Chapter 1: The Changing Global Power Balance: Challenges for European Firms – An Extended Essay

The aim of this chapter is to provide an overall perspective of the issues related to the global changing power balance, taking a more essayistic style, to set the scene for the research articles brought together in this volume and to identify avenues for promising and relevant IB research now and in the future. The chapter includes six sections. The first three sections provide a longitudinal perspective of the changing global power balance, and advance ideas regarding its evolution. They address how global institutional and political developments have been addressed by academic research, including IB research. The first section contrasts contrasts the IB contexts and dynamics between 1993 and 2023; the next section provides a historical retrospect of the changing global power balance between the two main contenders (USA and China); and the third section discusses how scholars have been trying to assess the likely consequences of this rivalry for the future of the world economic system. In the next two sections, the focus turns to Europe: how Europe fits in this changing and fracturing world and the likely implications for international operations by European firms Assuming that firms’ moves are based on managerial perceptions, the analysis is framed on the basis of three inter-related considerations: capabilities, location decisions and partnerships. The chapter concludes with a summary of the key issues addressed by the articles included in PIBR#19 as a guide for readers to select relevant articles and insights for further research.