Globalisation

The world in the 21st century is very different from anything we have experienced in the past. The advancements in technology and primarily the internet and the .com boom has revolutionised everything we do. While globalisation is seen by many people as an evil that allows multi nationals to take over the world, it is quite the contrary. It has enabled the small players and start ups to have access to resources that allow them to compete in the global market.

Take Amazon as an example, while it may have a significant market share for online shopping in the US and UK, what it has enabled smaller companies to do is to utilise the Amazon website to market products to a global audience and allow Amazon to worry about supply chain issues, while the retailers can focus on providing the best products to clients.

Globalisation allows for basic processes to be commoditised, outsourced and automated. If it can be done cheaper and more efficiently, it will be done. What this enables people to do is focus on the aspect of their company or work that is truly adding value. So if you are a charity trying to raise money, you focus on raising money and not how you will process the transaction – because paypal will take care of it for you.

This is what Globalisation is truly about, providing people with access to a global market at little or no cost, when doing this on their own would have made the venture too expensive to even consider. It is about creating new opportunities and being able to adapt to the rapidly changing global market.

Most people who may be against Globalisation, don’t understand it enough or fear that they may lose their jobs and they have every reason to be worried. The answer to this fear is not to resist this change, but instead embrace it and make sure you have the necessary skills to benefit from this change. Taking the mobile industry in India, for example, the cost of making a phone call is so low that the providers have very little scope to make money from it, their answer? “Value added service”, this is where they provide consumers with everything from data capabilities to special ring tones all at a small premium which people are willing to pay. Surviving in this new world is all about adaptability and innovation. There is no room for mediocrity or sitting back and hoping that what worked for you in the past will work in the future.

I am by no means saying that large corporates have sometimes exploit the advantages they have, however, the net effect in my opinion is a positive one. Even the multi-nationals however, and very quickly losing this advantage and on a level playing field with the rest of the world. They are being watched by everyone, a small mistake and the damage to their brand and reputation has a real impact on their revenues. Even if they are not driven for social reasons to be responsible they most definitely do so for economic benefit. It’s a win-win whichever way you might look at it.

Globalisation is creating a level playing, a place where it’s not about geographic locations but the quality and efficiency with which you can produce a product or provide a service. China for example exports more to the USA than Mexico, who’s right next door. We are moving towards a world where the focus of any company is on the final product rather than transport or other overheads (unless of course you are in the transport business).

A lot of the points I’ve discussed above were brought to light while I was reading the book “The World is Flat” by Thomas L. Friedman. He goes into a lot more detail on some of these points and if anyone is interested in Globalisation or anything to do with how we ended up in this complex and high-tech 21st century society, I’d strongly recommend it.

When I have more time I hope to write a better researched post on Globalisation, but for now, these are just some thoughts and my opinions…

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