Global Competition

As economics plays an ever-increasing major role in the world of nation-states, it will become the dominant weapon that nation-states will use to project their power and influence. Economic power will replace military power in that regard, as the United States continues over at least the next decade or more to be the most militarily powerful nation-state in the world, with China vying for that status.

NEW YORK (CNN/Money)—The United States will impose a 30 percent tariff on steel imports over the next three years in an effort to give the nation's beleaguered steel industry breathing space to recover, the Bush administration announced Tuesday.^[6]

Economic power will lead to more economic warfare, including anything from trade wars using tariffs to factional battles in the World Trade Organization (WTO) arena, as nation-states argue that others are not complying with the WTO agreements.

Increased global competition among nation-states will lead to more nation-states supporting their corporations, both national and international, more strongly than ever before. Furthermore, because of the dependencies of modern nation-states and the corporations on information and information systems, such systems will become more of a target and also a weapon in the trade and economic wars.

The EU move came in a letter from its ambassador to the World Trade Organization, Carlo Trojan, to his U.S. counterpart in Geneva, Linnet Deily. It followed statements from U.S. officials rejecting EU calls for compensation, which the EU, supported by Japan and some other countries hit by the U.S. measures, argues is provided for in the WTO's Safeguards Agreement. ^[7]

At the same time, global corporations will help by having more and more influence in the nation-states where they are located. They will also become more of a stabilizing force, as business abhors conflicts and uncertainties. Such events are bad for business. Therefore, as nation-states over time have less influence, global corporations will continue to expand their influence and in some ways take the place of nation-states, in particular the smaller nation-states. We already see instances of that where the corporations have more power, influence, and assets (including money) than some of today's Third World nation-states. These corporations are providing more and more for the welfare of some nation-states' citizens than do the governments of these nation-states, including housing, medical services, and recreational sites.

Businesses will continue to expand their use of outsourcing InfoSec functions and the use of consultants to meet their IE asset protection and investigative needs. In the realm of large, multinational corporate enterprises, the cost of employing sophisticated "private InfoSec" services to ensure that businesses' IE assets are protected will be seen as merely a cost of doing business. However, small and medium-size organizations will be significantly challenged to provide adequate IE assets protection—yet a failure to do so may well subject them to ruinous losses. Furthermore, such small and medium businesses are being linked to major, global corporations as their suppliers and subcontractors. One wonders if there will be anyone who will be affordable and available to protect the small businesses that are some of the major "weak links" in the IEs of major corporations.

As high technology continues in its sophistication, power, and miniaturization, there will be no way of protecting sensitive corporate information unless it is retained only in hard copy and not stored on any computer system. Corporations will try to gain a competitive advantage by making better products faster than the competition.

One of the strategies that will be adopted more and more by corporations is one of knowledge management (KM). According to Mr. Perry Luzwick:

Knowledge management (KM), the development and integration of technologies, processes, and cultural changes, provides a means for well-informed, rapid decision making via collaborative information and knowledge sharing by varied and dispersed organizations and individuals. KM tenets include support for organizational processes; tailored content delivery; information sharing and reuse; capturing tacit knowledge as part of the work process; situational awareness of information and knowledge assets; and valuation. KM enables an organization to be more agile, flexible, and proactive. The approach is ideal for integrating intelligence (e.g., economic and open source) and security (e.g., physical, personnel, and operations). Organizations can use KM to both gain competitive advantage and also protect their Information Environment (IE).

The corporations will begin to look more and more at some of the military strategies of warfare for providing the competitive advantage in their "global business wars." As stated earlier in this book, among these strategies is one based on the OODA loop (Observe-Orient-Decide-Act). The idea (attributed to Colonel John R. Boyd, United States Air Force) is that the corporation (in this case) that can be the quickest to move through this loop gains a competitive advantage. Furthermore, the advantage is created because the competitor becomes more confused and uncertain over events, and that may influence the competitor's judgment and decisions. In his document Patterns of Conflict, Boyd concluded that operating inside an opponent's OODA loop generates "uncertainty, doubt, mistrust, confusion, disorder, fear, panic, and chaos." How you can use this technique and also defend against it may very well mean the difference between profit and loss for your corporation.

^[6]http://money.cnn.com/2002/03/05/economy/steel/index.htm, March 5, 2002.

^[7]http://money.cnn.com/2002/03/15/news/international/eu_steel.reut/index.htm, March 15, 2002.