While nobody is certain what the future will bring, we do know that the Internet recognizes no national borders. Electronic commerce is global in nature, so the Internet can’t help but dramatically increase international business. The ever-changing technology in electronic commerce and the introduction of new hardware, software, and service technology force businesses to quickly adjust their basic business strategies. Companies who want to participate in the worldwide electronic commerce revolution must adapt their electronic service capabilities and products to the requirements of the electronic commerce marketplace.

42. One result of e-commerce is more competition in products and prices.

43. The potential of the Internet goes far beyond displaying and promoting products.

44. Paying for products and receiving payment through the Internet are now very effective.

45. The problem with the Internet is that it does not recognize international money.

46. The Internet cannot greatly help international business.

Passage 2

The global economy is becoming more integrated than ever before. A half-century of emphasis on free trade by major industrial countries has resulted in the freer flow of goods, services, and capital among nations. As a result, companies both large and small now view the world, rather than a single country, as their marketplace. Also, companies have dispersed their manufacturing, marketing, and research facilities to those locations around the globe where cost and skill conditions are most favorable. This trend is now so pervasive in industries such as automobiles, aerospace, and electronics that it is becoming increasingly irrelevant to talk about “American products” or “Japanese products”.

Consider what happens when an American consumer buys a car. The engine is produced in France, the storage battery in Japan, the seat belt in Austria, and the body is assembled in Germany. Is it a “German product”? Obviously not — but neither is it a “French product”, a “Japanese product”, or an “Austrian product”. Like an increasing number of the products we buy today, it is an international product.

The increasing integration of the global economy has had many consequences. First, the volume of world trade grows at a faster rate than the volume of world output.

Second, foreign direct investment is playing an ever increasing role in the global economy as companies of all sizes invest in overseas operations.

A third consequence is that imports are penetrating deeper into the world’s largest economies. The growth of imports is a natural by-product of the growth of world trade and the trend toward the manufacture of component parts, or even entire products, overseas before shipping them back home for final sale.

Finally, the growth of world trade, foreign direct investment, and imports implies that companies around the globe are finding their home markets under attack from foreign competitors. This is true in Japan, where Kodak has taken market share in the photographic film industry away from Fuji and in the United States, where Japanese auto makers have captured market share from GM, Ford and Chrysler.