Global Economic Restructuring

And Competitive Advantage

Noraniza Yusoff

2021

1st International Conference on Geography, Environment and Sustainability 2020 (ICoGES2020)

Tanjong Malim,Perak Darul Ridzuan, Malaysia, 11th-November 2020

School Of Government, UUM COLGIS, Universiti Utara Malaysia,

06010 UUM Sintok, Kedah Darul Aman
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ABSTRACT

Global economic restructuring is an important process for economic sustainability

through better occupation to produce new economic conditions. Global economic
change in the context of place and space will affects economic development. The global
financial crisis of the year 2008 has greatly changed global economic patterns that
produced significant industrial restructuring in all countries including new circle of
industrial adjustment, transfer, upgrading and adjustments in the modes of economic
advancement. This situation has changed the figure of international competition with
strong economic recoveries and evident enhancements of national competitiveness
through technical innovation to overcome the crisis. Global economic restructuring and
competitive advantage produce growing interdependence of countries economy and
influenced economic development as well as rapid industrial modernization. This
concept paper analyses on global economic restructuring and competitive advantage
which identified the removal restriction on capital, greater coordination, expansion of
markets and high value-added services.

Key Words: competitive advantage, economic geography, global, restructuring, spatial.

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Introduction

Throughout the previous two decades, global competition, goods unprofitability, and
surplus size in conventional industries have resulted regarding evident transformations
in the framework of the globe’s economy. Consequence to these transformations,
unions, corporations and governments have sought to formulate economic strategies
that expected maintain sufficient profits on investment, generate or sustain
occupations, and establish industries inside domestic territories. The year 1989 to 1990
seminar series held collectively practitioners to report on and deeply evaluate the
interdependence connections between technological transformation, economic
restructuring and industrial partnerships. Throughout the path of the project, three
primary challenges were assessed namely first, the scope to which employment
organization and market share or competitive situation are affected by technical
innovation. Second, the way the transformations are influenced by government
strategies. Third, the duties of collective bargaining association process. The answer
provided in these investigations are largely qualitative judgments for which the
examination of cross-nation experiences is of substantial value. The comparative
perspective permits researcher to examine the shapes that are different to specific
situations inside and among states as well as territories and the people that shape a
more universal band of associations. The respective duties of labor, management and
government are striving cooperatively to solve economic restructuring as well as
centered on collaborative attempts to extend and widen market share under more
varied, greater value-added as well as customized goods and the reorganization policies
 3

implemented to achieve these aims. The seminars dealt with organized manpower in
manufacturing industries (Sleigh, 1993).

Global economic restructuring is an important process for economic sustainability

through better occupation to produce new economic conditions. Global economic
change in the context of place and space will affects economic development (Nap.edu,
1997). The global financial crisis of the year 2008 has greatly changed global economic
patterns that produced significant industrial restructuring in all countries including new
circle of industrial adjustment, transfer, upgrading and adjustments in the modes of
economic advancement. This situation has changed the figure of international
competition with strong economic recoveries and evident enhancements of national
competitiveness through technical innovation to overcome the crisis (Li & Huang, 2013).
Global economic restructuring and competitive advantage produce growing
interdependence of countries economy and influenced economic development as well
as rapid industrial modernization. This concept paper analyses on global economic
restructuring and competitive advantage which identified the removal restriction on
capital, greater coordination, expansion of markets and high value-added services
(Nap.edu, 1997).
 4

Global Economic

The recent global economy of the twenty-first century has shifted the economic, social
educational and political context in a significant and permanent approach. This is
consisting of a three-way of repetitive forces that involve globalization, trade
liberalization and the information technology and communications extreme shift. The
duties and roles of entrepreneurship in the recent global economy have taken on further
significance and face combined questions. Human live in a challenging situation of fast
changing economic developments, because the private sector has established the most
important mechanism of economic development and the public sector has decreased in
importance and control. Entrepreneurs are defining the recent principles of engagement
on the economic situation has come to deals with modern questions and recent chances.
In this recent situation, entrepreneurs demand to formulate a pragmatic vision, exercise
effective leadership and grow a competent business policy. Entrepreneurs should
generate the linkages that expected permit to incorporate the interactive components
of the recent economy in order to raise competitive advantage. Business policy should
encompass flexibility, a quick response time and a proactive strategy to economic
chances (Passaris, 2020).

