French, Italian and British Economies - Essay Example

What do the French, Italian and British economies tell us about the extent to which there has been a convergence in the character of business systems across Europe What do the French, Italian and British economies tell us about the extent to which there has been a convergence in the character of business systems across Europe Titus Rock Manickam Order No. 212484 22 March 2008 Table of Contents: 1. Introduction.3 2. The Prominence of French, Italian, and British economies3 3. Why Convergence...........................................................................4 4. The dynamics of convergence.5 5. The End user5 6. Determinants of European market structure6 7. The impact of communication skills and tools7 8. Cell phones...9 9. Banking operations...9 10. Crime detection...10 11. Security...11 12. Conclusion...12 13. Bibliography13 What do the French, Italian and British economies tell us about the extent to which there has been a convergence in the character of business systems across Europe 1. Introduction The convergence in business systems across Europe has been the natural consequence of the European Union and its predecessors. There has never been a time in history when business convergence in Europe was as steadfast and purposeful as in the present. The factors responsible for this phenomenon are manifold. Some factors like the establishment of European Free Trade Association (EFTA) in 1959, followed by the European Economic Community (EEC) in 1961, and the current European Union (EU) are visible, and there are others such as the impact of globalization on Europe whose full impact have yet to be assessed holistically. Since the formation of the European Union, the European nations have diverted their resources and exports from the global market to the European market. Britain's example of trade shift from United States to the European Union is significant. Also, the effort to converge educational facilities in Europe is a welcome development. (European Convergence Reaches Higher Education). 2. The prominence of French, Italian and British economies France, Italy and Britain are among the top and largest economies in the world. Over 50% of Britain's exports is now concentrated within EU. Also, in the cases of France and Italy, major business partners constitute the EU nations and USA. (Background Notes: France and Italy). In a broader context, the business systems the world over have converged significantly as a result of globalization and the effects of mergers and acquisitions. The markets in Western Europe have been strong, active and stable for quite a long time. However, the countries in Central and Eastern Europe have to catch up. The introduction of Euros as common currency has already begun the gravitation process towards strengthening of the whole European market. (Claire Smith). 3. Why Convergence The economies of Europe are laden with the twin responsibilities of addressing the needs of their own nation at home and also with their obligations to the EU. Agriculture, industry, economy, travel, methodologies, and every other aspect of the way things are done are traded within the EU as first preference. Moreover, innovation and advanced research are the key cornerstones. (President Chirac's wide-ranging interview). However, the industry has shifted focus on value more than competition in order to survive. Large corporations that were once avowed rivals merge or acquire the other. Behemoths like Corus were taken over by outside players like the Tatas of India. They read the clear message on the wall. Deliver or disappear! The market of the day is highly oriented towards value and innovations. The consumer has become extremely aware of the innovative nature of some industries like telecommunications and has high expectations. The telecom and information industries have done their bit by introducing new devices and schemes every now and then further whetting the consumer's appetite. It makes better sense to merge and survive rather than see profit margins thinning and hoping for better times which has no chance of happening in a world metamorphosing relentlessly with discoveries, inventions and upgrades. (Paul Merry). 4. The dynamics of convergence There is strength in unity. The reasons people unite is to show solidarity and confidence in a common purpose. Convergence works on the same principle. When two or more nations or corporations join, it need not lead to shrinkage or cost cutting. Its growth potential is immense and exponential as a result of added values and diversification. Convergence of the telecommunications market in the EU has the potential to impact a wide array of products, services and programs. At the communication level, its activities will bring about a synthesis of fixed and mobile telephony where the user reaps the benefits of both in one common platform. The convergence particular addresses communication, browsing, data entry and storage, education, entertainment, uploading and downloading, and in short, it will do just about anything that the phone and the computer are capable of doing separately. Convergence of telecommunications in the EU has tremendous potential to unleash economic and social transformations. On the economic front, the transformation is assured. But the same cannot be said of the social aspect. Europe has to return to moral and familial values to set right the social anomalies which have bearing on economy and polity in the long run. 5. The End User The single unit to benefit the most by convergence is undoubtedly the customer. Convergence is in national interest. But reason for the convergence goes beyond national boundaries to serve the interests of the common man. The average customer is privy and witness to the greatest era witnessed in history. She sees the market roll out the red carpet every time she sets foot in the mall. She is already aware there are great many gadgets ensconced blithely in the show cases of the mall whose capabilities she has as yet not fathomed. The fascination for the product enhances in the knowledge that it has originated from one of the EU member nations. The convergence has expanded business opportunities and employment prospects for every individual within the EU commonwealth. High pitched sloganeering for the customer by competing entities have given way to quietly studying and understanding her needs and the values the convergence is capable of providing. 