5- from Free Trade to Globalization: Colombia Faces the 21st Century Globalizing Knowledge Economy

Abstract

Knowledge, the multinational firm, and the free flow of financial capital seem to be the new and perhaps leading actors in the emerging 21st century global economy. From a comparative basis and relating this variables we attempt in this paper to study and explore what we consider are basic initial conditions that will led into the 21st century to conform a one-world one-system market an how it affects emerging countries like Colombia. Path dependence approaches explain current equilibrium as a function of early random shocks in the trend process that led to a new balance. As a departure point we advance in the notion that is applicable knowledge the factor that may have a long-term consequence on sustaining growth. As well we consider that economic practices advanced by the multinational corporations will determine changes in the one-world one-single market structure, where an important effect of this institutional change relates with the transfer of technology and knowledge marking a new trend and modifying the diffusion of organization principles. Finally, we consider that the expansion of direct foreign investment flows and on the volume of risk capital ventures invested in Colombia may introduce somewhat permanent transformations in the globalizing economy.

JEL Classification: F15, F23, N16, O54