central polar? The second dimension is the new paradigm that is making the economic
geography, related with the concept of globalization. What is globalization?
1. New economic geography and new geopolitical conditions (today we have a geopolitical
fragmentation world): we are living in a period of chaos, because the cold war left a vacuum space.
There are new global players, new and fierce competition, new leaders, and a very complex
governance that very often doesnt work. But who runs the world from the economic point of
view? China, USA? G7/G8? But now G8 doesnt work because Russia is out caused by Crimea. G20
(G8 + other countries)? But we have new players, new important countries. The next 11 emerging
markets (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippine, Turkey, South
Korea, Vietnam) some of these have the question mark because its not totally right call it emerging
markets. Regional organizations (UE, NAFTA, ASEAN, Mercosur etc.).
The we have the pivot states (states that have a regional influence), they play a role at regional
level: if they fail the consequences are regional. The pivotal states are important from the
demographic point of view, they have an important geographical position (access to maritime
route) and the opposite are the land locked states which are usually the poorest countries in the
world. The pivotal states have a good level of infrastructure, a good level of resources and a good
economic potential to be exploited in the future. (Egypt, Arab world, South Africa, Sub-Saharian
African states, India and Pakistan, South Asia, Brazil, Argentina, Venezuela, Mexico, South America)
Today we have a very dynamic geopolitical and economical situation. We are no longer able to
make a world picture.
2. Globalization: a different logic of functional of the economic system; it is not simply a process
through which new national economies take the leading role, at the expense of the other national
economies. It is a process of changing of the leading country. It entails a new logic in the
functioning of economic systems and a new complex system of governance (multilevel,
competition).

DIFFERENT PERSPECTIVES ON GLOBALIZATION

1. Your view on globalization
2. Defining globalization
3. Contesting vision on globalization

What is globalization? Stronger interaction between countries, it is something who related national
economics. Globalization has winners and losers in a bipolar logic. No longer matters, only if you are part of
the network of globalization you are getting closer. Globalization is built through diversification, to put
different characteristics in the same network from the economic and social point of view. Globalization
means to overcome barriers but these overcoming have different meaning, for example this is wrong from
the human point of view (think about the crisis of the immigrants). Not all the poor countries follow the
same trend, so the gap between poorest and richest countries is increasing. Technology allows overcoming
barriers. Globalization is sharing knowledge.

12/10/2017
DEFINING GLOBALIZATION
There are many different definitions of globalization. First definition: Globalization as a big buzzword in
political speech. It is a very famous world with a very fuzzy (confuso) meaning. In the XX century we always
spoke about modernization as the leading process that was consider to be changing the world. Today
Globalization is playing the same world. Globalization is something very fuzzy.
Second definition: the attention is based on the word process,: a process which embodies a transformation
in the spatial organization of social relations and transitions, assessed (valutata) in terms of their intensity,
extensity, velocity and impact. Relation that are today more intensive, extensive because contribute to
define large geographical systems, fast and impact. This means that these elements make today this
process much quicker than in the past. What does interregional mean? The relationship between different
regional blocks (EU, MERCOSUR etc.). Exercise of power means that globalization is consider as a process
that has a dramatic impact on the way power plays at the international level.
Third definition: globalization as process in which the constraints of geography on social and cultural
arrangements recede (ritirarsi). We have more relationships between different place and people.
Globalization is not only a matter of physical perception.
Fourth definition: Globalization is a collection of dialectical human-agency-driven (because too often we
have de idea that globalization is something above us, that we cannot contrast, a sort of natural process;
the stress on human-agency-driven means that there is a concept of human agency, the role of groups,
power, people is driving globalization and they can define the direction of globalization; this also means
that globalization is a matter of power) process which created local-local (globalization is not something
related with nation-nation perspective but it put within the same networks different local places) and
personperson networks of inclusion/compression (globalization means that some places are
interconnected very well and others are excluded by the building up of these networks; compression on the
contrary is related with time, if you belong to the same network time is compress, things happen very
quickly) that increasingly transcend territorial/national borders and stretch to become global in proportion.
We believe that globalization is something above us, but it is not true, we are building globalization. One of
the most important problems of globalization is democracy.
Fifth definition: Globalization is an economic, political, social and cultural set of processes. It is impossible to
define globalization as a single process. Places (cities and regions but not states) across the globe are
increasingly interconnected. Social and economic relations increasingly occur at the intercontinental scale.
The globe itself comes to be a recognizable geographic entity (this is something related with perception,
awareness; we think to the globe as a unit thanks to globalization). Globalization does not mean that
everywhere in the world became the same. Nor is it an entirely even process (globalization means inequality
in the velocity of the processes, for example the spread of civil rights is very low); different places are
differently connected to the world (some places are very well interconnected others not). Globalization is an
historical process, it is not something completely new; but today the scale and the extent of social, political
and economic interpenetration is qualitatively different to international networks in the past. These
statements point out the difference between the international order that we had until the 80s in
comparison with the global order and disorder that we have today. Place is a very basic idea in the concept
of globalization.

CONTESTING VISION ON GLOBALIZATION:

Three positions: the Hyperglobalist, the sceptics, the transformationalists. These are position profoundly
different.
1. Hyperglobalists: we are leaving in a completely new age; the world today is completely different
form the past; there is a sort of break. The role play by national economies is decreasing and there
is no chance for the states to take back the control from an economic and political point of view.
Borders and states are no longer important, they dont exist. There is only a single global market, a
completely liquid market where flexibility is the most important element. Nation states are ding.
 New forms of governance are emerging. Who is sitting above? WTO, etc. Who represent the below
level of governance? Local places, cities and metropolitan regions. The regulatory power of states is
eroding. This vision became popular after the URSSs collapse. The most important scholars of this
vision were Fukuyama and Ohmae. The main argument is that today we have only one economic
and political system, after the collapse of the Berlin Wall there is no alternative to the
multinational-capitalist economy. The world is converging to the neo-liberal political order and to a
single global capitalist market. After the end of the communism, there are no possibilities to think
about different economic and political system from the western economic system. This is the
idealistic end of history. Fukuyamas idea is too simple and wrong, we cant speak about a single
form of capitalism. Ohmae wrote the end of nation states, where he argued that the economic
and political powers today are concentrated in large metropolitan regions. London is much more
important than UK, California is much powerful than the federal states in Washington, Padania
more important than Italy. This idea is too easy.
2. Sceptics: in their view there is nothing new than was in the past. They question the very existence
of globalization. They also pointed out that the world economy today is not more interconnected
that it was in the past. The global market has lots of barriers, also in terms of no monetary barriers.
Another aspect is that national governments remain the key of regulation in the global economy.
But the state is regained authority status and position. The driving force in this vision is regionalism
and regionalism is not seen as a step before globalization. The Hyperglobalist for them are just
smokescreens that obscure the real fact. They claim for the opening markets but they are the first
to make protectionism. Globalization is a political agenda, is a political program that aimed at
strengthening the economic and political powers of largest capitalists economies. There is a critical
discourse regarding what globalization is and how globalization is organized.
3. Transformationalists: the most realistic approach to globalization, the best way considering and
approaching globalization. Globalization for them is real and is restructuring all the different
aspects of the society. Globalization came from an historical process so it is not totally new. History
and geography matter for globalization. Globalization is not a universal process but has different
characteristics in different places. Globalization is a political statement. The most important
statement is the role of nation-states is altered but their role is not necessarily eroded.
(Hyperglobalists: states are no longer important; sceptics: states remained the most important
actors; Transformationalists: nation-states are important but with different from the past). States
remain important but they have different characteristics from the past. Globalization is the effect
of a historical transformation. Present globalization is different in quality from the past. What does
quality means in this case? It is true that the state has not the capability, as in the past, to control,
from the political point of view, how the intern territorial is changing. Also in the hyperglobalist
view we speak about above level (UE, WTO, and IMF) and below level (cities and city-regions).