6. Determinants of the European market structure Defining and analyzing market structure is a very complex affair. It leads one to wonder at times if there is indeed anything like market structure. In a diverse continent like Europe where each country has distinct language and culture, when considering the market one has inevitably to consider culture and economy as well. Market relates the product to the consumers, whereas economics dwells on socio-economic issues such as social and economic standards of the common man. Market, economy and socio-cultural issues are inherently interconnected in a market structure. Growth in services and manufacturing outputs show an imbalance which do not present a completely healthy scenario. (Bill Emmott). Europe has very rich nations like France, Italy and Britain. But it has weaker economies too like Romania, Bulgaria, Ukraine and Moldova. It is crucial for EU to understand the socio-economic dynamics of a region in order to carve out a level playing field for all its members. The biggest hurdle for EU is the language problem. It does not have a common language for all the member nations to easily understand each other. Hence, a lot of projects and jobs go overseas to countries like India with large English-speaking population. The discipline of economic structure focuses on market situations such as perfect competition, monopolistic competition, oligopoly and monopoly. The actual discipline is determined by the situation conducive to the given market region. The outcomes in these situations help the market player gauge the decisions, motivations and opportunities for other stake-holders. Other factors responsible as determinants are product definition, purpose of the product and their inter-relationship that help the consumer differentiate and choose. All the above, however, do not totally satisfy the criteria in defining market structure determinants. They may, at best, provide some insight into an individual's preference and behavior that ultimately influence his decision. They also provide an understanding of how representations are made to the market. An attempt at studying the determinants itself is useful even if market structure analysis has to depend on multi-stage approach to derive maximum understanding of the underlying conditions of every consumer group. They classify the market under different consumer groups and their behavior and traits which give a better idea about their choice and needs. Hence, complex as it may be, it is important to try and understand market structure determinants. For Europe, given the peculiar nature of each member nation, not doing so could prove suicidal. (Italian Unification). 7. The Impact of communication skills and tools France is one of the leading countries in the business of telecommunications. The use of communication tool, instrument and invention is poised to assume multi-proportional dimensions. From their present uses of communication, messaging, transmitting, storing, etc, the convergence is set to level up the services lacking in each entity. That is the telephone is poised to add the functions of the television and vice versa. The concept is supposed to combine entertainment, information and business. In Europe, the telecommunication industry has very important and crucial role to play in strengthening the bonds of business and culture. The instrument will be user-friendly enough to cater to the every customer segment. But the industry will have to address the multi-language issue. To begin with, it could address the issue of providing English lessons for countries where the quality of the English language is below par. This is especially crucial to expand the scope for all professionals in Europe like artists, writers, graphic designers, musicians, etc. The dawn of information and communication technologies has already impacted the entire system of business. It is set to impact many more arenas and it is a mystery why it is taking so long to impact important sections such as education and social welfare in the ways it ought to. (Communication System Security). The impact is two-tiered. The convergence is set to impact the world in the near and distant futures. In the near future, it is set to impact the banking sector, security, the educational system, knowledge and information industry, retail, tour and travel, among others. The prospects for distant future, say, fifty years from now, are immense and even Bill Gates is scared to guess. The only area that could be mentioned with certain degree of conviction is the security industry which will get tremendous boost to address individual, social, industry, national interests, nuclear safety devices and norms. The convergence of the telecommunication markets will play a useful role in augmenting security. 8. Cell-phones Much of the technological inventions and advancements have been of significance only in the related fields but some have been nothing short of marvels that spawned off developments and breakthroughs in areas never foreseen immensely benefiting mankind. For example, the lowly wheel is said to be the mother of all subsequent inventions because it made traveling a lot easier and faster. One would rate electricity as the best of all inventions till date because life on earth without this form of energy is now unthinkable. The invention of rockets enabling deep space explorations redefined the rather limitless dimensions of space, travel and communications, and gave a far-reaching thrust to telecommunications one of whose offshoots is the ubiquitous mobile phones. And lastly the IT and its allied IT-enabled industry have opened up mind boggling vistas of usage and more importantly, employment opportunities to make easy money and also made millions of people around the globe multi-millionaires within a short span of a few years. 