Approaching to the 21st century, world economy becomes more and more global. Intodays life, several parts of an item can be made in different countries andunified to produce an output. Realize a laptop whose processor is made in U.
S,by Intel, whose screen is coming from Japan, Toshiba, and whose other variousparts are coming either from Taiwan or from Korea. Lester C. Thurow, a professorof economics and management at the M. I. T, and the writer of the book BuildingWealth, considers this era as being the third industrial revolution.
Heclaims that this one differs from the former two industrial revolutions, in away that the first two revolutions were based on the capital and land. However,the third revolution is based on the technological improvements such ascomputers, robots etc. , and knowledge. In the second revolution that creatednational economy, the main idea was the German Systematic IndustrialResearch, research of land and capital. On the other hand, electricity thatwas invented during this era, created the modern life.
The third one has createdglobal economy. In each industrial revolution there had been a dominant countrythat leaded to the world economy. In the first revolution, the British leaded tothat era. In the second one, the dominant country had been Germany above theBritish.
And finally, in the late 20th century, U. S. emerged as a world power inthe last industrial revolution. The questions to be asked are: How did U.
Sbecome the best in the industrial world and what are the evidences of thisstrong dominance? . The success of U. S. in the industrial world originates fromcountrys generic structure and ability to balance control and chaos side. Tobegin with, America is making the entrepreneurial jobs very well and this aspectallows U.
S to play the game of shutting-down and opening new onessuccessfully. For instance, in 1981 AT&T was nearly breaking and in the1984, the company fired more than five hundred thousand people in order to cutits excessive money flow. However, entering 21st century, AT&T became one ofthe most strong telephone companies in the world. Even if the company didntshutdown during 1980s, they showed a significant improvement in the industry. Additionally, when it comes to playing in a knowledge-based economy, U.
S. leadsthe industrial world. For instance, in Nevada gold production has doubled in therecent years. Of course, the reason is not a new-discovered gold reserve but thetechnological improvements. Nevada became the place where 10% of world goldproduction takes place. Not only did those two generic structure of the countrymade U.
S. a leader in the world economy but also its ability to balance controland chaos sides served America considerably. Regarding Lester Thurow, balancingthose two things are considerably important. Because, in order to put thecreativity in economic use, a country should balance both chaos and controlside.
For instance, the most creative country in the second half of 20th centurywas probably Russia. Authors like Tolstoy, Dostoyevsky, and Pushkin, artistssuch as Kandinsky, Tchaikovsky, and scientists like Pavlov, Mendeleev were grownup during this era. But everything was so chaotic and they couldnt put thiscreativity in economic use. They could not balance the line between theproductivity and order. And they had lost the game of technology.
However, U. S. technology was not suppressed by order. Because countrys productivity cansupply the willing of society. As a consequence, U. S.
s dominance on the worldeconomy has been a result of its generic structure like entrepreneurship andknowledge-based economy, and of its right balance between chaos and controlside. The evidences of this dominance become more clear after playing the gamebetter than others. For example, the wealthiest man in the world, Bill Gates, isfrom U. S. Todays seven of the twenty-five biggest U.
S. companies didntexist in the 1960s but all of twenty-five biggest companies in Europe didexist at these times. Another example, while there were only two American firmsamong the worlds ten largest in 1990, nine of those firms were American in1998. Similarly in finance, in the 1990, none of the American banks was amongthe worlds biggest fifteen, but at the 1998, nine of those were American. Thelast but not least, as Lester C. Thurow indicates, during the decade of 1990s$2 trillion will be added to the U.
S. Gross domestic product (GDP). This amountis larger than GDPs of all the countries in the world except Japan. So,its obvious that U. S.
dominated world economy a little bit! Today, the nameof the world power is America. Its economic dominance on the world is obviouslythe reason of this power. In a knowledge-based economy, U. S. plays the gameexactly as it should be.
And as Lester C. Thurow mentions, the gap between U.S.and the other countries becomes larger and larger.Economics
