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The future of commercial diplomacy

Kosters, M.J. (2013) The future of commercial diplomacy.

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Abstract:This research describes the predicted future developments in commercial diplomacy and their implications. Commercial diplomacy is defined as “a service to the business community provided by a network of government actors, which aims at the development of international business”. The increasing interest from many countries in the value of commercial diplomacy and the limited body of scholar research on the subject are the primary motives for conducting this research. Our main research question is: “How do practitioners foresee the future of the actors and their organisation and the activities of commercial diplomacy?” Following a literature review, a two-round Delphi study was conducted. Expert practitioners were interviewed on the future of commercial diplomacy. The interview questions in the first round concerned different aspects of commercial diplomacy: its activities, the actors and their organisation, effects of the global debt crisis on commercial diplomacy, and spending and budgeting. In the second round, the experts completed a questionnaire, in which they rated all of the developments from the first round with the use of a 5-point Likert scale. A ranking based on the means and standard deviations of all of these developments was subsequently prepared. The main results fall into two categories: commercial diplomacy actors and their organisation and its activities. The analysis shows that the respondents expect that 1. actors will have to work faster, more professionally and efficiently in the future; 2. prominent political figures will be heading trade missions more often; 3. locally engaged staff will substitute for diplomats more; 4. foreign ministers’ interest in commercial diplomacy will increase further; 5. Asia will become increasingly important as a region of interest for actors. Concerning the activities of commercial diplomacy, the respondents expect that 1. commercial diplomacy will have a more central role in diplomatic policy and practice; 2. higher service levels will be expected if there are fees for the services; 3. commercial benefit will become a requirement of all embassy-wide activities; 4. Asia is becoming more important as a region of interest for activities; 5. the recession will lead to assigning priority to commercial diplomacy as a specific form of diplomacy. The predicted developments for commercial diplomacy have several implications. First, the economic recession is expected to have both a negative effect, through government austerity measures, and a positive effect, through prioritisation of commercial diplomacy above other forms of diplomacy. Second, commercial diplomats are expected to work more efficiently, and combine their own expertise with that of locally engaged employees. The final implication is that it is likely that commercial diplomacy activities and the presence of actors in Asia will be intensified, with challenges arising in the continent’s emerging economies. Commercial diplomacy can aid in overcoming the global recession through the promotion of international trade and investment. There is a need for all of the actors of diplomacy in general to cooperate more on commercial opportunities, and this is a shared responsibility. Many activities being conducted for other forms of diplomacy can be employed for commercial diplomacy as well. The field of commercial diplomacy would benefit from more research into the effectivity of commercial diplomacy, actor roles in commercial diplomacy and the use of locally engaged staff as commercial diplomats.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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