GLOBALIZATION, NEW GEO-ECONOMICS AND MULTILEVEL AND MULTI-ACTORS GOVERNANCE

The main elements which contribute to define what globalization is:
Crisis of the modern cartographic way of representing the world: we cant no more think to a world
based on nation-states even if nation-states are still important but the emerging of network logic is
more fundamental. We have dynamic areas (cities, metropolitan regions, etc.) in poor countries
well-connected and very poor areas in rich countries.
New actors, new spatial scales: states but also international organizations, NGO, multinational
firms etc. which are all connected through the network logic. Globalization means the interaction
of different local places within global networks.
 From the historical point of view, many scholars argue that there are different waves of
globalization and we have already considered this point talking about the different approach. In the
modern period we can identify at least three different waves of globalization:
o 1870 1871 and ended with the first WW: a period where international trade increases
very much. The key actor was the nation state; which were the main driving forces? The
telegraph was a very important technological innovation, opening of the Suez Canal which
increased the international trade between East Asia Countries and European Countries,
innovations in the field of transport technology (utilization of steel and iron for ships and
the adoption of power engine in the commercial navy which contributed to reduce the cost
of transportation).
o 1945 1980: in 1945 the level of international trade, increased in the first wave of
globalization, collapsed and reached the same level that it had in the 1870. In the period
from 1915 to 1945 the world economy wasted all they had earned: this period was mainly
driven by USA capitalism, the Marshall Plan and the Japan recovery.
o Since early 1990s: characterized by three elements: role of the emerging countries,
financial globalization, and dramatic development of IT technologies.

Why are we interested in these historical elements? Because these different waves of globalization confirm
very well that globalization is not a linear process but on contrary it is a stop-go process. It is not a natural
process. There are cases in the past that globalization was stopped, so globalization is not something that
we cant change. Globalization is a political and cultural process.
Globalization means widening, intensification, acceleration of relationships, between different
areas, nodes (snodo), places, actors etc. Globalization is not an even (regolare) process, there are
some regions, cities more interconnected and others that are less interconnected.
Very often globalization is consider in a very semplicistic way. These are very common stereotypes:
o Annihilation (anientamento) of time and space (geography is no longer important; it is
more or less true if you are part of the same network)
o Homogenization ad universal key-trend (globalization means put in the same network
different cultures and local factors)
o The metaphor of the borderless world, flat world
o The world as a global village (today is a global village but just for some areas but it is not an
universal statement)
Financial networks matters more and more. Technology is important. Liquidity means that with the
click of the computer you can transfer a huge quantity of money from a place to another and this
means affect the economic situation of a country. New products mean that trade products not so
well regulated by the financial organization. Decoupling (disaccopiamento) means that the trends
in finance are no longer related with the trend in the real life. All these elements make more and
more uncertain the world economy.
Consumerism as behavior, consumers society; there is global spreading of capitalism models. This
means that there is a very important behavior also in the emerging markets that create consumers.
Dramatic spreading of IDE (foreign direct investments driving force behind the spreading of
multinational firms) and multinational firms, considered as the key-forces. The footloose logic,
there is a sort of disruption between multinational firms and national economy. Multinational firms
are not so embedded in the national context as they were in the past. They have a global
orientation and flexibility. This means that their behavior is very much related with a global
 perspective and not national market (Panoptical view, they have the possibility to understand how
different national and regional market change in every period).
The increasing role of R&D, science, knowledge. These are today the new levels of the economic
power. The global competition is mainly a matter of the capacity of managing these elements but
they are more complex and uncertain environment.
This means that we are witnessing (testimoniando) a process of definition of coopetition networks.
To sum up: complexity of technology its a risky environmental, internationalization of efforts and
coopetition networks (Mercedes and BMW, they are two different firms and they are competitors,
but they cooperate very much for the development of the hydrogenous power because
technologies and sciences are so complex that larges multinational even if they are competitor they
choose to cooperate).
Transnational economic oligopolies (concentration of power). Globalization and democracy dont
live together very well. Oligopoly of economic power is based on multinational firms boards, global
networks of firms, panoptical approach to global markets and national markets. But there is also a
political oligopoly made by leaders (Blaire UK prime minister). All these important leaders with
the multinational firms make a network of political power. Where can we see these oligopolies? In
the meeting of Davos (Switzerland) or at the forum Ambrosetti in Cernobio. These are the places
where this kind of people meet and debate about the future of the world economy.
All the elements that we have pointed out have as consequence the changing role of the state as
economic and political actor: crisis of the concept of State as a container. State has the capability
to control what is internal to his borders, to control the national financial and political system.
Globalization destroys the possibilities for all the states to control the national system of financial,
economy and policy.
A second way to say that is the retreat of the nation-state: what we are witnessing is a very
complex and uncertain process of transformation from the Keynesian-regulatory state to the
entrepreneurial state (this type of state has to facilitate the attraction of investments and increase
the national economy competitiveness). In the literature the passage is from the Keynesian (the
state had the capability to increase the aggregate demand through the public expenditure) national
(it was possible to think at the state as a container, as a political and economic actor that was able
to manage a national economy, the nation states were the most important economic a political
actor) welfare (the provision of services to the youngest and oldest etc.) state (the state was the
actor who manage this economic environment) to the Schumpeterian (we are thinking about
international competition, innovation in technology and organization and the role of state as an
political and economic actor in order to increase the competition) postnational (our world of
reference is no more related to the nation-state but to a world open to international and global
dimension with an decreasing role of the nation states) workfare (the attempt (tentative) to
translate the attention from how to provide money to unemployed people to programs for
improving the capacity of people to find new jobs; if you were unemployed the state provided you
with some benefits. How is the changing? If you refuse the job you lose the benefits or the state
give you the benefits only if you accept to attend to a training course for improving your
capabilities to find a new job) regime (means a system of actors and rules that are coordinated in
attending to better results, you dont have the states as main actors but also have others actors
and institutions). States are becoming facilitators in order to attract investments; states have to
help to increase competitiveness of the nation.
13/10/2017
GLOBALIZATION-KEY ELEMENTS
Globalization is not a linear process; it is interrupt by stop&go steps. Crisis of the concept of State-as-a-
container or retreat of the Nation-state, the state is not more able to manage the political and economic
differences of the system. All these elements make the role of the state changing dramatically. Two
different ways to express the idea that the economic and political role of the state is changing. This
fundamental shift of the state can be interpreted by the shifting from the Keynesian state to the
Schumpeterian state.

