Barriers and Benefits of Globalization

As you'll remember, last month we began our investigation into the impediments to globalization in light of the recent Summit of the Americas in Quebec City. This month we will continue our series with an examination of the challenges both technological and social facing the planet's progress toward this objective.

While last month's article started out as a bit of a rant (I have kind of built a little reputation for this I suppose) as a result of recent communications frustrations on a trip to Asia, the time since has permitted me the space to broaden my perspective. As a result, I thought that I'd begin by looking at what globalization actually entails.

So, globalization is the ability for me as a business person to access global markets in a manner which transcends political barriers and sell my goods and services within in them, right? That should be good for everybody, correct? So what's the problem? We just have to get the IT infrastructure in place and we're off to the races, right? Well not exactly. While IT is definitely a chief enabler of the push toward globalization, it in of itself is insufficient to bring it into existence. This has to do with the fact that globalization as defined above is inaccurate. So what is it then?

Well, in order to understand what globalization truly is, we have to look at its potential effects and those advocating change vs. they who desire maintenance of the status quo. If we step back just a little we will see that once a conduit for trade is established, electronic or otherwise, goods and services may flow both ways – not only do I have access to foreign markets, I have just opened  the door to foreign competition. So globalization levels the playing field permitting all world citizens access to the same potential client base – a good thing right? Well, how as a small business owner in Canada do I compete with my counterpart in Bangladesh given respective labour costs? Barrier.

Let's step back a little further... Who are the main actors in the thrust toward globalization? – western nations, in particular, the United States. Why is that? Certainly everyone desires access to global markets and resource pools but it has been proven time and again that once corporations invest in third world countries to capitalize on cheap labour markets, they soon prosper and eventually become your competitors. Take a look at Japan, Korea, Hong Kong and Taiwan as examples. So what interest should the west have in that? In truth, globalization is as much about the export of ideology as it is about commerce – because the two are inexorably linked, particularly from an American perspective.

At no other time in history has one culture so completely dominated the global cultural and economic landscape. America has, in part, approached and achieved this position of leadership in the post WWII era by way of efforts to homogenize global ideology to that which embraces basic human desire (greed) vs. those which run contrary to instinct including communism, theocracy and dictatorships. As these later forms of government often inspire zealotry, conflict is inevitable with they who espouse differing philosophy. Conflict is bad for business (unless you're an arms dealer). The difficulty is that as a result of this policy and accompanying superior attitudes, Americans and their notions are almost universally despised by those within these nations and commonly regarded in an unfavourable light even by allied states which understandably fear the loss of their own culture. Big barrier.

Let's take a step way back. Let's prognosticate that it's 2100 A.D., globalization was inevitable and has indeed taken place - with all its ramifications. Every citizen of the planet has access to the same economic opportunity and competes on a level playing field in the new knowledge based economy. We have elevated poorer nations to equal status resulting in drastic reductions in hunger and disease, permitting their citizens to embark on pursuits loftier than mere subsistence. Obviously regional jealousies and covetous designs on property will additionally be reduced commensurate with improvements in economic station, leading to a far more tolerant and conflict free planet. Great! It's Star Trek! But what will have to occur in advance of this seeming Utopia? Once again we're back to standardisation... the problem being what must be standardised.

At the outset, a common currency must be established – the American dollar being the prime candidate. The recent Mexican peso crisis underscores the potential for economic turbulence in major emerging markets to wreak havoc on global financial stability. In a true global economy such an event may have initiated a disastrous cascade effect. The ubiquity of the greenback and the advent of the euro clearly point toward future currency convergence. Obviously, a level playing field requires a common set of health and environmental standards. Models of governance must be in large standardised in order that all might gain equal opportunity to the benefits to be realised by participation in the global economy. As a result, corruption on a grand scale as is seen for example in many Latin American and former Soviet states cannot survive true globalization. All enormous barriers.

Clearly elimination of trade barriers is a very small component of true globalization. So what does all this have to do with technology? Well, it all comes back to the ‘net. The Internet is not merely a medium  whereby one obtains one's horoscope, weather reports and stock quotes. It isn't a just handy tool for shopping or even selling goods. The Internet is primary agent for global change, being both a conduit for dissemination of packaged and productised ideology as well as an enabler of global commerce,  international collaboration and collusion. It is where future wars will be waged and perhaps, if we're very lucky, where ultimately peace may be won.

Orignally published in Ottawa Computes! magazine, June, 2001, by technology columnist, Ray Richards.

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