The global environment of business

Recognizing the ongoing industrial revolution: The lessons of business history

One of the first tenets of international business (IB) is that it spans multiple disciplines. Yet driven by the need to publish in specialist journals or by the disciplinary expertise of individual authors, most studies at best pay lip service to this aspect of the field. It is perfectly possible to do deep and meaningful IB research through a single disciplinary lens. However, using the analytical tools of multiple disciplines can make for richer analysis (Agrawal & Hoetker, 2007). Frederick Guy's ambitious book is an attempt at such an inquiry.

Guy begins with a survey of the historical roots of IB. The economic and business world that we see today is the result of actions, strategies and events accumulated over a long historical time span (Jones & Khanna, 2006). Recognizing the historical roots of the current business environment greatly improves our understanding. Yet with few exceptions (Cantwell, 2000; Wilkins, 1974), IB scholars devote little attention to historical perspectives.

The historical perspective enables us to see the deeper long-term processes that underpin current developments. For example, the technological revolution represented by the microprocessor and the internet resonates with the one brought about by electricity over a century ago. The strategic problems faced by Bill Gates and Microsoft have much in common with those faced by Thomas Edison and General Electric.

The long-term perspective enables us to recognize the industrial revolution that is currently taking place. The first industrial revolution moved value creation from the direct application of human labor to tangible assets like industrial plants and machinery. At present the source of value is been shifting, at an accelerating pace, from tangible assets to intangible knowledge assets based on marketing (brands, logistics) and R&D (patents, software, know-how) (Mudambi, 2008). As Guy points out, the localized contextualization of this knowledge creates “sticky” points in geographical space like Silicon Valley and the Italian industrial districts. These technology clusters are the hotbeds of innovation and new industries; studying their linkages with one another is the next frontier in IB research. Best's analytical review makes clear that this book is a valuable addition to the IB scholarly canon.

Ram MudambiJIBS Book Review Editor

REFERENCES

• Agrawal, R., & Hoetker, G. 2007. The growth of management and its relationship with related disciplines. Academy of Management Journal, 50(6): 1304–1322.

• Cantwell, J. A. 2000. Technological lock-in of large firms since the interwar period. European Review of Economic History, 4(2): 147–174.

• Jones, G., & Khanna, T. 2006. Bringing history (back) into international business. Journal of International Business Studies, 37(4): 453–468.

• Mudambi, R. 2008. Location, control and innovation in knowledge-intensive industries. Journal of Economic Geography, 8(5): 699–725.

• Wilkins, M. 1974. The maturing of multinational enterprise: American business abroad from 1914 to 1970. Cambridge, MA: Harvard University Press.