Schumpeterian Postnational Workfare Regime (SPWR) means:

- Much more attention on the concept of technological innovation and on the figure of the
entrepreneurship.
- the focus on the competitiveness: winners and losers (degree of uncertainty)
- Focus on the problem of attracting investments: Italy for example has some problems. The general
ideas is that states have to attract investments in a space of more and more mobile flow
- The way unemployment is considered. In the Keynesian way unemployment is seen as a result of
the capitalistic dynamic, as a social structural issue. In the SPWR unemployment is regarded as an
individual problem related to the incapability of the people to adapt to the changes of the work.
The general idea is that economy is changing so quickly that workers are not able to adapt to this
changes.
- Social programmers have to change accordingly
- Conditionality: in the welfare regime if I was an unemployed the states give me money even if I was
an alcohol addicted, in the SPWR the money provided to people is influenced by the life of people
(se vuoi I soldi devi adeguarti e cambiare il tuo stile di vita, devi smettere di fumare, devi accettare
il lavoro che lo stato ti offre)
- Regime: a conceptual framework for addressing what public policy is.

GLOBALIZATION IS A PROCESS
Globalization is a process always in progress, always changing, from the geographical, historical and
political point of view. It is not a post-political (there is nothing to debate from the political point of view,
there is not political implications) process. Globalization is a process that implies conflicts between
different political groups and discussions. Globalization can develop further but also slow down and politics
matters but on the contrary it is a politic process. Globalization is not a deterministic process, it doesnt
follow a linear way of develop. It is an unbalanced process in terms of dimensions and theoretical issues
involved and in terms of areas that are involved (some cities and regions have benefited from globalization,
others not; this is true also form an economic point of view). There are different speed processes: finance
and trade run very fast (the icons of globalization) but the capacity of regulating globalization is not run so
fast. We usually have the idea that globalization is something that works above us, it is over us. But it is not
true. Globalization means the interaction between the local and the global. It is a process that is fed
dialectically by interaction between the local and the global (Glo-cal environment). Globalization is fed
(nutrito) by bi-directional relationship. It is a mix between the bottom-up and top-down process. An
example: Tourism is an important global network so you can imagine a global network that is made by the
relationship between different places. Pesaro (the local) it became important node in the tourist global
networks because Gioacchino Rossini is born there. Pesaro contributes to create the global network of
tourism but also how the global change is important to Pesaro. Globalization is not a top-down approach, it
is a mix. It is clear that quality and geography matters: the capability of a node, a place, of the local to
become part of the global network depends on the quality of local resources. Local resources include many
different things: physical infrastructure, the historical culture etc. This is the problem because there are
some local areas that have very poor resources. Quality matters, history matters, geography matters. In
terms of institutions and social networks (the local networks of social agencies), what is very important is
the quality of the local resources in order to become an active player in the definition of global networks.
So some areas are active others are passive. The capacity of the states to manage the process of
globalization is decreasing, what the states can do is to facilitate this kind of logic, that means to help the
local to develop a vision in order to exploit (sfuttare) the resources to become part of the global network.
Political agencies is also important in the globalization process. So the crucial stake (paletto) in this game
is democracy. Who decide?

Globalization is not only a process but also a personal and social experience. It is something that changes
our personal life and the perception that we have of the place where we live. We speak about global
neighborhood (vicinato globale). Global: with the use of internet I can feel myself close to a friend who is
living in another part of the world. There is a complex connectivity from a social and personal point of view
in which social/spatial/temporal space disappears. We are part of the local networks but also of the global
networks. There are a lot of global brands that are increasing the importance that they have in people live
(Starbucks, Apple). These global brands are inserted into local context/places, you can find global signs in
poor countries, and it means that the global signs and values re-contextualize the local. This often results in
the scomposition/fragmentation of traditionally embedded (incorporato) social local networks (very
important concept!!!!!).

NON LO CHIEDE ALLESAME

Facts and achievements (material sphere) are essential but also narratives and discourses (Foucault) matter.
Globalization is also based on narratives and discourses. Narratives are a particular way of constructing
vision and perception of live. WB, WTO argues that globalization is a perfect process (even if we know that
it is not true). This kind of narratives (globalization is always good etc.) play the basic role in facts and
achievements. And today? NO, we are renegotiation globalization. We dont have a narrative globalization.
This position maybe is influenced by the situation we are living in the western countries but if you think
about the emerging countries, they can express a better vision of globalization. Always facts and
achievement are very much interrelated with narratives (the way in which we explain and justify how the
globalization is going on) and narratives usually are not impartial.

THE ECONOMY OF KNOWLEDGE IS NOT A GLOBAL PHENOMENA YET

Manufacturing and tourism are everywhere, services and activities are everywhere. The knowledge (the
driving force of competitiveness) is not global phenomena yet. The economy of knowledge is even today
very much concentrated on the traditional powers of international economies and policies. The economy of
knowledge that is the new activity that is able to develop new centrality from the geographical point of
view (the capacity to exert (esercitare) influence at various spatial scales). A place is in a central position
when it is able to dominate the economic, financial, cultural process at various scales. So we have a world
where manufactural activity is in the process of decentralization (everywhere) but at the same time R&D,
high quality services etc. still remain concentrated in some urban regions. Today we speak about new
centrality: a place is in a central position when it is able to manipulate the economic and political process.
There are three main different dimensions of relevant: R&D, technology, scientific and technological poles
are the most important areas for the making of the economic world system; second point, these activities
are the real unchain behind the urban regeneration (during 80s and 90s most of the large metropolitan
areas suffer very much from the effects of decentralization, these areas lost population and economic
activities and the economic knowledge is the most important driver for the changing of these areas);
knowledge is an important industrial sector, it provides a lot of jobs and new opportunities to regenerate
and change.
So knowledge of economy has mainly three important dimensions: Knowledge means competitiveness, it
means regeneration of economic landscape, it is an industrial sector important in term of jobs provide.
Culture and Knowledge are agents of change. How can we measure this? We have only some proxy to
measure culture and knowledge: patents, R&D jobs, expenditure in % GDP, high geographical difference.
Even if these are proxy, we can realize that there are still geographic differences between the different
regions in the world. Still today US, Japan etc. are the most important countries for culture and Knowledge.
China and India are progressively and very rapidly reducing the gap with the other important countries as
US, Japan etc.

HOW CAN WE REPRESENT THE GLOBALIZED WORLD?

The past literature cant represent anymore the world. Globalization is a system that is changing completely
the economic system. If these models are not able to represent the todays world, how can we represent
it? What are the instruments that we can adopt to explain the complexity of the today economic system?
The globalized world can be representing as a network. Network is the paradigm. From the geographical
point of view we consider network like a spatial structure that connects group and regions from different
culture. Notes are localized geographical entities, is what we named as the local (cities, metropolitan
regions, districts but never a county or nation states). Relation between different cities and notes with
reference to financial products (I can transfer an amount of money just with the computer and internet).
But also relations characterize by human mobility, people that move and change place. Who are these
people? Tourists, scientists, academics, researchers but also migrants from poor countries. Cooperation is
another type of relation: transport and cultural exchange. Manuel Castells (urban sociology) argues that the
network is the new paradigm of how economy works, of how societies change. It is a very simple definition
but with very relevant implications. Within this global network, key actors are not nation-states but local
places (cities, urban districts and regions). This does not mean that the nation states have not an important
role. The states are not the key actors in the formation of networks but they continue to have a basic role
in providing the conditions to become part of these networks, they facilitate local places to became part of
this networks (for example, reforming job system, system of university, reforming the high-tech
technologies). The key actors are cities and city-regions, this is a vision close to the hyperglobalist approach
but this statement is share also by the transformationalists. There is an important book The metropolitan
revolution (by Bruce Katz) that shows how today the political and economic power is concentrate above
all in the main cities. What is the different from cities and city-regions? For example in Veneto is not
possible to show where the city finish, on the contrary the city is Paris and the city-region is le-de-France. A
place, a district can be part of a well-connected network even if it is part of a poor and/or peripheral
country, can be a very active actor. The definition of network is very easy but the consequences are very
complex. There are very dynamic nodes even in poor countries; it is the reason why the Risiko-model is no
longer functioning. Example of Angola: Angola is one of the purest countries in the world. According to
FAO, and other UN organizations if you are a child in Angola you are very unlucky because the expectation
for your life is very short. Angola is at the same level of Somalia. We have a very poor county which are
attracting more and more foreign direct investments (IDE) particularly in the oil sector and particularly from
China. So in Angola you have very important and active nodes, local places, which are very well
interconnected within the global and technological financial network related with the oil sector. But they
are completely segregated from the rest of the countries. So these nodes, that are extremely important
from the economic and financial point of view, are not related with the condition of national economy.
The network works with a bannering logic: you are in or out. The important of physical distance is not so
relevant, distance matters if you are outside the network. The network is the most important paradigm to
representing globalize world. A key actor, the most important one, is the multinational firm. Beyond the
concept of multinational firms there is the concept of foreign direct investments. Who is the country that
origin thee high level of IDE? US. Who is the country who attracts the most IDE? Still today it is US is the
country who attracts more foreign direct investments. The second one is China. Even the geography of
flows has an impact on the flow direct investment.

