Business globalization’s irreversibility is part of our new reality. Some people love it and some people hate it. Nevertheless, it is here to stay. While individual win stories and individual lose stories are never in short supply, what is more important is that we comprehend the growing complexities and dynamics of our global economy so that we can maximize the individual win stories and reduce the individual lose stories.
Adopting a positive approach, not relying on government to solve all our problems, and choosing to make smart choices for our global economy, we will maximize the opportunities for everyone. I like the way that Thomas Friedman summarizes our ethical, economic imperative in his classic work, The World Is Flat: A Brief History of the Twenty-first Century (New York: Farrar, Straus and Giroux, 2006):
“The great challenge for our time will be to absorb these changes in ways that do not overwhelm people but also do not leave them behind. None of this will be easy. But this is our task. It is inevitable and unavoidable.” (pp. 46-47).
Interestingly, in the wake of this increasingly complex business globalization, countries and governments are choosing a wide range of stances on how to adapt. Some are taking on a protectionist strategy and imposing trade tariffs and other barriers to the global economy. Others are fully embracing the opportunities and opening up every possible avenue to the global economy. And of course we find an often odd mix in the middle that is sort of trying to surf on two surfboards at once, not quite sure which one will give the superior ride.
I believe that over the long run, the countries and governments that embrace the global economy will ultimately create many more individual winners than losers. Higher participation intrinsically breeds more opportunities and where there are more opportunities there will be more winners. In a Bloomberg Businessweek editorial, the editors affirm (“A Vacuum of Leadership on Trade” 8/1/16–8/7/16, p. 8):
“One of the few things economists know for sure, maybe the only thing, is that competition spurs innovation and efficiency, making products better and cheaper and raising living standards in the aggregate. . . . Yet the claim that trade with low-wage countries is unfair in and of itself is both economically specious and morally bankrupt. When goods are made at lowest cost, it’s a win-win for trading partners. And make no mistake: Free trade is anti-poverty.”
To win in this global economy, companies must be willing to step up to the plate, executing strategy that capitalizes on the global economy. Even when protectionist governmental policies are present, creative companies can find ways legally, practically, and ethically to innovate solutions that work. Jeff Immelt (GE CEO) shares this mindset (“After Brexit, Global Is Local” Fortune. August 1, 2016, pp. 71–72):
“In the face of a protectionist global environment, we can no longer rely on governments to drive expansion; We must plan to navigate the world on our own.
We will localize. . . . A localization strategy can’t be shut down by protectionist politics.
Sometimes businesses can drive change faster than governments. It is tough to hate a company that is creating jobs.” (p. 72)
Government has not typically won any awards for moving fast. Smart companies, on the other hand, have a heartfelt motivation. They want to keep their marbles in the game.