Countries need to start plowing much more investment into second-tier cities . By doing so , they can dissipate populations and create more centers of growth .
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Connectivity : Heralding the Dawn of the Metanational
Countries need to start plowing much more investment into second-tier cities . By doing so , they can dissipate populations and create more centers of growth .
8 . Conflict
Countries are discovering that functional geography is more important than the historical divides that have perpetuated deep-rooted hostilities . If this trend continues , business opportunities could emerge in and between previously volatile environments .
Where conflict is concerned , the real test is going to be Asia . Can connectivity overcome the patterns of rivalry among the great powers of the Far East ? Since the end of the Cold War , at least six major wars have been predicted for this region , but none have broken out .
Take China and Taiwan . In the 1990s , this was everyone ’ s leading World War III scenario . But since that time , the trade and investment volumes across the straits have become so intense that last November , leaders from both sides held an historic summit to discuss eventual peaceful reunification . Even the election of a nationalist party in Taiwan , that ’ s proindependence , earlier this year , does not undermine this fundamental dynamic .
Forget the multinational , we are now entering the era of the metanational : corporations that are effectively stateless . Outgrowing the multinational definition that centers on the existence of operations in multiple countries , metanationals reject the confines of geographical borders and embrace connectivity to the maximum . What was an emerging phenomenon a decade or so ago has now become commonplace , with large corporations severing the state lifelines that once served both country and company well .
Amongst the savviest metanationals , it is not unusual to find firms with legal domicile in one country , and corporate management , financial assets and administrative staff strategically placed across many more . Here , increased connectivity in the form of improved transportation links and technological advancements are making this not just a new possibility , but a new norm . And with increasing propensity , the locations of choice for these corporate giants are the world ’ s emerging megacities .
In this context of unprecedented connectivity and rising megacities , a process of denationalization is occurring , with companies cherry picking the capacities of various locations world-wide , and drawing them into their global value chains . For corporate heavyweights such as HSBC , DHL , ExxonMobil ,
China and Japan have an even longer history of rivalry and have deployed their air forces and navies to show their strength in island disputes . But , in recent years , Japan has been making its largest foreign investments in China , and Chinese people make up the largest number of foreigners residing in Japan today .
Unilever , BlackRock and Visa , choice of location is no longer dictated by sovereign frontiers , but by different criteria for different corporate functions : Which locations have businessfriendly regulations ? Which are resource abundant ? Which have seamless connectivity ?
With geographical constraints all but removed , the income and influence of these corporate powerhouses are growing stronger than those of many nation states . Walmart earned a huge US $ 486 billion in revenue last year — income that many national economies can only dream of . And the America-born retailer is just one in a long line of examples , with companies such as Apple , Microsoft and Amazon also joining the metanational ranks .
Then there ’ s tax — a further indication of the growing separation between company and country . Some of the world ’ s biggest corporations are directing overseas revenues into offshore holding companies incorporated in locations from Switzerland to Singapore . The result is trillions of dollars of tax-free cash . Just like the corporations themselves , this income is “ stateless ,” with little or none of it trickling back to the national economies in which these metanationals first laid their foundations .
The Accenture example on the page that follows , illustrates the rise of one such metanational .
Then there are the relations between China and India . The two countries have fought a major war and have three outstanding border disputes , but today India is the second largest shareholder in the Asian Infrastructure Investment Bank . They ’ re building a trade corridor stretching from the northeast of India through Myanmar and Bangladesh »
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