Balancing the opportunities and challenges of the new era of globalization with social inclusion and sustainability goals for all stakeholders. (From International Banker)

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By Dr. Ivo Pezzuto, Professor of Global Economics and Disruptive Innovation at the International School of Management (ISM) of Paris / March 14, 2019 / International Banker (Authoritative Analysis on International Banking)

QUOTE

Despite the rising threat to the global economy of protectionism, populism, anti-globalization and anti-immigration movements, and the social and economic concerns about macroeconomic imbalances and other serious challenges, it seems that Globalization 4.0 is still achievable.

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Notable challenges include:

...central banks might also find themselves in a potentially challenging position as governments’ debt traps may continue to grow, while economic growth and productivity improvements may remain stagnant.

...aging societies and challenges related to the sustainability of retirement systems; risks of global economic slowdown and flattening (or inverted) yield curves; rising inequality and sluggish improvements in social mobility; geopolitical tensions and the risk of trade tensions, trade wars and cyber-attacks; climate change and ecological sustainability issues.

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There is no doubt that many less skilled and competitive people have been caught unprepared or unable to react to the revolutionary pace of globalization and technological disruptions and have been unable to cope with the challenges of the New Normal. Thus, a large number of these people have eventually surrendered to the idea that only a nostalgic return to the past can protect them from the risks of an unchecked model of globalization. Many have advocated for more protectionism, more defense of local interests and less globalism, thus confusing, as correctly stated by Klaus Schwab, globalism for globalization.

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Globalization has certainly improved employment rates, living standards, wages, human rights and quality of national institutions and infrastructures of many emerging and developing markets. Globalization through its four waves has helped lift more than one billion people out of extreme poverty and turned their economies into attractive targets of firms’ growth strategies. Some of these markets are becoming the innovative and high-growth-potential markets of the future.

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The 2018 Global Competitiveness Index 4.0 of the World Economic Forum (Figure 7) reveals that the innovation powerhouses in the world remain those countries that have developed such strengths as innovation capabilities, high levels of investment in R&D (research and development) and technological innovation, positive attitudes towards entrepreneurial risk, advanced financial systems and venture-capital expertise.

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Conclusion

When the Creative Destruction wave breaks with its revolutionary innovation power on traditional and outdated business models and technological solutions, it often carries with it the force to disrupt entire industries and economic and social models.

There are many reasons to be optimistic about the promising future scenario of international business, thanks to the unprecedented and exciting growth opportunities that breakthrough innovations and technological developments bring to firms, households and overall global prosperity.

This is a likely scenario as long as the struggles of the major competitive forces in the global economy … do not turn a potential synergic and win-win road to global prosperity into a reckless and ruthless zero-sum game.

It is essential that policymakers and regulators, multilateral institutions, citizens and stakeholders continue to play a critical role in assuring that the pursuit of long-term goals of improved prosperity will bring economic and social benefits and inclusive growth…

UNQUOTE

READ THE ARTICLE…

[RP: You and I cannot govern the world. 

 1.       We can look at the setback we have endured since 1970 (the nose-bleeding decline in social mobility - Figure 5) and the top score of the USA in Global Competitiveness (Figure 7)…

2.       We can admit that Globalization is a fact we have to deal with and that globalist and anti-globalist opinions are irrelevant…

3.       We can draw the conclusion that personal work and career success depends on keeping up with the factors driving Globalization….

4.      And we can recognize that competitive, successful economies can’t waste any human capital.

 You and I can become more “globally agile” and figure out how to prosper in the globalized economy AND how to better represent our beliefs and values in the World as it is.]

PS Proof for statement #4 is available but it’s not a point addressed in this article.

 


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