Globalization of markets is greatest represented in the internationalization of business

transactions. This means that one or more scopes of economic activity carries an
international attribute. One of the entities to the transaction possibly a foreign partner,
the transaction possibly includes a foreign currency, financing possibly include foreign
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lenders, and technology possibly come from a foreign partner, and so forth. A basic
influence of globalization of markets is the need to grow productive corporations with
other organizations at domestic level and abroad. The costs, complexities and risks
connected with business ventures drive companies toward corporation with partners.
Partners possibly involve overseas distributors or agents, contact manufacturers, trading
companies, cargo forwarders, and competitors. Partnerships are established to consider
linkages in all value-adding activities involving manufacturing, research and
development (R&D) as well as marketing (Cavusgil, 1993).

Presently the remaining of the world is competition to recover. Essentially each

important trading partner has declared innovation to be central to enhancing
productivity, economic development, and living standards. Trading partner adopting
ambitious, far-reaching and well-financed policies to attain that goal. Global movement
toward free markets in the year 1990s began regarded as the Washington Consensus,
the first 10 years of the 21st century has seen the emergence of matter could be
explained as the Innovation Consensus. Government worldwide have been considerably
enhancing investments in investigations and advancement, bringing universities and
domestic laboratories to commercialize technology, rising venture capital and
automation amenities for initiations, accumulating early-stage investment funds and
reforming tax codes to promote high-technology entrepreneurialism. These attempts
are backed by profound framework concentrate at the strongest level of governments
in Asia, Europe and Latin America. The innovation agendas and exact strategies distinct
from state to state, founded on domestic demands and aspirations. In several cases,
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governments are adopting strategies modelled after the United States Of America (USA).
In other countries, are adoption from successful paradigms pioneered in Europe and
East Asia that leaders as more responsive to the competitive realities of the 21st century
global economy. In that regard, other countries’ experiences offer valuable lessons for
policymakers in the USA federal government, regions and states. To better understand
global patterns in innovation strategies, the National Academies’ Board On Science,
Technology, and Economic Policy (STEP) conducted an extensive dialogue over the
previous few years to contrast and opposite strategies of several countries (The National
Academy Of Sciences Engineering Medicine, 2012).

There is emerging economic power in the first tier, China and India in several depth
outlined aspiring innovation agendas for rising living standards and moving well beyond
labor-intensive manufacturing and low-skill services to high-technology and knowledge-
intensive industries. China and India capitalizing big national markets and low-cost
workforces to attract foreign investment in next-tier industries and are advancing
globally competitive collaborations. China and India also are making strategic options
regarding technologies that solve national needs and in which are best positioned to
compete globally in the forthcoming. In the second tier are the more mature newly
industrialized economies, concentrate on Singapore and Taiwan, which have
extraordinarily well-educated inhabitants and have gained global standards in industries
for example high-tech electrics, biotechnology research, and chemicals. Singapore and
Taiwan are striving to grow innovation situations that expected permit Singapore and
Taiwan to rank among the globe’s richest countries and compete one-to-one with the
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West and Japan in next-generation industries. The third tier represents mature
industrialized countries, specific interest to Germany because of that countries’
capability to continue globally competitive in advanced manufacturing exports although
wages and other costs that are greater than in the USA. This tier also includes Japan,
Finland, Canada and the Flanders region of Belgium. Each of these countries has
redesigned domestic innovation policies in order to enhance R&D spending,
collaboration among industry and academia and recent technology initiations. The
policies and framework tool offer many valuable lessons for USA policymakers and
present a figure of the changing global context as USA prepares for 21st century
competition (The National Academy Of Sciences Engineering Medicine, 2012).

Global Economic Restructuring

Global economic restructuring related with global restructuring which Hurry (1993)
defined global restructuring as a process of strategic option that includes remarkable
selections on portfolio restructuring and refinancing. Global restructuring introduces the
concept of a three-dimensional restructuring profile to compare restructuring policies.
The first presumption associates the profile to transformations in global competition,
while subsequent presumption are interlinked in a logical pathway to investigate the
impact of strategic interconnections in relation to first, portfolio restructuring via
growing and planned policy processes. Second, financial restructuring and recent
linkages formation. Several researches of industrial restructuring and regional
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modification are centered on the local effects or factors of restructuring. Several

researches are centered on corporate policy, an important component for a good
knowledge of the motive forces behind restructuring. Three kinds of policies first
structure-dependent, second, structure-limited and third, structure-centered policies
(Clark, 1994).

This is a time of economic restructuring in the globe’s car industry and the impact on
individual countries and territories is intense. In the fast extent markets of Brazil, India
and China, there is extend of ability with recent plants being opened as local markets
develop on the back of enhancing domestic incomes. The trend in the conventional
markets of the West is there backward, with important contraction and even plant
closures by the conventional volume producers. The auto industry has experienced
important transformation since the introduction of assembly-line production and the so-
called “Golden Age” of capitalism. Over the previous four decades, transitions have
influenced the industry’s value change, from manufacturers and suppliers via to service
providers and dealers. Decreasing in trade obstacles have caused to cycles of investment
in emerging markets. The 10-fold expansion of production in China over the previous
decade and the fast development experienced in Brazil and India has so far been
connected with domestic consumption, from both domestic manufacturers and foreign
firms working. In the industry is not much globalization, as obviously regionalization
inside a global trend, consequently the original equipment manufacturers (OEMs) gather
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and design vehicles locally, close to the customer (Bailey, de Ruyter, Michie & Tyler,
2010).

