I spent last weekend under the blue skies of Porto, Portugal and the fresh Atlantic breeze while we all struggled under the gray skies and rain. Well, before I lose half of my audience to jealousy, I can say that I’m working on a corporate event about the uncertain future of globalization.
With supply chain disruptions and key trade links between the US and China still thin, the future of globalization will have a major impact on businesses entering recovery after COVID.
Many people I meet think the image of a shrinking earth (see logo above and cover image of “evenly”) is too pessimistic about the state of the world economy, but I think the current roadmap is the path we are on from globalization (from the collapse of communism to the collapse of Hong Kong ) between 1990 and 2020 to a new, largely undeveloped, multipolar world order. ..
To name this phase or path, I suggest “Interregnum”. This is the English term for adjournment during a period of reign (especially between the end of Charles I’s reign and the time Charles II ascended the throne between 1649. 60 – By the way, this is very much related to equalizer).
Today Interregnum is in the midst of a paradigm shift (see The Structure of the Scientific Revolution by Thomas Kuhn) and is characterized by noise, uncertainty and many conflicts between the “old” and the “new” (financial). Is the emergence of “DeFi” or paradigm).
In an empty era, no new leaders have emerged (think US, Russia, China), and the rigid “rules of the game” of the New World Order have not changed (rules of mandatory participation). no deal) (e.g. in cyber warfare).
This is not an optimistic diagnosis, but a realistic diagnosis and we should also question the idea that everything in our world works.
Also in the context of globalization, an interconnected and interdependent world where countries are ready to sacrifice their sovereignty for better trade relations, some of the novelties of which can be seen as the return of globalization. There is a trend, but not really doing it.
One of them is the business cycle turnaround which has received significant government spending and support from developed country central banks. In fact, an interesting quote from America’s major bank earnings announcements is that households are rich in money, which will increase consumer spending over the next year. Instead, I think China is now nearing a recession.
In general, I believe that an increase in economic activity does not mean a resumption of globalization. Globalization is a very specific model of activity, while many of the driving forces of globalization, such as the flow of people and ideas, have stopped when other, different models have emerged.
In general, there is a very curious relationship between globalization and the business cycle (see the NBER Business Cycle page). Before this wave of globalization began, the world enjoyed a regular rhythm of short business cycles. In contrast, the period of globalization was marked by the two longest periods of expansion (1991-2001, 2009-2020) in modern economic history, interrupted by the dot-com bubble and the global financial crisis.
Part of the explanation is that the positive effects of globalization: China’s export deflation, growth in emerging markets, growth in global consumption, and international financial risk intermediaries are all stages in the expansion of the business cycle. It helps suppress and defend.
Another positive trend that stands out is the acceleration of the digital economy. From an investment perspective, this is both attractive and destructive. It is tempting to say that the rise of the digital economy was the forerunner of the rise of globalization, but I believe that the effects of digitization are largely confined to industry and nation states.
Imagine someone referring me to hundreds of thousands of Indian “remote doctors”. You will confuse Indians instead of informing the British health care system. Also consider the huge amount of data created by applying 5G and then 6G to cars. Many of these uses and stores will be local (at least in Europe) rather than global.
However, the idea that technology is changing the way we do business is very important and provides clues about what will replace globalization. For companies, globalization means the opportunity to optimize their operations through a network of activities. The Mexican plant is supplied and sold to consumers in North America by R&D Zurich from its headquarters in Berlin, inspired by marketers in Barcelona. ..
The effective end of cheap labour, the emergence of safe trade as a political issue, and advances in robotics are likely to slow the “out” trend. Even more interesting is what happens to consumers and employees. Most of them “go home” but even with a margin there is a sense of security that they can work in the city of their choice and have more services online (than the law). Tips for virtual clothes test).
I don’t know what effect this will have in the long term, but I think in Europe at least the flow of people will focus on the second and third cities (Bordeaux, Porto, Munich, Malmö, etc.). growth. Regarding the issue of regional politics, one of the sub-trends that I discuss is the increasing number of applications that aim to make participation in regional democracy easier and more innovative, such as Polyteia, Citizen Lab, Civocracy, and Fluicity.