OBOR - ONE BELT, ONE ROAD

This is a very huge program of investments. What are the main characteristics of the project? It reflects
how the Foreign Chinese policy is changing in these years. Foreign Chinese policies are very reluctant. China
had to be very careful in giving the idea that it is try to change the world order (low profile). These years
show very well that the situation is change very much. First characteristic: assertivity (assertivit) that
means to defend the national interest wherever it is necessary (to adopt more proactive foreign policies).
Second: this project confirms that China is tried to improve her control the maritime power (China is always
be considered as a continental empire). Third: this mega-project shows how China is becoming a key-player
in the maritime empire. Until now the key-player was Japan but also USA. Through this project, China is
attempting to increase its economic and geopolitical role in East Asia. Many scholars argue that this project
is a sort of smokescreen used by the Chinese government to hide the most important goal that China wants
to attempt: increase the military capacity of China in the Indian Ocean and in the southern Chinese sea. So
for many scholars the commercial purpose (scopo) tends to take away the attention to what is the real
purpose, a military purpose. From the Xi Jinping speech: harmony is a very famous word in the Chinese
policy, it is an ideological issue from Confucianism. In this empty space in ideological terms, the
rediscovering of neo-Confucianism an important element for bringing people together. Respect the others
countries choices are the basic statement. It is up to you to decide what kind of development is more
appropriated to your personal situation. Beijing consensus: they spend a lot of money for other countries
without being involved in the internal political organization. This position is very different from the
Washington consensus by USA. Chinese are more pragmatic, the more important is the Article 1, I give
you the money but you cant argue the Taiwan issues, Taiwan is part of China. Business is business for
China. New Silk Road Fund was established in the 2014 with 40 billion US$. It was supported by the Asian
Infrastructure and Investment Bank. What is his role? This is the Chinese answer to the need of changing
the balance of power. Since the role of china is not so relevant for the World Bank, China established
another Investment Bank. Only USA and Japan opposed the idea of this Bank. Also a new bank (BRICS
Development Bank) is supporting this project. There is a vacuum in Africa from the western countries and
China is completing this gap. Strait of Malacca: the most important geopolitical point for china. From the Xi
Jinpings second speech, 2nd October 2013: it seems that today the most important supporter of the free
market is China. China has a leading role as a support of globalization. We can build the future according to
the past.

19/10/2017
OBOR - TO BE CONTINUED
Strait of Malacca is very important for oils importation in China. The project involved investment in
transportation and in maritime transportation in the Indian Ocean, South East Asia, Africa, Egypt area, in
Greek and Adriatic sea. There are also historical elements: several travels that Zheng He made (the Chinese
Marco Polo). These travels prove that China can build the future upon the past. China is doing nothing but
regained the important steps who did before in the past. There are six economical corridors: China is
setting up tens of new special economic zones in these corridors. These corridors are not only a way to
transport but they are a way of restructuring of the total manufacturing sector of China. China is realizing
tens of economic zones. Railway infrastructure in the Eurasia: this connects Chonging to the central Europe
(Duisburg). EURASIA, an idea started in the 1900 century when the development of transportation made
possible to think to the opportunity to have a very large single market. China through this problem is paying
more attention to what append in the maritime sector. Alfred Mahan an important geopolitics scholar: the
sea is the most important way to communication. Navy assets play a very important rule. Continental
power (Russia with a very poor navy, China for many centuries) versus Maritain power (UK, Japan and US).
China with this project wants to increase its maritime power. In US and Japan there are many scholars that
argue that this emphasis played by China is a smokescreen (copertura) that tends to hide the real goal of
Chinese empire. How does the Chinese government see this kind of arguments? This project is criticized by
many Chinese scholars. When we talk about one belt one road, the most important chokepoints (blocco,
congestione) are Strait of Malacca, Bab el-Mandab and the Suez Canal. If China wants to increase his roads
in the world geopolitic system, China has to think how control these chokpoints. Most of the oil import and
the chinese export transit throught these areas and chokpoints. Where the chinese government is investing
(slide 17). Rotterdam is one of the most important transport infrastracture which is involved in this kind of
vision. (slide 19). How can China overcam the problems imposed by the transit throught the strait of
Malacca? (slide 15) All these crisis have an impediated impact on the possbility to use for china the strait of
Malacca. It is essential to find differents roads, transport corridors. Where? In Bangladesh and in Birmania
(Burma, Myamar). The general idea is to relized new port that alloud China to import oli with out the strait
of Malacca. Another way is to realized a new channel in Tailandia. The China-Myamar energy corridor (slide
20): there are some ports. China is investing so much in these projects: go west, the most dynamic areasr
are in the easter cost of the coountries. There is also a political reason for that (not only the economical
one): china need to relocated the economic activites. It is a political tool aim to reduce the internal political
and etnic conflicts. Kra canal: this project has not being materialized and even in the fucture. Why? The
political internal context in Thailand is very much fragmentated in the few years, for her it is extremely
difficult to progress because the enviromental concernes, finally the US are strongly stopping these project.
Gwadar, Hambantoba and Chittagon (slide 21): these investmens are not materialized. Gibuti (slide 22): the
most important foreign investiment of china within these vesion. In this area there are military
investiments and new expantion project are living. A global power as China has to control the bab-mandab
strait because it is an important area for oil and transportation. This area is important for enter in the
foreing important investiments in Africa. Gibuti is a getway for the chinas investiment, the second one is in
Tanzania. There is a problem of pirates, a dinamic force who is moving the context in this area. (slide 23)
show the level of progress of these projects: countries important to China, countries receptive to OBOR,
concrete pojects subsumed under OBOR. The balcan corridor (slide 24): there is a competition between the
balcan corridor and adriatic corridor. At the moment the balcan corridor is gaining more political support.
The basis for these porjects is the port of Pireas in Greece. The Chinese government is spending a lot of
money in the mediterraneas ports. China is trying to organize a rainway corridor. There is a very important
struggle because the greece government has attempted to make a sort of competition between China and
Russia. What is the main entrace for Russian in Mediterranean sea? For Syria. (slide 25) only few examples
of the establish transport corridors within the one belt one road vision: Leipzig Shenyang, Linea
Yuxinou(Duisburg - Chongqing), Trans Eurasia Express (Hamburg -Zhengzhou), Hamburg Harbin and
Nurnberg-Chengdu. Is it sustainable for chinese finance? Yes because China has a lot of money. Many east
asia countries are worried for the increasing role of china in these area. There is not a single european
vision, each countries are trying to do the best but there is not coesion.