The industry being dominated by big firms, with incremental and process-oriented
innovation. Risen market constraints have caused manufacturers to seek recent
segments, with the effect fragmentation of markets, with auto manufacturers offering
a greater number of body style variations supported by standardized “under-skin”
platforms. The questions experiencing the auto industry were clearly encountered by
the year 2007 until 2009 global financial crisis, which caused to a severe reduce in auto
product in several nations, to high-profile debts and takeover, and to a variety of
temporary framework interventions across states to support the industry, for example
via desires stimulus measures-with a later fall off in demand if such support ended. Along
with transformations in production techniques or technology and the ongoing
globalization of the economy, there has been the impact of the global financial crisis and
ongoing excess capacity in the sector. Forthcoming growth regarding the viability of the
sector expected indeed be fundamentally linked to this capability to a consequent
transition to recent consumption trends. There are questions over the way producers
and dealers capitalize on the desire of consumers to ‘stay connected’ in terms of being
networked, the way consumers shop for and design the cars, and the way demographics
and enhanced urban living expected impact on demand. Latest, with more people living
in urban spaces, patterns like cars sharing possibly grow, as a quasi-public transport
mode, making manufacturers think regarding matter offer consumers in terms of
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mobility services rather than car ownership certainly (Bailey, de Ruyter, Michie & Tyler,
2010).

Policies as an important aspect of industrial restructuring. The notion of policy has been
generally underdeveloped in several of the geographical publication on restructuring. A
scope of context that are important in capturing the characteristic of policy rationality,
consciousness, level of analysis, power, contingency, individual compared collective
action and relationship with structure. A mutual concept which involves ‘deliberate’ and
‘emergent’ policy assists in capturing the complexities of restructuring initiatives and
effective implementation of restructuring strategies. Labor management partnerships
and corporate policy are used as vehicles for discussing these basic concepts (McGrath-
Camp, 1999).

Competitive Advantage

Most theories have been set to explain competitive advantage and the elements. One
significant context of competitiveness is originated from people. People are frequently
a manifestation of education and culture. Consequently, these two domains should be
taken into account as main sources of international competitiveness (Moon, 1999).
There has been a transition in the characteristic of competition in both Sweden and
Australia because of an enhancing complexity of the global business situation as well as
transformations in technology and customer expectations. Although the dissimilarities
 11

in state aspect, the findings propose that all the manufacturing companies have a good
awareness of the components of the market situations and the associations with
competitive policy. Nevertheless, generally the Swedish companies have more facing of
managing the disadvantages and benefits from working in the international situations.
In most of the Swedish case companies, as a part of continuous improvement programs,
manufacturing and testing capabilities have been enhanced. The tools inside the Toyota
Production System (TPS) have also been exercised, which resulted in enhanced labor
productivity and production effectiveness. Company SW-D exemplified this pattern.
Automation levels in these companies have enhanced throughout this time. The driver
for lower cost has enhanced the level of automation and reduced the craftsmanship
element (Soosay, Nunes, Bennett, Sohal, Jabar & Winroth, 2016).

Throughout the passage of time, process technology assisted in rising the standard of
the good, which caused in enhanced customer value. Nevertheless, basic processes in
SW-D continued the similar as in the year 1980. The fundamental or essence goods are
also the similar, however several transformations in ability and standards have been
made in order to fulfil present market need. Delivery performance was not significant in
the 1980s, however because of competition in the market, this is stronger presently to
deliver the right quantity, on time, to the right location, and at the right quality. There
are many questions for all the Swedish companies. For example, this was stated in all
case that there was a continuous demand for cost reduction in a high-skilled and mass
customization situation, which in the case of automotive production has driven a
transition in competition towards Asia, causing in strong questions for Swedish industry
 12

from international competitors. There is consequently a demand to sustain economies

of scale and decreasing in costs. Since the research, Company SW-H has transferred to
this constraint and closed every full volume production of automobiles. After another
transformation of ownership, this subsequently announced plan to broaden into the
design and manufacture of electric vehicles (Soosay, Nunes, Bennett, Sohal, Jabar &
Winroth, 2016).

