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Regionalization of Corporate Global Powers

February 23, 2008

Inter- Extra-Regionalization or Network EconomiesYou all know about “curiosity” and the cat.  I was reading a Reuters article earlier and thought about Castells’ discussion on “Globalization versus Regionalization” (Castells, 2000, Ch 2, p. 111).  I refer you also to the Reuters’ article: .  Castells notes that extra-regional trade center hotspots are America and Asia and Europe to a lesser degree (p. 111).  As you may be keeping up with, 3Com ( ) through its subsidiary Tipping Point makes security software.  The U.S. government is a primary customer of the security software.  Recently a Chinese company Huawei which manufactures telecom equipment has attempted to seek approval from the Committee on Foreign Investment in the United States (CFIUS) to purchase as much as 16.5 percent of 3Com stock.  Although Huawei has made several successful transactions with other telecom companies world wide and in the U.S. this transaction has been questioned.  The U.S. cited concern is that Huawei’s founder has close connections with China’s military.Could this be an example of a “homogenization of inter-network corporations within an extra-regional setting?  In other words do we see an “It’s my party and I’ll cry dance if I want to” attitude between players in the world “hierarchy”? Castells aptly notes the tension as between growth in liberal trade and simultaneous governmental trading blocs designed to maintain control (p. 110).  This does not appear inconsistent with his statement that globalization of corporations is more a phenomenon of “networked firms” rather than geographic localities (p. 115).  It appears that Castells would rather speak in terms of “economies” rather than regions primarily because an economy better translates to a “flow” of information and communication than does the concept of a “region” which is more physical and relates to geography.  More importantly though, it appears to me that he takes note of several practical aspects of social relationships.  For instance in speaking of Asia he is quick to note the social divisions between Asia mainland and Japan.  The imperialism of Japan has remained and festered in the Asian mainland for the past centuries.  This may be translated as disdain, hate or simple mistrust.  Regardless, there is a barrier to alliance between Asia (primarily China) and Japan.  Recently the leaders of each country have attempted to create a cordial relationship, but this has been met with resistance within the populous.  This said there is not the same barrier expressed in exchange of goods as there is in exchange of information.  Information is “virtual” and has no reality until applied.  Goods are seen.  When it comes to multinational sales and ownership of corporations we see a blend of product and information.  The product is the corporation and its widget.  However, the information segment is the mind and concept of the ones who make decisions within the corporation.  Hence, we see some economies willing to buy and sell products (imports and exports), but unwilling to sell or allow sales of corporations which would allow free movement of certain types of information and knowledge.  I believe this is the analysis of 3Com’s situation.

This seems to be supported by analysis that the networks of firms are not the only decision makers, but rather only one segment of the decision process to bring other firms and networked firms into their web.  Of great importance to the decision making process is government and those public institutions (perhaps quasi governmental) who may have their own schemes, reasons and goals for growth, security, GNP or prowess.

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