Geography Reference
In-Depth Information
emerging Pacific Rim countries, such as Korea and Taiwan. In order to
maintain employment levels in the increasingly competitive and uncertain
environment, UK and European trade unions therefore began to cam-
paign actively for attracting inward investment, decisions about which
were therefore becoming increasingly determined at the local level rather
than at the national level.
Although the new production, value-chain, and labour management
principles were initially adopted by the automobile producers in the
early 1980s, they quickly became disseminated across almost all areas of
manufacturing. Moreover, during the latter part of the decade the same
principles became increasingly embedded in almost all areas of retail,
logistics and transportation sectors. By the end of the decade, the manu-
facturing, retail, logistics and distribution industries of the Western and
Asian advanced economies were already fundamentally different in nature
and modes of operation and organization to the equivalent sectors in the
1970s.
In terms of international business, one of the major differences between
the economic restructuring taking place during the 1970s and the 1980s
and the types of restructuring which had occurred in the previous decades
of the twentieth century was that the global competitive changes were
now also impacting heavily on the financial services sector. As we have
already mentioned, from the inter-war years onwards, financial service
industries on both sides of the Atlantic were largely insulated from global
competition by domestic regulations, and in the post-war era, by the
Bretton-Woods arrangements. However, the highly regulated nature of
financial markets started to unravel rapidly from the 1970s onwards. Even
before the breakdown of the Bretton-Woods system in 1971 when the US
dollar was floated, the first modern effects of globalization on the financial
services sector of European economies had started to take place with the
rise of the Eurodollar markets. However, such changes did not arise from
changes within the domestic financial sectors of European economies, but
rather from those in the domestic American financial sector itself. By far
the major impact of these transformations was felt in the UK, which acted
as conduit via which further structural changes in the global financial
services industry were transmitted across Europe.
The City of London was a very attractive location for the offshore activ-
ities of American financial service firms because of the uniquely informal
and permissive supervisory approach of the Bank of England. The com-
bined effect of the need to avoid US domestic regulatory restrictions plus
the informal regulatory environment of the City thereby encouraged the
widespread immigration of US financial houses into London. The inflows
of US firms also then encouraged other overseas-owned financial houses