BACK TO GLOBALIZATION AND THE NEW ECONOMIC GEOGRAPHY

How can we represent and explain the complexity of the globalized world? Complexity means that we cant
speak about developed world and under developed world because globalization means the failure of the
risiko world. Today the network paradigm is the most effect way for addressing this kind of complexity, and
we have to define networks as the spatial structures that connects nodes through relations. The most
important points is what is the node and which kind of relations. When we speak about nodes we refer to
the concept of local but never to nation states. When we talk about relations we refer to different kind of
relations. The network is the new paradigm of how economic works and of how society change (Manuel
Castells). We have just pointed out the central elements: in the network the key actor are not the national
states but the local (cities, cities regions etc). A node can be part of the well connected network even if it
belongs to a poor and/or periferl countires. Another important aspect is the complexity of the relationships
between nodes and national economies and finally the importance of the bundary (confine) logic.
When we talk about networks we have to answer to the question: who are the main actors in the definition
of local networks? We have already mention cities and cities regions; however, from an economic point of
view, the main actors are the multinational firms. We know very well that there are different forms of
development. It is no longer possible to say that small firms are not marginal in the development. European
economy is based above all on small firms. Economic world is built upon diversity. Multinational and global
firms remain the heart of contemporary economy. What are the countries which atrtacted a very important
amoung of foreing direct investiments? China, Cekia, Romania. The most important country remains above
all US, in orginiated and to attract foreing investiments. It is clear that the multinational phenomenon is
built upon the foreign direct investments. What is the most importnt evidence that conferm very well the
importance of multinational firms? The evidence is that sales of good by subsidiaries in national markets
outnumber the valiue of exports: I can build a BMW in Berlin and sell it in Shangai (export). The overall
amount of BMW sold in China and build in China outnumber the number of BMW build in Germany and
exported to China. What is multinational from the geographical point of view? A multinational firm from a
geographical prospective is a business that organizes, coordinates and manages activities in different
countries. In more technical terms, we speak of multinational firm when we have foreing direct investiment
that means an investment that aims (puntare) and controlling the 10% of the capital of the firm that we are
going to buy. So the first point is the coordination of a transnational chain. The second point is that
multinational firms are able to exploit the geographical differentiation in the location of production factors:
it means that a multinaitonal firm is able to locate the different segment that together define the
transnational chain in a way to maximase the geographical differentation in the location of production
sector. So if I have a sector of a chain that needs a lot of man power I will lokated this segment in a country
where there are a lot of employees with lower wages. If I have a segment that needs creactivity, I will
locate it in the cities where there are more artists, dsigners. Where ddo I put my head quarter? Where
there are advantages in term of fiscal regulation, for example. I locate the different segments in a way to
maximise the geographical differentiation of production sector. What are the most conditioning elements
for this kind of organization? How can the system work? Two elements: first element is technology in
transportation because goods have to move from one location to another. This is the reason why
containers are so important, without them globalization, as we know, would never existed. The second
element is the efficiency of the management system of information (IT), without internet this kind of chains
could not take place. The last element is the panoptical view, the capability to see at 360. If I need steel I
have to know where steel is cheaper. This view allows flexibility and a global prospective in approaching
markets. Turnovers of many multinational firms are much higher than GDP of other countries. (Turnover
Walmart > GDP Poland) This kind of statistics can change according to the indicators that you consider.

What were the most important factors that supported the development of multinational firms? First the
USs production system since the end of the WWII was a key driver, particularly with the Marshall Plan and
during the 50s with its capitalism. It is important to stress this point because in the first decades of the last
century the largest multinational firms were European (France, UK, Germany, etc.) in the sector of raw
materials. Only after the WWII the large firms became in US. At the beginning of the last century because of
colonialism, the most important multinational firms were European. After the end of the WWII, very large
North American multinational took the lead in these sectors. These firms were so big that they started to
invest outside the country. The second point is the governance architecture that was designed in the
conference of Bretton Woods. Also the World Bank with the official development assistance program (ODA)
plays an important role in opening new markets. Technological innovation is another key driver: technology
is always and everywhere a fundamental factor for explaining the restructuring of economies at different
levels. Where did we see the effects of technology? Standardisation of processes and of products; it was
important because give the possibility to locate the production chains everywhere in the world.
Standardization doesnt required high quality of men power. Only if we are able to manage more complex
transnational chain you can invest outside with an efficient system of transportation and IT. Another very
important driver that contributed to the spread of the firms was the green revolution. It was a very
important process of restructuring of agricultural sector in less develops countries. The main actors beyond
this revolution were international organization, like FAO, and the system of multinational firms that
operated in the field of chemistry, distribution logistics and bioengineering. The main goals of the green
revolution where to fight hunger and malnutrition, through the introduction of new seeds (example gold
rice, type of rice and much more productive and more resistant to chemical artificial products) and to make
the less develop countries enter the international market of commodities. This meant to live behind the
subsistence agriculture. What did this revolution consist of? It consists above all in a large use of chemicals,
introduction of new seeds, and adoption of more modern production techniques. Did it succeed? Yes in
some countries. The revolution had positive consequences in many Asia countries while it often failed in
Africa and Latino America. The revolution had also negative consequences regarding the environment and
society (social aspects). Environment: we have to call it the brown revolution in term of public health.
Social implication: remember we are talking about green revolution related to multinational firms; all the
elements like new seeds, large use of chemicals, they have a dramatic increase productivity in agriculture of
rural areas; and this increase caused new internal migration flows towards expanding cities. Many people
were redundant; many farmers no longer were needed in the production: unemployment in few words.
These unemployed people started to move towards cities and contributed to create a sort of reserve of
cheap labour supply that became more important for the relocation of multinational from western
countries, Japan as well, to these areas.
Free zone is another distinguishing element that helps to represent the develop process in the
multinational firms process. Far East and south East Asia represent the most important geographical areas.
Zhanjiang was important for US multinational firms as Apple. But not only Asia: we experienced the
phenomenon of special economic zone also in other areas. For example the maquiladoras started much
closed to the border between Mexico and US. This SEZ provided many advantages to the largest
multinational firm of North America in terms of regulations, duties etc. The effects of maquiladoras were
very important during the 90s this program had a lot of successes but in the first decades of the present
century the situation change completely because most of the firms that previously had found a seat in
these areas then moved to east Asian countries (China). Also in Europe we have example of special
economic zones. For example in Poland, they have the right to operate until 2026. But also Kazakhstan is
developing a very aggressing marketing strategy in order to attract the multinational firms in different field.
In Kazakhstan there are different special economic zones (SEZ) for every different setting.

