the range of knowledge-intensive skills or educational jnfrastructure necessary to compete as sites for information technology firms. 18. While losing these advantages on the production side, most developing countries also lack large enough internal markets to justify local production sites based on final sales figures. In fact, as cross-investment brings new threats to transnational corporation home markets, corporations concentrate their resources even further at home to battle foreign competitors for shares in major established markets, rather than exploring new market potential in the developing world. I •• • E/C.10/1990/5 English Page 9 19. This altered foreign direct investment pattern suggests the emergence of a technological convergence in the world's leading industrialized countries, and perhaps a small group of advanced developing or newly industrializing countries which are positioned to make similar progress. 11/ Among these countries, cross-investment trends will lead to more balanced policy positions between home and host country outlooks on foreign investment issues. The vast majority of other countries face an increasing gap between themselves and the industrialized countries, and the risk of being relegated on foreign investment issues to the position of an expectant but usually ignored suitor. While not dictating the flow of all foreign direct investment, the key factors of technological innovation, cross-investment competition and internal market size now appear to determine the location of new investment for traditional manufacturing transnational corporations as well as probably for service sector firms. 20. These competitive dynamics and their impact on geo-political alignments establish part of the environment for code discussions. Developed countries race a stronger imperative than in the mid 1970s to strengthen international co-operation on investment-related issues and their more balanced cross-investment positions may forge enough common ground to achieve positive results. 3. Changes in transnational corporations 21. In the mid to late 1970s, transnational corporations began a metamorphosis 
**Analysis**
The text appears to be discussing the impact of technological innovation, cross-investment, and internal market size on foreign direct investment and the competitiveness of countries. It highlights the challenges faced by developing countries in attracting foreign investment and the emergence of a technological convergence in the world's leading industrialized countries. The text also touches on the implications of these changes on geo-political alignments and international cooperation on investment-related issues.

**Category**
Industry, International trade