Archive for the ‘Political Economy’ Category

27
Oct
by Gaudenz Assenza (Professor at IE School of Arts and Humanities)

For many years, our economic system rewarded those who said, “I want, give me” while ignoring others who practiced the idea “I have, let’s share”. But with the economic crisis, the momentum of self-interest has begun to wear out. Greed, frivolity and hedonism are increasingly out of fashion. Instead, more people are rediscovering the beauty of slowness, enjoying family, friends, hobbies, spending time in nature — all those things that are neglected when work is the priority. The slowdown was not just about the economy; it reflected a broader shift in values. Realizing that life has more to offer than a fat bank account, fewer people are willing to work 12 or 16 hours a day in the pursuit of a career.

If we look underneath the recent hype and anxiety, the message of the crisis is clear: slow down, reflect and reconnect with who you truly are and what you really want to do. If we disregard these signals — if instead of slowing down we try to accelerate — we do so at the risk of a more drastic slowdown in the future. If we decide we want more of the same, we may get it at the cost of sacrificing our health and our relationships. Phenomena such as burnout, depression and nervous breakdown are not confined to people on the fast track. But if those on the fast track change their ways, they help themselves and others who are dependent on them.

Wise business leaders do not pressure subordinates to accelerate; they form environments where people can thrive and be creative. Instead of installing more controls in an attempt to speed up and achieve unrealistic profit targets, leaders can focus their ingenuity on ways of releasing the power of free will and self determination. If leaders do not learn fast, subordinates may fail to respond, numbed by the proliferation of incentives and punishments imposed from above. Efforts of performance maximization and crowd control are losing their edge. Mahatma Gandhi once said: “Speed is irrelevant if you are moving in the wrong direction.”

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21
Oct

by Riordan Roett (Professor at IE school of Arts and Humanities)

Latin America is deeply divided in terms of development models.  Countries that experienced social and economic crises in the last twenty years have chosen to ignore globalization and opt for inward looking and, ultimately, costly approaches to development.  That collection of “misguided” regime on the Left include Venezuela, Ecuador, Bolivia and Argentina, among others.  The countries that have chosen to undertake a careful, sequenced approach to economic – and social – development are benefitting from a decade or so of good governance.  These countries are best exemplified by Brazil, Chile, Colombia, Peru, and Uruguay.

The states on the misguided Left first experienced a brief period of programs that attempted to address the growing challenges of productivity and competitiveness.  The governments that attempted to implement these programs ultimately failed and were forced from power or were defeated at the ballot box.  The future for this group of countries is unpromising.  Foreign Direct Investment (FDI) is low or practically nonexistent.  These have done little to add value to their traditional exports.  Human capital development has suffered.  And the political leaders of these countries practice a bombastic populist style of government that chooses to ignore the realities of globalization…

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18
Oct

by Gaudenz Assenza (Professor at IE School of Arts and Humanities)

After rising from the ashes of the Second World War, industrialized countries experienced an epoch of unprecedented growth and stability, but instead of preparing for the future, the predominant mode was to live as if there was no tomorrow. Individuals, firms and nations borrowed with abandon, not realizing how overconsumption and lack of ecological stewardship destabilized the very fundament of prosperity. Small fissures in the economic, social and ecological fabric widened to cracks; cracks broadened to crevices; and the crevices expanded to tectonic faults, causing friction and unleashing forces comparable to earthquakes and eruptions of volcanoes.

The idea that the 21st century will be smooth sailing lacks historical awareness. Just like the 20th century experienced great tragedies, the 21st century will experience its share of calamities. Many predictions of the future conducted by agencies like the CIA and the National Intelligence Council are implausible, because they are based on the same assumptions and worldviews that triggered the personal and institutional failures, which we experience today. Predictions assuming an extrapolation of the status quo are improbable, because the status quo cannot be maintained:

  • The much touted rise of China is unlikely to persist in the absence of sweeping changes in policy. As we witnessed during the Olympics, ecological strains have begun to choke China’s economic miracle and social tensions could erupt anytime;
  • Russia is unlikely to become a hegemonic power, not because Putin and Medvedev are ready to relinquish this goal, but because the government is short of resources to pay for a military buildup;
  • America is unlikely to experience a “Golden Age” in the second half of the century, as predicted by George Friedman, because the country lost decades in development by failing to invest sufficiently in human development and the protection of natural resources.

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11
Oct

Frank Peterse, Master in International Relations Alumnus

Frank Peterse, a graduate from the Master in International Relations has been recently appointed Senior Consultant at Investment Consulting Associates (ICA) in Amsterdam. You may find the Press Release announcing Frank’s new position here.

ICA is a spin-off from Ernst & Young and an independent supplier of FDI advisory, location selection, and optimization and supply chain optimization using its web based global location benchmarking tool: locationselector.com®. ICA advises multinational corporations in their strategic location decisions, as well as Investment Promotion Agencies in developing specific investment attraction strategies.

Likewise, business schools are increasingly using LocationSelector.com for their MBA programs to help students solve cases in economic development and corporate investment classes. MBA programs like those offered at St. Gallen, Erasmus Business School in Rotterdam, and Maastricht School of Management are have already implemented this tool. ICA also expects to introduce LocationSelector at IMD and INSEAD.

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