Page 197 - Global Project Management Handbook

MANAGING RISKS AND UNCERTAINTY IN MAJOR PROJECTS 9-3

Ideological shifts Macroeconomic trends:
favoring privatization,
Public debt Deregulation
competition and withdrawal Globalization
of governments

Changes to regulatory Emergence of a relational New competencies and
framework to venturing approach to the strategies in project
stimulate entry and development and delivery sponsorship and
competition of major projects development

New development models
BOT
New competencies in Technological change
financial engineering Concession
Private finance
Collaborative development
FIGURE 9.1 The new global environment.

Deregulation and Globalization of Markets
Since the late 1980s, a global trend toward deregulation and a reduction in barriers to inter-
national trade has affected the world economy. Many industries have been deregulated, and
many public monopolies have been broken up or reduced in scope. Many markets
worldwide have become more accessible to foreign firms. Bilateral or multilateral trade
negotiations have been a major part of this trend to globalization. The result has been

tremendous increases in both international commerce and investment.
Regulatory regimes encourage investments. In addition to participating in trade nego-
tiations, some countries also have taken initiatives to stimulate interest in particular types
of projects by creating or modifying the country’s regulatory regimes. Conditions that
apply to foreign investment and regulatory regimes were modified to allow private
investment in what were previously areas reserved for state monopolies. Many countries
have set up regulatory regimes to facilitate particular types of projects, BOT projects in
particular.

Development of New Competencies

Responding to these initiatives, operators, concessionaires, and entrepreneurial compa-
nies from around the world became more active in many more markets than before. Over
the last two decades, many firms involved in major projects in different capacities have
been exploring new markets and new modes of project delivery. Many of these firms
have built competencies in the initiation, organization, development, financing, design,
execution, operation, or ownership of major projects.