20/10/17
The basic approach considers the international system based on national economies. In such a contest we
could talk about South and North, first and second world. The development of multinational firms produces
the new international division of labour. It is characterized by the spreading of transnational chains and the
disintegration of national production chain. Productive and service chains have become more complex and
a great importance is playing by logistic. We have a great integration between local nodes within global
networks. Multinational firms are key drivers on the restructuring of the global networks. In particular,
because of the green development, we had a basic transformation form a world economic system based on
international relations to a global system that is based on transnational relations. It means that nation
states cannot be considered today as the main term of reference of the word economy. Peripheral nation
states become now more and more central. New drivers for what we call centrality. Centrality is a very
complex concept: it is the capacity to order, to make thing changing at a variety of special scale. London is a
key element as a centre in the global system; the same is for New York. There are different levels of
centrality, there are new drivers for centrality, not more related to manufactory but to IT, R&D, knowledge
economy, science, etc. it is a very important aspect to remember that we are living in a world which
connect the local scale. When we talk about the production system we have to refer to two different
dimensions: global (It means to consider how international chain is built with subcontracting initiative;
international supply relationships and subcontracting) and regional (increasing importance of clusters of
activity, local or regional industrial concentration based on the concept of cluster. The principle of economy
of agglomeration is of basic importance, builds clusters of activity so the most important characteristics are
the industrial, local values, regulation).

(Slide 32) Where is the Value Added of an American automobile generated? Only 35% is generated in
USA and Mexico, but only production and R&D. South Korea has a very efficient system of assembly of
components.

When we talk about the governances, how this transnational chains evolve we have to consider three
different scales:
the global scale is important for the shaping of this transnational chain (contribute to define how
the global system is evolving, what these actors decide is very important for understanding how the
global system change);
State, Germany and Italy for example, or regional blocks scale, for European Union for example (the
role of the states on managing national economies is decreasing; the role of the state in the
regulation of economy is changing. The states still maintain important economic functions; they
play an important role in the shaping of transnational chains. How? With national policies that
provide fiscal incentives, national policies that affect the labour market, can decide to make the
environmental regulation more or less severe, remains important in term of planning of
transportation infrastructure, public administration (PA) is something who is under control of states
etc.);
Local-region scale (we refer to city, metropolitan areas. The most important things are the quality
of local resources, social capital, local values, and local social networks.)
We can try to make an example, if I am the general manager of a North American firm and I have to decide
to open a new production plant in two different places, what makes me decide it is the global level. Assume
that this firm decide to invest in EU, but where? According to the policies quality, the investor decides to
put his money in a country instead of in another (regional block). If the investor decides to invest in Italy, ok
but Where in Italy? It is a local-region decision. These three different levels are interconnected in shaping
how the transnational chains are built.

Referring to the panoptical view, multinational firms are very flexible thanks to this. This issue raises a
question. What is the relationship that multinational firms establish with the national economies? Can we
said that multinational firms is embedded in the contest or they are footloose (they can change country
freely)? We can answer with the trans-nationality index which is composed by the average of 3 others
indexes:
- The first one is the percentage of foreign turnover on overall turnover (if this index is close to 1, it
means that this firm is very much orientated toward international market);
- The second works in the same way but it refers to investments (how many are abroad on the
overall firms investments? and how many in the national economies?);
- The third is referring to employment (if we have 100 jobs, how many are abroad? And how many in
the national economy? If our index is very close to 1, it means that this firm is very much related to
the international dimension.)

We make an average, for instance, the first turnover can be 60% and the second 50% and the third
one 40%, the transnational index is 50% or 0.5; if we take the 100 largest multinational firms
operating in the industrial sector, we see that some of the 100 largest firms have values above 80%,
this means that they are very much related with the international dimension, so the role that the
domestic market plays for these firms is very low. These firms are typically the firms that are
located in very small national markets. The most interesting thing is that about 40% of this 100
largest firms have the transnational index under the 50% so for them national market is the most
important market in their activity.

Why multinational firms, even if they have a panoptical approach to the global market, remain embedded
(incastrato) to the national system in which they have grown and develop? Two main reasons: economic
and social factors and there are also cultural elements that are important. The domestic market, the
national economy remains important for a very simple reason: it is a very well develop market, it is a rich
market because multinational firms have developed above all (pi di tutto) in the richest country. Germany
remains a very important market for German firms because Germany is a very rich country. The second
element is related to the national cultural system of doing business. National contexts have his own history
and firms have grown and developed in this cultural business environment, it is a sort of imprinting (= how
we develop is much more related to our family). For this reason the Ohmae approach is completely wrong.
The wrong part is when he argued that we were witnessing a process of convergence at the international
level towards only one system of capitalism, he argued that with the increasing difficulty of the communist
block in facing the international competition, there was only one possible economic system (capitalist) and
political system (liberalism). We dont have one capitalism only, think for example to the capitalism in Japan
that is completely different to the US capitalism; there are a lot of different capitalisms. National context
still matters.
Geography of multinational firms: there are 82.000 multinational firms, most of them are in the richest
countries; most of them are in EU. Why? Because if I invest in France, I am a multinational firm but if I
invest in California, I am not a multinational firm. Also the emerging countries start to play an important
role. The Caribbean is very important because there is a system of small countries, an offshore paradise
(think about Panama papers). But multinational firms in emerging countries are a very concentrated
phenomenon: for example in Africa all firms are in the South Africa, in Asia firms are only in China, Honk
Kong, and Taiwan. Far East and South East Asia have attracted a lot of foreign direct investment to the last
few decades. The decentralization plays an important role. At the very early stage of this process, the most
important role was play by the standardize product and processes. What shift from the traditional core of
the industrial geography to emerging countries was the most banal industrial sector. Later on, in a second
stage, what happen was a process of regional integration. At the very beginning the deconcentrating
process involved the most banal industrial sectors, but later on these moved to other Asia countries (From
China to Vietnam and Laos). The FDI, at first went to Shanghai, Honk Kong, in the second period the moved
to other countries in East Asia or other regions in China. The states are very important in providing
incentives that play an important role in attract multinational firms, we can speak of entrepreneurial states.
Today these areas are becoming very important also for high quality activities (in the field of industry,
transport and logistic) and these elements are well evident when we consider the investments made by
Chinese firms particularly in Europe. We have also new waves of concentration processes that are
originating within the regional scale. When we consider the reasons of this dramatic change in the world
economy there are two opposing explanations: first is the consideration that this success depended above
all on Effectiveness of Governments policies; the second based on the concept of marriage the idea is that
the success of China depended above all on the links between cultural specificity (The family in China is an
institution from every point of view; concept of meritocracy: Chinese dont fight because some people earn
more money because they think that they deserve; concept of competition as a value, they struggle very
much if they dont entre in the best university; authority and paternalism, many Asian governments are
based on this mix; scolarity, everybody have a very level of instruction. Another reason because, for
example, China is better than India. Why? India is a mosaic, a very complex system of different religious
and so on and this play the main role to make China better than India) and market logics (which is driven by
western multinational firm). The link between cultural specificity and market logic is the main reason
beyond the success of China in attracting FDI. The low labour cost, the week environmental regulation play
an important role but we dont have to underestimate this aspect because there are so many countries
where the labour cost is low even if they dont succeed like China did.

We can try to sum up the elements that play an important role in making so successful the Chinese
experience: the great amount of ATE (official development assistance programs coming from western
countries and Japan); the flows of foreign direct investments in the production system in manufacturing,
particularly from North America and multinational firms, and in transport infrastructure from Japanese
multinational firms.

