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 .
30 | THE WORLD DEMANDS A NEW MAP
to southern China and their trade volume has grown from US $ 20 billion a decade ago to US $ 80 billion today .
Meanwhile , nuclear-armed India and Pakistan have fought three wars and continue to dispute Kashmir , but they ’ re also negotiating a most-favored-nation trade agreement and want to complete a pipeline that stretches as far as Iran . Taking about Iran , wasn ’ t it just two years ago that war seemed inevitable ? Then why is every single major power rushing to do business there today ?
From Iran , to China , to India , the business implications of new-found economic cooperation between regional heavyweights are significant . Even in isolation , the economic potential of each of these countries is vast . Therefore , the business opportunities which could emerge through collaboration between them are likely to be so too , provided stability endures .
I cannot guarantee that World War III will not break out . But we can definitely see why it hasn ’ t happened yet . Even though Asia is home to the world ’ s fastest growing militaries , these same countries are also investing billions of dollars in each other ’ s infrastructure and supply chains . They are more interested in each other ’ s functional geography than in their political geography — and with good reason . With conventional systems no longer fit for purpose , countries , cities and companies alike are opting for change through boundless connectivity , over an unsustainable status-quo restricted by the geographical borders of yesterday ’ s world . All we need now is a new map .
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 .
Accenture
The story of Accenture , one of the world ’ s biggest consulting firms , illustrates the seismic shift that has occurred . Back in the 1950s when the company was nothing more than a small division of US accounting firm , Arthur Andersen , its first notable project was advising GE to install a computer at a facility in Kentucky . Several decades of growth followed and by 1989 , the division had become its own organization : Andersen Consulting — the American dream epitomized .
But as it continued to grow , the American identity of Andersen Consulting became diluted , not because it began opening foreign offices but because it saw benefits such as fewer taxes , cheaper labor and laxer regulations beyond its borders . As a result , the firm set about internal restructuring to take advantage of the opportunities that existed in thriving cities outside .
By 2001 , the firm had changed its name to Accenture and listed on the New York Stock Exchange . It had ceased to exist as the US multinational it once was , and had instead become a sprawling network of franchises coordinated somewhat loosely out of a Swiss holding company . Accenture then incorporated in tax-free Bermuda before re-domiciling to lowtax Ireland in 2009 .
Seven years on , the consulting giant ’ s 373,000 employees can be found in more than 200 cities in 55 countries across multiple continents . Yet staff don ’ t overstay their welcome . Accenture ’ s HR department ensures well-timed placements in order to avoid the need to go through the laborious process of securing residency status for employees . Consultants are parachuted into project locations but usually report to regional ( often low-tax ) hubs , such as Prague and Dubai .
Accenture and the many other metanationals now shaping global systems are building success on connectivity and challenging the definition of global superpower . For stateless companies , there is always another place to go , where profit and opportunity are more plentiful , and conditions more attractive . This belief has helped agile and smart companies overtake their more cumbersome predecessors . And in a world where agility , smartness and connectivity appear to know no boundaries , the question is , what ’ s next ? Time will tell , but consider this : it might not be long before metanationals trade terrestrial restraints for the power of the cloud .
EMERGING MARKETS BUSINESS FIRST QUARTER 2017 ISSUE NO . 2