New Rules of Gl Essay

3859 Words Jun 13th, 2016 16 Pages
HBR.ORG

The Globe

Coca-Cola lines a shelf at a supermarket in
Shanghai in May 2009.

The New Rules of
Globalization

PHOTOGRAPHY: AP IMAGES

As more countries rethink their priorities, multinationals must proceed with caution. by Ian Bremmer

I

n the past few years, Pfizer has encountered globalization’s new phase. As part of the Indian government’s efforts to make medicine accessible to as many people as possible, in February 2013 India’s
Patent Office revoked Pfizer’s patent for the cancer drug Sutent and granted a domestic manufacturer, Cipla, the right to produce a cheaper generic version. India’s Intellectual Property Appellate Board has since set aside the decision and has directed the Patent Office
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Leaders in those countries know from experience that the market is crucial to growing the economy and improving living standards— and therefore helps autocratic or corrupt governments stay in power. But they also realize that if they allow the market to decide which companies win, they risk losing political power, because they will no longer control job creation and their citizens’ living standards. They may also inadvertently enrich those citizens who would challenge their power.
The objective of state capitalism is to control the wealth that markets generate by allowing the government to play a

104 Harvard Business Review January–February 2014

NO

has shifted the tectonic plates, as I will describe. Globalization now comes with new costs and risks.
In globalization’s heyday, strategic sectors—those in which governments take an active interest—and nonstrategic ones were easy to identify. Multinational companies could enter some industries, such as soft drinks, all over the world; other sectors, such as aircraft manufacturing, were off-limits. That’s why Coca-Cola sells its products in more than 200 countries today, while Lockheed Martin generates
80% of its revenues from sales to the U.S. government and employs 95% of its workforce in the United States. In the new era of guarded globalization, however, any sector could prove to be strategic, depending on a government’s attitudes and policies.
Indeed, between

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