Competition, innovation and globalization are concepts which for a several years have
been present in almost each context of social or economic activity. In particular, the
rising attention in questions connected with the competitiveness has contributed to the
growth of theories and studies in the context of the competition examination and the
competition policies. Researches concerning the subject of strategic management assign
a considerable focus on the questions regarding the competitive advantage as a cause
determining the success or failure of organizations or countries. A focus is set on the
necessity to stand out against competitors or to build a long-term sustainable
competitive advantage (Soloducho-Pelc, 2014).

As economic parties are working in the global market, there is inadequate great quality
goods that fulfil consumers’ demands. This is important that the goods which produce
and management would be not only consistent with the economy, however also would
serve for the desires of customers and community as a whole, to prevent internal and
external challenges hindering with social living, or would be in different to accepted
norms and good lifestyle. Attaining competitive advantage in the global market is not
 13

adequate to possess a competitive advantage, this needs an in-depth understanding of

publics and demands in the dynamics. This was found that is suitable to expand the
concept of competitive advantage, involving linking and the relative, absolute and
effective operational strengths. Previous studies in the comparative and absolute
advantage theory can be applied to distinct levels of economic systems, both single
entity and the industry, both at regional or national level (Liucvaitiene, Peleckis,
Slavinskaite & Limba, 2013).

Global Economic Restructuring And Competitive Advantage

Global economic restructuring and competitive advantage related with strategic

priorities and the substantial costs of establishing sustainable competitive advantage
however keep unattractive. The British (UK) government designed the strategies for the
realignment of the West Midlands economy in the understanding that a successful
manufacturing sector was central to the UK’s on-going prosperity. In Australia strategic
priorities have been placed elsewhere, especially in the development of mining and
several service industries. South Australia has supported this transformation and while
the country has been slow to grow the mineral resources if compared with Western
Australia and Queensland, the development potential is substantial. Across the growth
of recent reserves and the implementation of technology, South Australia has the ability
to grow, iron ore, lead, silver and zinc. Furthermore, this comparatively marginal public
sector expenditures if compared with the considerable funds invested by the UK
 14

government in reconfiguring the West Midlands to a territory of competitive advantage.

The considerable costs of creating sustainable competitive advantage keep unattractive
to Australian governments channeling of neoliberal philosophies of government and
connected to the premise that there is market-centered solving to largely every
challenge of economy and community (Soosay, Nunes, Bennett, Sohal, Jabar & Winroth,
2016).

In the West Midlands the question is to make a successful transformation to a

forthcoming founded on advanced manufacturing and other high technology industries.
The South Australian economy is arranged on a path concentrated on big scale mining,
while southern Adelaide, the territory greatest impacted by the loss of occupation at
MMAL likely to become more marginalized economically. Furthermore, the economic
forthcoming of the broader ‘region’ of South Australia must keep open to challenge as
the mining sector keeps concerning the fluctuations of inconstant international markets,
has a low potential for value-adding, is highly price competitive and needs minor skilled
labor. The UK response was stated by a conformity to the ideas of competitive advantage
while Australia’s response was created inside the intellectual framework of competitive
advantage. Every perspective caused to a different model for solving the questions of
big scale repetition. The UK model supported the demand for government intervention
in the economy and caused in a concentrated on encouraging innovation, rising the skills
of the workforce, in-depth planning and early intervention inside the region. Although
the positive features of the approach used in the UK is significant to acknowledge the
questions that remain to face the UK West Midlands. There is a demand for further
 15

training support given the comparatively low skill demands of emerging and
development sectors (Soosay, Nunes, Bennett, Sohal, Jabar & Winroth, 2016).

In Australia, government action has more clearly implemented the language and
philosophies of neoliberalism and neoclassical economies, causing in strategies with a
short duration concentrated introduced in the absence of preceding planning for
structural transformation. For instance, framework has been made feasible by the
presence of substitute economic chances inside the country, joined with the premise
namely potentially ill-informed, that labor markets and regional economies expected
adjust. In the medium until long duration, the forthcoming of the West Midlands and
southern Adelaide expected represent this competing approach of territorial
development and great analysts of public policy should remain to cover relative chances
in order to easier realize the advantages and disadvantages (Thomas, Beer & Bailey,
2020).

Conclusion

Global economic restructuring and competitive advantage during the previous two
decades involves global competition, goods unprofitability, and surplus size in
conventional industries that have resulted regarding evident transformations in the
framework of the globe’s economy. Global economic restructuring is an important
process for economic sustainability via better occupation to produce new economic
 16

conditions and in the context of place and space possibly effects economic development.
Global economic restructuring and competitive advantage generate growing
interdependence of countries economy and influenced economic development as well
as fast industrial modernization. Global economic restructuring and competitive
advantage related with strategic priorities and the substantial costs of establishing
sustainable competitive advantage however this keep unattractive.

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