Internationalization, points: product in a country and the export in another; multinational choices that
means to invest in a foreign country, building a new plan or promoting; establish joint ventures and
strategic networks, most of them are not formally define. The multinational choice is the most important
form of internationalization in recent time; entrepreneurial based approach in the state action (the
effectiveness of national government policies based on incentives, authoritarianism, protectionism and
efficient bureaucracy).
FDI: FOREIGN DIRECT INVESTMENTS
There are three ways to internationalized:
1. Export products (BMW example)
2. FDI and multinational choices (invest in foreign countries, building new plants etc.); it is being the
most important form of internationalization in recent times.
3. Establish joint ventures and strategic networks (We are not able to have a clear picture of the
geography of joint ventures and strategic networks because most of them are not formally
defined.)

When can we talk about foreign direct investment? When a company has a long-term interest in a foreign
business; when a company has the 10% of the rights to vote or of the capital asset of the firm. There are
different ways of classifying FDI:
Mergers and acquisitions;
Investment building up new plants, which implies to have more jobs and money;
The acquisitions and take over privatisation process (very common after the collapse of the Berlin
Wall because many western countries started to contributed to the privatization process of many
formerly state-owned firms). When we talk about utilities (the companies that operate in the field
of public services)

Also in emerging economies such as the Far East economies or China economies, foreign direct investment
directed towards the service sector. The percentage of these FDI is still important only for Russia. This is the
most important classification of FDI on a geographical perspective: horizontal or vertical FDI. The vertical
one are the more traditional form of investment abroad, the horizontal are the most relevant from a
qualitative point of view.

Vertical:
Resources Seeking - when we have invest in strategic inputs, for example the oil sector or
agricultural sector (China and middle east countries); they have very often few positive economic
effects to the country that receive the amount of money (resources curse, there are countries that
have plenty of resources but remain very poor)
Efficiency seeking the investments that are directed to places with low labour costs, more
efficiency from a geographical point of view such as location to sell in some products

Horizontal:
Market seeking - to build up or to buy abroad a plant for entering in the local market; the FDI is not
related with the efficiency, the main logic is I invest my money because I want to be in that market;
these kind of investment is related to the possibility to have better knowledge of the local and
national market but it is relate also with the benefits that I can gain investing in that market;
Strategic asset-seeking it is made to improve the competitive position of the firm in a given
market (a game of competition) or in an expanding markets strategy; the receiving country can be
consider like a gateway to entry in another country (If you want to invest in North Korea it is better
if you invest before in China)

BACK RESHORING?
There is a sort of debate that something is changing and there are many evidences that international firms
are retiring (back reshoring). This phenomenon involved above all the countries that were more involved in
the past decades in the offshoring process. North American and European firms are adopting a back
reshoring behaviour. What are the countries more involved? China plays the leading role, then Asia, etc.
The increasing of the labour costs is not only the main reason for these investments. We are disinvesting
because of the flexibility and the quality.

FDI ORIGINS
USA, UK, France, Germany, Japan are still the most important players. More recently, Hong Kong, South
Korea and China are becoming very good players. The new Silk Road project is one of the most important
investment framework of this period. Horizontal (market seeking or strategic asset seeking) FDI build
horizontal network; Vertical FDI build vertical networks. The first is a network characterized by bilateral
flows and symmetric flows. When we speak about horizontal direct investments, they are symmetric (I
create a certain amount of flow originated from that is equal by a flow of investment that is coming; so I
also receive at the same time the same flow of investment from another country) and bi-lateral. The same
does not occur in the case of vertical FDI, they are not bi-lateral and they are very much asymmetric. This
flows are above all originated in the richest countries and directed to the emerging or less develop
countries but there is not the vice versa. Here history, colonialism and geographical proximity play an
important role: from north to south (USA South America; Europe Africa; Japan South East Asia).

There are many regulations that help to organize this kind of flow FDI. FDI are not simply the result of
multinational firm strategy. FDI depend very much on the regulation framework. The global level
(organization such as WTO or World Bank) provides the conditions that enable FDI to increase and to
spread. What we call the free market its actually a political constriction. There are some actors that
provide the conditions that allow the free market to function and develop. The free market is politically
built by these agreements and regarding to FDI the most important agreement are of two different types:
BIT-Bilateral investment treats (treaty between two different countries that provides the conditions for the
investment but we need to be sure that our money is safe in an emerging market for example); DTT-double
taxation treats (treats whose goal is to avoid the double taxation in the countries where the FDI is
originated and in the countries where the FDI is directed). In which case we can speak about BIT, horizontal
or vertical flow of FDI? The vertical because the vertical flows are originated in the well develop countries
which want to invest in the less develop countries so they need a sort of legal security. For example, if
North Korea collapses form the political point of view and a new market born, we have a lot of vertical FDI
coming from the developed countries to North Korea. In order to provide a good condition for the
investments, Italian firms need a clear legal framework. In which case we can speak about DTT, horizontal
or vertical flow of FDI? Horizontal flows of FDI. If I am an Italian firm and I invest in USA, I need DTT
agreement. The geography of these international treaties follows the international flow of the FDI.

INTERNATIONAL TRADE
Since the 50s international trade variation (VAR) in % has outnumber the variation of GNP in % (when
there are imports and exports that are part of the same system of firms). Services remain a major part of
the international trade and it is increasing very much (the most dynamic services sector are tourism,
transport& logistics, ITC services). We have to consider that in the case of services the multinational choice
is prevalent, the consumers like it more. The very important aspect is that within the system of
international trade semi-finish goods and intra-firm trade are playing the most important role, more than
the 50%. The international trade network is based on three pole structure: EU that remains the most
important world market, US, Japan and China (Asian Tiger). The trade patent is based on these three main
poles. Middle East is mainly an export pole. EU is the most important regional block for international trade.
There is a sort of symmetry between North America and Europe. EU export very much to North America
and import also very much from USA. The values are more or less the same. The same does not occur in the
relation between North America and Asia and EU and East Asia: both, EU and USA, import very much from
East Asia while export a very low level of goods to Asia. The most important direction in the international
trade flows is today the East Asia-European direction that has recently outnumber the values of
import/Export from North America-East Asia. This is the main reason why many scholars argue that the
Mediterranean Sea is becoming one of the most important seas for transportation. With the disintegration
of US deserve, Russia lost most of its economic power. With US deserve Russia was very well integrate with
economies such as Ukraine and so on. When the US deserve collapsed Russia started to lose weight in
international trade and the formally US reserve republic started to be more integrated with European
countries. And the role that today Russia is playing in the international trade network is above all
dependent on the exportation of raw material, oil and gas. The role of Russia is very poor, is a very week
role in sectors not related to the exploitation of raw materials. Recently, Russia is attempting to create a
new space of relationship and integration with the formally US reserve republic. Russia is promoting and
attempting to implement the EURASIA economic union. The general idea is to create a new empire space in
terms of economic and trade flows. The countries involved in this process are Russia, Kazakhstan, Valais
and Armenia. The poor south-south integration is the last point. What does it mean? In the international
trade network, the most important relations are the relationships that connect rich countries with poor
countries but there are very few relationships that connect different poor countries (South America and
Africa). This is the heritage of the colonial period.

26/10/2017
We have three main poles: Asia, EU and North America. European market is the most important market of
the world. Another element is the asymmetry that characterized the international trade with Asia, It export
very much to Europe but import less from it. Asia exports very much to North America but import less from
it. In the case between Europe and North America there is symmetry, exports and imports are more or less
the same. Another important point is the lacking of south-south relationships, there is not relationship with
Latino America and Africa. It means that the quantity of imports and exports is very low. The international
trade structure, regarding these countries, is mainly base on the North-South direction. This is the heritage
of the colonial period. In the last few years there is an increase international trade between Asia and Africa,
Asia and Latino America. The main actor is China.

