Mario, Luigi and the Global Economy - Part III

The third and final part of the essay "A Glimpse into the Future Economy: Pay Attention The Next Time Your Son Fires Up His Playstation 2™", written middle last year. This final instalment focuses on the core message of the essay in the Malaysian context.

Concluding Remarks:
The Bigger Picture, and the Future is Now

The world is fast changing. The heightened international financial integration in recent years, compounded by the continuous globalisation of trade and unprecedented sophistication of cross-border information flow, has inevitably resulted in an increasingly integrated world. While political ones remain, economic borders are fast disappearing. And therein lies the importance of the three lessons.

Firstly, fast, borderless and free information is a key characteristic shaping the future economy. The market is the world, and benchmarks are international. To remain relevant and achieve success, we would need to open up to the world. And to attract global buyers and investors, we need to offer top-class international products, be it cars, financial services, infrastructures or talents. There will be no place for protectionism, because it will only delay pain and foster complacency, and the indiscriminate global market forces have very little tolerance for the inefficient.

Secondly, we must understand the rule of the game: interdependency. Countries are now closely linked to each other in what can be considered a network of capital, expenditure and information flows, in which shocks occurring in one country can have tremendous spill-over effects on other countries. Economies and markets are no longer atomistic entities, and they cannot be monitored in isolation. Regulators and policy-markers will have to reemphasise their worldview and surveillance processes. Seeing how market forces shape this global network, they must understand and embrace the market, not condescend and stifle it.

Lastly, and perhaps most imminently relevant to Malaysia now, is the third lesson. Replace Sony with China, and Microsoft with India, and you will observe that the example used above is a close analogy to what most emerging economies in Asia are facing now, Malaysia included. To compete directly with China and India in what they are good at will be certain suicide. Remaining at the status quo would mean marginalisation, and competing with more advanced economies is not really an option, yet. Thus, having a different strategy is crucial. We have to be willing to tap unexplored territories. We can’t rely solely on our traditional, but increasingly irrelevant, strengths. Instead, we have to create new niches and generate new competitive advantages.

We need our very own Wii.

References

Computer Entertainment Suppliers’ Association, 2005, “CESA Games White Paper”, Computer Entertainment Suppliers’ Association, Tokyo.

DFC Intelligence, 2005, “Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry: Overview”, DFC Intelligence, San Diego.

Economic Planning Unit, 30 May 2006, “Ninth Malaysian Plan 2006-2010”, Prime Minister’s Department, http://www.epu.jpm.my/rm9/html/english.htm

FIFAworldcup.com, 30 May 2006, “Frequently Asked Questions”, 2006 FIFA World Cup Germany, http://fifaworldcup.yahoo.com/06/en/o/faq.html

International Game Developers Association, 30 May 2006, “Game Industry Info, Data and Statistics”, International Game Developers Association, http://www.igda.org/faq.php#biz01

Levitt, Steven D., and Stephen J. Dubner, 2005, “Freakonomics: A Rouge Economist Explores the Hidden Side of Everything”, HarperCollins, New York.

Sheng, Andrew, 2005, “The Weakest Link: Financial Markets, Contagion and Networks”, Unpublished paper.

Vogel, Harold L., 2001, “Entertainment Industry Economics”, Cambridge University Press, Cambridge.

Yahoo! Inc., 30 May 2006, “Yahoo! Finance”, Yahoo! Inc., http://finance.yahoo.com/

Youtube.com., 30 May 2006, “Search: Wii”, YouTube, Inc., http://www.youtube.com/results?search=wii&search_type=search_videos&search=Search