Competing Nations for Global Product Mandates
This chapter explains how a rational multinational corporation can match its activities to national objectives, foregoing as little profit as possible, while satisfying each government's demands. It focuses on high technology electronic products for three reasons. First, economies of scale and experience effects are so significant that the international market as a whole can be economically supplied by just one or two plants. Therefore, if there are to be 50 interested governments, then 48 will be disappointed. Second, most governments see electronics as the ‘commanding heights of technology’ and are determined to do everything in their power so that their nation shall not be eliminated. That is, they shall not be one of the 48 for all products simultaneously. Third, many world product mandate involve electrical products. Industrial strategy used to have many meanings, but the austerity of the 1980s is focusing government attention on high technology.