Global security risks and international competitiveness

Abstract

Terrorism used to be considered a random political risk of relatively insignificant proportions. However, it seems to have gradually escalated in the last decade or so. It culminated on September 11, 2001 in New York City and Washington, D.C. and Pennsylvania, in the United States when massive terrorist attacks occurred. The assault stunned Americans and the rest of the world not only because of the enormity of the terror attacks themselves, but also because of the vulnerability it revealed. The terrorist attacks on U.S. soil and the military actions afterwards have heightened the uncertainty and gloom over the world economy. Falling consumer demand in the world’s strongest economies and the decline in investment have compounded the problems of many emerging countries. Tighter security measures have since disrupted not only international movement of supplies and merchandise but also international financial flow as well as tourism. These measures threaten the smooth functioning of international business activities we had taken for granted in the last 30 years. As a result, the larger problem of security, terrorism-induced and otherwise, has now entered directly and fully into the competitive business strategy equation. Centers for International Business Education and Research (CIBERs) at 30 universities in the United States recently