Ant Game When eleph-Ants Make Love

Crystal-ball glazing to the Year 2020....

1. It is tempting to extrapolate on the basis of the past that 10 million manufacturing jobs in the Western world maybe lost.

2. The world's largest economy looses its dominance in automobile and information technology sectors as well as in the capital market.

3. The rest of us exporting commodities, and doing shoeshines for a pastime.


We are refering to the emergence of China and India as economic forces to be reckon with.

In a win-win Nash equilibrium scenario, consumers in the developed world will benefit with abundant supply of affordable products and services in addition to creating a class of consumers from China and India willing and able to buy luxury goods ranging from Prada bags to private jets. In a zero-sum game, the dire outcome means that life will be a grind for the less well off and even the more highly skilled workers may feel vulnerable.

If logic prevails, it is not sustainable nor reasonable for the world's largest economy to consume more than it produces and hence for the two emerging economies to share the load by opening their markets, and consuming more products and services. A major step in the right direction by way of floating the yuan currency produced the right sentiment for believing that a win-win Nash equilibrium optimal outcome is achievable. And the question to pose is how to incentivise the Chinese corporations and consumers to buy more and of what? A more expensive Yuan will naturally spur the US economy to make further gain in productivity and perhaps in the short run, discourages consumption of imported goods, hence improving the balance of trade.

It also means more demand for health care, housing, amongst other things. It is said that China's health-care spending per dollar of GDP can potentially grow by 2X before it matches that of the U.S.

For pride and prestige, it is natural for everyone wanting to dominate the most coveted space. While the principle of comparative advantage dictates that different economies compliment each other by producing complimentary products and servcies instead off vying for the same space, and to improve trade flow as well as to achieve higer output. Like most matters in life, the devil is in the details in striking a rational outcome.

In the near term, as they jostle for a optimal position, life can be precarious for those in the vicinity. Particularly with the pressure to create shareholder value, Corporate World is compelled to modify its business design and seek out cheaper labour and white-collar workers will be next in the firing line.

However, it remains a possibility to thrive in such an environment if one is nimble enough to sidestep the footprints of these giants and seek out uncontested market space.

The ant game is to stay alive and thrive!

Next: How To Stay Alive and Thrive? Small Is Big!

Categories: Strategy