The Last (5 th ) Kondratieff Wave AND FUTURE PROSPECTS PROFESSOR RODDY FOX RODDY.FOX@HV.SE 1
1949-1966: K4 Fordist mass production Highways, airports/airlines USA, Germany and other Europe, Japan, Switzerland, Sweden, Canada, Australia Spring phase innovations: Aerospace, electronics Now: K5 information and communication Digital networks, satellites, fibre optics Japan, USA, Germany and other Europe, Sweden, Taiwan, Korea, Canada, Australia Spring phase innovations: Digital networks, software, new media, bio-technologies 2
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Industrial Countries Post-industrial Countries Graphics from: http://foxedblog.wordpress.com/2012/08/21/beyond-economic-growth-ebook-fromthe-world-bank-group/ 5
6 eg. Sweden eg. South Africa eg. Mozambique Industrializing Post-industrializing Graphics from: http://foxedblog.wordpress.com/2012/08/21/beyond-economic-growth-ebook-fromthe-world-bank-group/
7 Graphics from: http://foxedblog.wordpress.com/2012/08/21/beyond-economic-growth-ebook-fromthe-world-bank-group/
GLOBALIZATION & INTERNATIONAL TRADE Documentary Movie Inside Job highlights these Technological advances lowering costs Liberalization of trade and capital markets (de-regulation was the main topic of Inside Job) 8
This cartoon exposes the exploitation of labour in the era of globalization. Products shown from: Uzbekistan, California, China, DRCongo, Chile, Sierra Leone, India, Guatemala, Occupied West Bank (Palestine). http://leilaladomptable.wordpress.com/2012/01/10/im-so-happy-we-live-in-a-world-without-slavery-and-imperialism/ 9
Graphics from NewScientist s April 2002 The Great Globalisation Debate. 10
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LABOUR & MANUFACTURING PROCESSES New International Division of Labour as MNCs (multinational companies) have split and relocated the production process since 1960s, eg Textiles, Electronics, Automobiles MNCs benefit from cheap labour in peripheral or semi-peripheral countries (see cartoon) Technological advances in telecommunications MNCs can operate within regional and national trading zones or may use Export Processing Zones (EPZs) to re-export 12
AUTOMOBILE INDUSTRY: VERTICAL INTEGRATION Relatively Capital Intensive Body Parts Toolmaking Foundry Work Core or Semi- Periphery Component Production Engine and Transmission Either Labour or Capital Intensive Body Assembly Semi- Periphery or Relatively Labour Intensive Trim & Final Assembly 13 Periphery
14 EXAMPLE: KENYA VEHICLE MANUFACTURERS LTD Contract assembly at Thika, Kenya (up to 6,600 units per annum) Customer (Land Rover, Nissan) buys the imports and transports assembly kits (ie standard kits) Customer buys all special assembly tools (jigs) and local content KVM buys paint, fuel, oil, consumables and does assembly Customer gets access to East African Community Customs Union (Kenya, Uganda, Tanzania, Rwanda)
15 EXAMPLE: KENYA VEHICLE MANUFACTURERS LTD EAC is also a part of COMESA (Common Market for Eastern and Southern Africa) which has 20 member states and a population of over 400 million
World Economic Regions 16
FLEXIBLE PRODUCTION, DISTRIBUTION AND MARKETING Mass production & mass consumption from one plant to one national market (Fordism) has become replaced with neo-fordism Levels of output, process and product configurations are now much more flexible both within and between companies 17
Computer aided design and manufacturing replicate processes easily and speedily Information systems reduce need for stockpiles of raw materials, parts inventories and warehousing Sales and orders linked to small batch, just-intime and distribution systems 18
SELECTED TOYOTA AUTOMOBILE OPERATIONS (1991) IN ASIAN SEMI- PERIPHERAL AND PERIPHERAL COUNTRIES 19
EXPORT PROCESSING ZONES a relatively small, geographically separated area within a country, the purpose of which is to attract export-oriented industries, by offering them especially favorable investment and trade conditions as compared with the remainder of the host country. In particular, the EPZs provide for the importation of goods to be used in the production of exports on a bonded duty free basis. UNIDO (1980: 6) United Nations Industrial Development Organization (UNIDO). 1980. Export Processing Zones in Developing Countries. New York: United Nations. 20
EXPORT PROCESSING ZONES MNCs producing clothing, shoes, electronics Tariffs on import and re-export do not apply, limited bureaucracy, company tax breaks, infrastructure produced by home country, relaxed labour and environmental regulations 21
Said to enhance foreign exchange earnings, reduce poverty, stimulate regional economy 3000 EPZs in 116 countries, 43 million workers in 2002 Highly criticized, corruption in government, exploitation of labour (single females) company does not clean up environment (footloose), benefits business/government elites 22
Maquiladoras 23
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A Chinese Example 25
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SIXTH KONDRATIEFF? 27
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SIXTH KONDRATIEFF? NEW INNOVATIONS & NEW APPROACHES 30