9. Banking operations The international banking system is totally technology driven and their branches are interconnected through satellites. Savings and current account holders are given unique, encrypted digital numbers which are relevant in any branch in any corner of the world. Transactions with well established banks can be done through any of their branch spread around the globe. It is only a matter of time before smaller banks begin to follow suit. The banking and finance sectors are already on the move with convergence covering inter-branch and bank-customer communications like never before. Debit, credit and ATM cards perform multi-tasks which used to be done across counters consuming much time, in matter of seconds. 10. Crime detection Crime-detection involves time-consuming, painstaking follow up of every clue, every lead, however improbable, ridiculous or unlikely it may appear. The long, tedious probe often tests the patience of the sharpest investigators, notwithstanding the fact that suspense thrillers and spy chillers through their protagonists like Sherlock Holmes, Perry Mason, James Bond, et al have made the detectives larger than life and glamorous, and made a legion of readers and movie goers devoted followers of their exploits. Telephones, electronic media and the internet are already being used on a wide scale. The mushrooming cell phones have turned out to be an unmixed blessing for the crime-detection force in trailing and nailing wrongdoers in double quick time. The used of cell phones by criminals, the victims and even the witnesses has put the crime branch at an advantageous position in solving cases. Crimes get busted sooner than they used to be as mobile phones leave easy to follow trials easily traced by software experts. Some cell phone handsets have in-built digital camera features to capture photos. Phone records not only track the caller but also pinpoint the location from where the call was made by the culprit. Convergence for the purpose of crime detection and prevention is a key factor not only in Europe but elsewhere. The mobile technology has indeed provided an unexpected windfall for the much-harried cops in the crime-investigation department. 11. Security Army and security personnel from Europe are being deployed all over the world in regions of maladministration and unrest due to terrorism and rebellion. Again, telecommunications is one of the most important components in the armory of the security industry. Wireless sets, data storage, retrieval and transfer devices, electronic monitoring systems, surveillance gadgets and equipments, alarm systems are some security items that will provide tremendous logistic support with their range and scope of functions. With world best research and development facilities, Europe is in a position to maintain lead in security issues. The security needs for different situations, environment and installations are addressed through integration of security personnel, communication and vigilance network, tracking and detecting systems, alarm systems, and a host of other means which are capable of being integrated with the convergence. The convergence is also capable of integrating with the overall administrative systems incorporating security measures as part of the normal routine to help with investigations in case the need arise. This is particularly useful for institutions like banks, departmental stores, hotels, government office premises, and residences of high ranking politicians and celebrities, and also schools. A state of high vigilance even in times of calm and tranquility is provided through appropriate security systems at a continental level. (Communication System Security). 12. Conclusion France, Italy, Britain, Germany and Spain are leaders in the European economy. Italy has thriving fashion and fabric industry which was once a powerful bastion of Britain. (Nicholas Owen and Alan Cannon Jones). Thanks to the EU, the convergence of business systems across Europe is in place. However, Europe is losing ground to Asian tigers like China and India. It has to take a cue from both of these nations and pay attention to the English language and familial issues to retain its top position. Bibliography: Alan Baldwin, British and French GPs 'a done deal,' rediff.com, Sports, 10 November 2004, http://in.rediff.com/sports/2004/nov/10gp.htm. Background Note: Italy, U.S. Department of State, Bureau of European and Eurasian Affairs, February 2008, http://www.state.gov/r/pa/ei/bgn/4033.htm. Background Note: France, U.S. Department of State, Bureau of European and Eurasian Affairs, January 2008, http://www.state.gov/r/pa/ei/bgn/3842.htm. Bill Emmott, The British Economy, The Trilateral Commission, http://www.trilateral.org/annmtgs/trialog/trlgtxts/t55/emm.htm. Clare Smith, Waves of Convergence, Europe risk - East Europe, http://www.financewise.com/public/edit/riskm/europe/eastern.htm. Communication System Security, Lead Study Group on Communication System Security, International Telecommunication Union, http://www.itu.int/ITU-T/studygroups/com17/cssecurity.html. European Convergence Reaches Higher Education, http://www.wharton.universia.net/index.cfmfa=viewfeature&id=738&language=english. Great Britain, Country Guides, News and Background Notes, The Washington Post, http://www.washingtonpost.com/wp-srv/world/countries/greatbritain.htmlnav=el. Italian Unification, Cavour, Garibaldi and the Making of Italy, http://www.age-of-the-sage.org/history/italian_unification.html. John Hooper, The Guardian, Official: Britons are the most cultured Europeans, 19 February 2005, http://www.guardian.co.uk/uk/2005/feb/19/arts.britishidentity. Michael Roberts, How healthy is the British Economy http://www.marxist.com/Economy/brit_economy0304.html. Nicholas Owen and Alan Cannon Jones, DTI Economics Paper No. 2, A Comparative Study of the British and Italian textile and clothing industries, April 2003, http://www.berr.gov.uk/files/file14772.pdf. Paul Merry, Author, Fixed Mobile Convergence, Informa Telecoms & Media, http://www.europemedia.net/marlin/30000000861/MARKT_EFFORT/marketingid/20001366338/marlinsource/PDCinformaTMprodcatalogproceed=true&MarEntityId=1203657017310&entHash=10058b6e97e&UType=true. President Chirac's wide-ranging interview in the Italian "Corriere della sera" newspaper (excerpts), France in the United Kingdom, French Embassy in the United Kingdom, http://www.ambafrance-uk.org/Wide-ranging-interview-given-to.html. Read More