GATT-WTO
GATT was established on 1947-48 in Genve composed by 23 countries. Within the WTO there are three
main agreements: The General agreement on tariffs and trade (GATT 2), General Agreement on trade in
Service (GATS, a novelty), Trade-related aspects of intellectual property rights (TRIPR). GATT and WTO
represent the basis of multilateralism; it has been the engine behind globalization, the increase of
imports/exports and of the FDI. There is another important point is regionalism (sceptical approach);
regionalism is the most important trend instead of globalization. It means more relations between
countries that belong to the same regional blocks. We can speak about regionalism when two or more
countries reduce tariffs and trade barriers among them; other countries are excluded; it is a discrimination
and distortion of competition. On the contrary, Multilateralism is to open international trade avoiding
distortion and discrimination.
There are mainly three different types of regionalism:
- North-north agreement (between countries that traditionally are considered part of the north)
- South-south agreement (MERCOSUR)
 - North-south agreement (is more recently, NAFTA)

What are the main reasons for the spreading of these regional agreements? When we talk about north-
north agreement the reason is to build a wider and stronger internal market, to increase the economic
scales, to foster interregional agglomeration, etc. South-South agreement, the reason is as the north-north
agreement but also political and cultural reasons and to protect the establishing industrial structure. South-
South agreement had very often failed. Why? Individualism: most of the south countries continued to
maintain a favour relation with countries belonging to the North. The most important aspect is the poor
economic complementary. Regionalism works well when the countries are different but when the countries
export all the same good how they can integrate their economy. In order to promote integration at the
regional scale, you need complementarity at the economic structure. Only if you have complementarity
means diversity from an economic point of view, you can promote effective strategies of regional
integration. The most important north-south agreements are the North American free trade agreement
(1993) and North agreement between USA and Israel which is considered being part of the south. Others
are the agreement between EU and Eastern European countries, when the Berlin Wall collapsed, and the
Mediterranean action plan between African and Mediterranean. North regional agreement cannot be
explained today with the attempt to reduce taxes charges because in regionalism these kinds of elements
are not important. The main reason that regionalism continued to be strong are: economies of scale,
integration, development of common policy in economic affairs and Clubs of countries (for developed
countries), for a geopolitical reason and for increasing their status and role in internal policies. It is a sort of
lobby. How can these approaches be harmonized? They are opposite: multilateralism is for all the
countries, regionalism is a form of discrimination in international trade. We have to consider that for
instance in 1957 GATT did not take a decision on EEC. But it is clear that GATT didnt like this kind of
approach because it crashes with multinationalism. Also USA has always opposed to the formation of
regional blocks. USA was in favour in the case of the EEC, two main reasons: a strong Europe against
communism during the cold war, to avoid the EECs exit option. The European common market can exit EEC
if USA opposed this regional agreement. A pragmatic approach has developed with the problem of the
coexistence of multilateralism and regionalism and this pragmatism was translated in an article of WTO,
number 24, special exceptions. WTO acknowledges that some countries for very special reasons can
promote regional approaches in international trade. So the main reasons for that are political rationality
and pragmatism. But there is also a theoretical perception: regionalism can be a step towards a phase of
globalization. There are two positions: regionalism is in opposition with the globalization and it represents
the most important trend that characterized contemporary economy (sceptical position); the idea that
regionalism can strengthen globalization processes. Is regionalism a step against globalization or in favour?
We dont know. The 60% of import and export of EU countries is among the EU, inside EU, and the only
40% is for Asia, North America and Africa. So regionalism in European system is a very strong reality. The
same is not true for Africa. So it is not possible to give just one answer.
There is another way of representing this problem: Archipelago. The general idea is that some countries
start a process of regional integration and they define what it call Island, from geographical and historical
reasons. They define sovra-national rules. Then it is possible to define a network of islands thanks to global
rules. Stronger island through regionalism is considered as a precondition for strengthening global flows.
Different types of regional agreements:
- Free trade area (an internal opening of economies, there is a reduction of customs duties but each
countries decides its own trade politics with external countries)
- Customs union (in the custom union you have the free trade area as the starting point and then
establish a common trade policy regarding international trade)
 - Common market (it is a custom union with free circulation of production factors, mainly labour)
- Economic union (stronger form of regionalism; it is a common market and a common economic,
fiscal and monetary policies)

We have three key elements that contribute to shaping the world economic system: Knowledge economy
and as we have already considered it means R&D, cultural industries, etc. This knowledge economy is
related with what is happen in cities. Globalization implies a dramatic increase in the capability to manage
and organize information flows. Globalization implies the management of logistic chains. The transnational
chains required an efficient logistic system. Cities are the real engine behind globalization. Cities are the
most important nodes of transportation, they are the heart of the capability of innovating ways of life, the
core of human mobility, and they are the basic node in the establishment of production and services
networks. New ideas, culture, cosmopolitanism, professionals and creativity, entrepreneurship, innovation:
all these elements are global fluency (the capability to manage global processes). Global fluency is based
on bricks (hard infrastructure) and clicks (related with the digital economy). Cities are also the places where
the problems are well evident. The most important problems are: environment (climate change), social
exclusion (cities are the place where global processes are more evident, there are a lot of inequalities even
in the richest cities) and mobility (cities can grasp the opportunity of globalize world only if they can
manage the mobility problem). Transport and logistics mean to decrease costs, pursue higher efficiency and
reliability, complicity of intermodal transport system. We have to consider the key role of maritime
transportation to explain globalization; in particular the role of gigantism for the transnational chain. The
maritime sector has made a strong restriction of jobs (they need only 15 people); these vessels (navi) are
too difficult to drive so they stop just in few ports. Ports have to make a very strong competition to attract
these kinds of vessels. The most important ports: port of Said and in the norther range of Europe. Our ports
are becoming part of transnational chains that belongs to multinational companies. There are a lots of East
Asia multinational companies that are buying Mediterranean ports. China and other countries are not only
important because the export very much but also because they are restructuring distribution and logistical
chains.

CONCLUSION
The traditional way of thinking how the international economic system is organized is completely
outmoded but we continue to represent the world with an old language. These aspects are the main
important elements that have contributed to make outmoded the concept of the wold: disintegration of
production chains and spreading of multinational/global firms, new economic geography related to
explosion of FDI originated from the south, the emerging of the network logic and the crisis of the concept
state-as-a-container. A very important point is that being a node of the network does not mean to be a rich
country (example of Angola). Globalization is not the end of the history and the end of geography. Diversity
matters and with the network logic history and geography are becoming more important. The acceleration
in the explosion of development paths and the variety of forms of contemporary capitalism are very
important statements for globalization. What kind of language we can adopt? Active, passive and marginal
areas can clarify the situation. Within the states border we have different areas. Even in the richest
countries we have these kinds of areas. Active areas are areas that lead globalization and generate FDI
because they are the location of multinational firms, because they are very dynamic. They are
characterizing by multiculturalism and they spend a lot in R&D. Passive area doesnt mean poor areas, it
means that they can benefit from the globalization but they dont leading it. Marginal and excluded areas
are the areas that are completely out from contemporary economic and financial trades, they do not
receive FDI and they not give FDI. This is the most effective language to represent our world, but our data
are very few able to represent a world organize in such a system. It relates with the fact that accountability
etc. is very much related with the traditional role of the state as based. The official statistics still are based
on national-data. This is a problem of old language.