Geography Reference
In-Depth Information
7.
Multinationals, connectivity and
global cities
7.1 INTRODUCTION
Following the arguments in the previous chapters, the reasons why mul-
tinational firms should play an increasingly important role in shaping
globalization are not dependent specifically on the structural changes -
technological, institutional and organizational - which have strengthened
and accelerated globalization processes. Rather, it is because of the tech-
nological capabilities, skills and knowledge assets of MNEs themselves. In
the global competition of the twenty-first century, knowledge, innovation
and technology become increasingly critical assets, and the structural
changes which have facilitated globalization have also increased the
potential returns to such intangible resources. As we have seen in Chapters
4 and 5, MNEs compete primarily on the basis of their internalized knowl-
edge assets and also how these are employed to engage with the knowledge
assets of the geographical localities in which they operate. As such, their
competitive advantages arise from a variety of sources both internal and
external to the firm. However, the crucial competitive advantages MNEs
have are in terms of their ability to exploit their organizational capabilities
and experience of operating in international markets in order to leverage
the benefits from the variety of knowledge sources they are able to access.
As such, multinational firms are best placed to reap the potential global
rewards from globalization, and at the same time to act both as conduits
and facilitators of global knowledge engagement across space.
In terms of economic geography, one of the dominant features of the
current wave of globalization is the emergence of a new set of relation-
ships between the location of knowledge assets, the role of particular
city-regions as knowledge sources, and the location behaviour of MNEs.
The emergence of these relationships has been taking place gradually over
the last two decades, during exactly the same period in which the struc-
tural changes facilitating the modern era of globalization have occurred.
However, over the most recent years, the nature and ordering of these rela-
tionships has become more apparent, as their manifested trends appear
to be accelerating. In particular, if we consider the economic geography
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