Professor of International Relations at the Kennedy School of Government at Harvard University, Joseph Nye looks at two primary types of change in relation to political and economic power.
The first, he describes as Power Transition. Literally, how it transfers from one state to another state (e.g. from west to east). The second change he calls Power Diffusion. Simply, how power is moving among all states, to non-state actors on the world stage, not merely from one player to another.
He debunks the common theory today that there is a key power transition from the U.S. to Asia, as he believes we should emphasize the ‘Recovery or Return of Asia.’
For example, in 1800, more than half of the world’s population lived in Asia and produced more than half of its products. In 1900, more than half of the world’s population still lived in Asia, but it only produced about 1/5 of its products. The Industrial Revolution was the catalyst behind this significant change. Europe and America became the dominant economic centre of the world. It is projected that in the 21st Century, there will be a return to Asia producing more than ½ of the world’s products.
Power Diffusion centres on the removal of traditional restrictions. For example, computing and communications costs have fallen one thousand-fold between 1970 and the beginning of the 21st Century. If the same change had occurred in relation to automobiles, then you would be able to purchase a car today for around $5.
Traditionally, you needed to be wealthy. Today, you need to be connected and have access to networks and the flow of information. Influence and power have become diffused.
Whereas traditional power tended to focus on coercion (‘sticks’) and payment (‘carrots’), Nye believes it is time to think more innovatively about getting others to want what you want. He describes this as ‘soft power’.
We achieve this by focusing our efforts around creating a new narrative, rather than on 'who wins'.
Nye argues that we need to change the narrative away from the rise and fall of countries—and for that matter, which company wins—as it is often misleading and unhelpful.
New narratives are established through organizing networks and building collaborative alliances that require groups to define their interests first and become transparent with their desired outcomes. The focus is on a win/win scenario, rather than ‘I win, you lose.’
This reality is just as important for organizations attempting to build partnerships across cultures. With today’s dominant, all-encompassing media and online social networks, compelling narratives are fast becoming more powerful than the traditional uses of power in acquiring new markets.
How well are you and your business using the art of storytelling to convey the value of partnership?
 Joseoph Nye, “Global Shifts of Power” (video). http://www.ted.com/talks/joseph_nye_on_global_power_shifts