The Political Economy Review 2017

take much longer to respond to changing consumer preferences or external pressures. They also might find it difficult to solve internal issues, such as workforce demotivation. Smaller, local firms can address such issues much more effectively, which proves crucial in the rapidly changing world we live in. One key area where local firms are posing the heaviest competition is in technology. Large firms often produce products which cannot be adapted to capital market’s needs, while local firms can easily do so. For example, Reliance (an Indian telecoms company) has been much more successful in recent years than international firms, such as Vodafone. 20 years ago, it might have seemed impossible for any local firms to compete with such a wealthy and powerful company, but over time the tables have turned. Multinationals will continue to experience stronger competition from local firms in the future, and will lose market share around the world. The future of multinational corporations is currently very uncertain. While one can see that they will face increasing challenges in the coming decades, it is unclear to what extent will this affect their existence. If they wish to survive and continue thriving, multinationals will need to revise their methods of operation. It is already clear that they will not be able to continue their operations smoothly without becoming more environmentally and socially sustainable, or else they will lose swathes of customers around the world. They will also need to become more localized in nature, operating as smaller firms linked under the same franchise, rather than as a singular organism. They will also have to pay more attention to their countries of origin, as substantial political pressures will continue if they do not attempt to change their attitudes. However, corporations cannot control the overall anti-globalisation and populistic attitudes which are brewing around the world. We are currently standing at a crossroads, where we either return to protectionism, or revisit the current system in hopes of keeping globalisation alive. Of course, this is a process which will take decades, and will present itself as a slow transition rather than a singular event. It needs to be remembered that these firms are still incredibly wealthy and have significant influence on international policy, which means that they will not suddenly disappear off the face of the earth. Nevertheless, choices that will be made by politicians like Donald Trump in the next years will prove to be a test for multinationals, and will decide what direction they will need to take to survive in the world order of the future.



The Economics of Drug Consumption

The consequences of extensive drug use costs the UK economy an estimated £15.3 billion to £16.1 billions of pounds each year. From an economic stand-point the ‘drug problem’ has a very important and relevant opportunity cost, as it diverts resources away from other social and personal welfare activities. An example for the UK is that it is estimated that reacting to illegal drug use requires a workforce of 5,000 customs officers and 18,000 police personnel who are subsequently unavailable for other duties. The impact that illicit drug abuse has on a consumer can be considerable; and in turn manifests itself in treatment and rehabilitation costs in addition with hospital costs and increased mortality rates. It requires societies to focus and dedicate a huge amount of resources to combat this problem. Beyond mere health costs, there is the fact that people "under the influence" can pose a potential safety risk to society due to the drug’s effects on the consumer. Drugs can affect perception, cognition, coordination and reaction time, which has particularly severe ramifications for drivers, for example. According to the 2014 National on Drug Use and


Made with FlippingBook Annual report