Biagio Carrano / 22/02/2019 / serbianmonitor.com
(RP: This is a long article that weaves together several threads that a worth considering. Below, I have tried to isolate one of them, how the challenge “Globalization 4.0” poses to smaller, “emerging” countries can force them off the path towards global integration.)
For a country like Serbia, which has focused its development strategy on attracting labour-intensive foreign investments, the new scenario of globalization 4.0, centred no longer on the relocation of manufacturing activities but on the development of transnational networks for the creation of value in services, poses relevant issues for politicians and investors themselves.
This new form of digital globalization is much more driven by knowledge than by capital or labour costs. In this regard, the McKinsey Institute report on which much of the debate that emerged from the last Davos Forum is based shows that less than 20% of the exchange of physical goods is now determined by low labour costs.
…The Economist…has called this phase “Slowbalization”
If anything, the reasoning behind these fears is more subtle: if globalization and the global spread of forms of liberal democracy have gone hand-in-hand, at least in the hopes of those who promoted the phenomena in the 1990s, today there may be a real risk that the sovereign wave, that is sweeping through so many countries, may subvert or weaken the principles of global trade as defined in recent decades by the World Trade Organization.
The question we are trying to answer is: what place can Serbia have in this transformation, as a country that is still suspended between a direction of greater global integration and the constant fascination with sovereign political and economic proposals?
What globalization has Serbia experienced so far?
To tackle high unemployment and relieve the state from paying tens of thousands of wages in state-owned companies in liquidation, since 2001, successive Serbian politicians have aimed to attract labour-intensive investments by offering low wages, significant state incentives and weak unionisation. [RP: The policy known as “social dumping”]
The fact remains that Serbia is entering its future in globalization 4.0 with about 60,000 people who could be the driving force in terms of value creation in knowledge-intensive services. This is less than 3% of the country’s total workforce, a totally inadequate number.
Realistically speaking, today’s Serbia, suspended between immediate employment emergencies and aspirations to develop a knowledge-based society, is not yet a country ready for a transformation of its economy in the digital sense. But the challenge is not just economic.
If Western countries want to dialogue with a modern and civilized country, capable of curbing the brain drain and producing more and more technological innovation and social advancement, they will have to commit themselves to grow and prosper a class of innovators with the autonomy of portfolio and, above all, of thought. [RP: I read that as a veiled threat.]
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