The existence of an invisible continent reflects the markets capitalist desire for “growth” and expansion, in the world economy. “The old world may feel familiar, and still respond predictably to government and corporate policies but there is no growth in it”. The invisible continent framework information is explained from four, dimensional windows: visible, borderless, cyber, and high multiples.
In 1990, Japanese businessmen were talking about and expressing concern over deflation. The phenomena of recession growth were plaguing them; Japanese companies were produce at record level rates and increases and at the same time consumers consumption rates failed to keep up. The Japanese government responded by lowering interests to zero and engaged in stimulus package of massive government spending with the public work projects spiking too $400 billion. Japan had spent $1 trillion beyond its budget. Japan’s consumption was voracious; as Japanese consumers paid prices, as high as, $2,000, for Sony play station borrow against their $50 surplus in net income, for Japanese “bread winners”. Between 1998-1999, Japanese were talking on 30 million cell phones; 17 million Japanese visited overseas for shopping and vacation and spent some spent 100k on around the world cruises; and Japanese were the number one in the world purchaser of luxury goods.
“People felt economically stable” and expressed optimism in “prospects for growth”; the Japanese were rich in savings, weighting out at $12 trillion in savings and 35k gross per capita GNP. Japan financed US deficits in trade, investing in US Treasuries funding government budgets, and participated in balance of trade swings. Japanese savings exported wealth generation foreign, as savings were invested in dot.coms, softbank, venture funds, and stock market fuel that boosted the American economy of the 1990s. Japans economy was linked to economic forces outside of Japan.
Clinton orchestrated the US boom by drawing money to the US economy and the Japanese government drove money away from local development by vocalizing a pessimistic future for Japan repelling its people from reinvesting in Japan. Massive cross-border migration of capital injected into America. “By being overly pessimistic, the Japanese government effectively prevented its own people from investing in Japan”. Using Cyber communication and networks, the Japanese investor shot their money in currencies that showed the most promise.
The dollar represents 50% of private saving in the world, and American economy represent 30% of global GDP. $200 billion recycle back into the US economy, as investors buy up T-bill and US stock. Japan, Brazil, China, Russia flock to put their money into the dollar denominated securities. The dollar is preferred because it is widely tradable and easily exchangeable.
“People around the world become the workers of America” and companies leverage labor costs reductions across national borders reducing operation costs to achieve “Products goods at a competitive and deflationary cost”
In 1997, $45.1 billion poured into Asia and $21.3 billion flowed from Asia and Africa into the US. The flowed out of Asia exasperated the Asian crisis but bolstered the US economy. Also, money flowed from Latin America into the US. The dollar became a magnet for currencies, “America is a safe haven for money”.
The cyber dimension accrued marketability for investors plugged into the network and being plugged into the network helped those individuals gain credibility and respect. “The presence of platforms is the ingredient that has made arbitrage so universal. “Platforms are places where buyers and seller meet, concurrent tasks collaborate work, lovers exchange happy notes, and policy makers and dissentients make their point of view know to the world.”
The creation of platform provided the means to create the invisible continent. “The emergence of a new array of platforms is most significant, therefore, because it changes the constraints on companies”; “platforms thrive by being open to all partners”; “customers drove open platforms”, “platforms open up avenues of commerce”; “40% of the $800 billion by consumers using credit cards will shift online by 2005”; and “customers want reliable neutral and unbiased platforms”. Platforms act as a one stop shopping port. Unreliability does not stop the purchase of products, as long as, the site is trustworthy. Platforms seek oligopoly; platforms give clout and bargain discounts; “no platform hegemony is guaranteed”; “once a platform reaches status of oligopoly, it will probably not have many competitors”; “the most popular platforms support the largest number of other products”; “it is always easy to identify the most popular platforms by the crowds they attract”; and “your better off on concentrating on niches in your category”.
Capitalists of the invisible continent will accumulate money, as governments will have less hold over their wealth generating process; cyber capabilities will provide accurate, relevant, and timely information for exported work assignment, product orders, and service requests; the network is open and expected to grow because the a wide range of products and service will be handled by the platform; hegemony results from oligarchy and dominance in a niche or sector; and capitalist will prize the long term profits, stability, and leverage higher multiples of earnings.