ASSIGNMENT

Changing Patterns of International Business

Changing Patterns of International Business

1. Explain the changing relationship between TRIAD MNE's (Multi-National-Enterprise) and SME's (Small & Medium Enterprise) in low cost economies. You should consider both the implications of low cost labour and growing capability of SME's in low cost economies.

Regional integration is generally an economic globalization, which is accepted to implement the rising interdependence of economic units across regions and countries. Change in technology and rising importance of Multinational enterprises (MNEs) is most often considered as primary driving force of process. I have evaluated the changing implications of low cost labour and growing capability of SME's in low cost economies. The change among MNEs has defined the flows of knowledge around cross border. It is important to understand that MNEs utilize a different options, which assist for developing innovation and distribute across national boundaries with the foreign direct investment many Multinational enterprises set up a new operational activities or they acquire the current assets from foreign markets. Other models through which international knowledge flows include, licensing, trade, cross patenting activities, scientific and international collaborations. These models include wide range of economic actors, whereas MNE and SME plays an important role in low cost economies and many companies keep their flow of investment towards these countries as it helps in reducing operation and production cost for a company (Perumal 2010).

In economics, the term Triad refers to all three regions that dominate the world economy and the conduct of international politics: the North America (U.S. and Canada), the Western Europe (EU + Norway + Switzerland) and Asia-Pacific (Japan and South Korea) with three dominant poles that are the U.S., EU and Japan. They carry about 80% of world trade (70% of world production, 90% of financial transactions and 80% of new scientific knowledge). So these are also key players in the globalization and internationalization. The triad affects 75% of global flows. The triad is the centre of major political and economic momentum in the world. It is located in the north (northern hemisphere). The poles of the triads concentrate over 75% of global flows. The other rooms are on the margins of these flows, triad trading with them for the materials it needs. The intensity of trade between these three areas is mainly due to the close historical, cultural, political, powerful, thus marginalizing other areas of the World System, including the continents of South America and Africa. The geographer Lawrence defines the Triad as: "(bringing) the dominant states (USA, Canada, and Western Europe, Japan) that control most of the political and economic power in the world, have the capital and technologically fluent and Information. 20% of the population has 80% of GNP, 70% industry, 85% of Research Development, 60% of transport services and FDI stock” (Rogoff 2009 pp. 8-62).

The term triad was used and popularized by the Japanese economist in a work of 1985 and it refers to three geographical areas that dominate the world economy and the conduct of international politics: North America ...