Globalization? Re-globalization?
October 17, 2024 – Recently a lot of newsletters, reports, opinion pieces, and books are coming across my desk or into my inbox with the word “re-globalization” in the title.
Oh my…did I miss out? Am I behind the times? Is it FOMO?!
No.
It appears that for the past 2-3 years, “re-globalization” has been a trending point of discussion. Everyone is writing about it from the World Economic Forum, to Chatham House, the WTO and the Brookings Institute.
And there’s more. A quick search showed me there’s also a lot of writing about economic globalization, social globalization, technological globalization and cultural globalization.
There’s globalization 1.0, 2.0 and 3.0 (thank you Thomas Friedman), and the five forces that help us understand globalization 2.0 (guess we’re on our own for 1.0 and 3.0).
Some people have even completely written off globalization and said it’s a thing of the past due to populism, on-shoring, and global recessions.
Evolving Trade Patterns
However, contrary to popular belief and various authors, globalization is not a thing of the past, nor did the 2008 global financial crisis signify the end of globalization.
Research done by the WTO and IMF confirms that the dire threat of globalization coming to an end has been overstated and exaggerated.
Rather – like most things in life – things change as they age.
Our bodies change as they age.
The internet, the automobile industry and telephones all change and evolve over time.
Globalization is no different.
As countries economies shift, as people’s tastes change, and as civil unrest and climate change take place, so too trade patterns and trade relationships are once again shifting.
“Any color the customer wants, as long as it's black.”
- Henry Ford with regard to the color of the Model T
Change is a good thing. Imagine if we all still only had one car model and one color to choose from?!
The History of Trade
Way back when, trade routes like the Silk Road and Trans-Saharan routes facilitated the exchange of goods, ideas, and cultures across continents, relying heavily on land and early maritime travel.
In the 15th-17th centuries European explorers introduced new maritime trade routes led by the Dutch East and West India Companies and Christopher Columbus’ discovery of the Americas.
The industrial revolution of the 18th and 19th centuries sped up trade through steamships and railroads along with the telegraph for communication.
In the 20th century, trade liberalization, the establishment of global bodies like the WTO’s predecessor GATT, as well as the World Bank, IMF and other Bretton Woods institutions, further facilitated global trade.
Phenomena like containerization, the internet and e-commerce has only taken it to heights never thought possible.
(Re)Globalization
Today in the 21st century, parts of the world are well integrated while others are more fractured. Once strong- and outward focused economies, e.g. China, are focusing more on domestic growth. Other countries are joining forces and forming new trade blocs such as the BRICS.
And that’s okay. Change is normal. It may be a bit scary and unknown at first, but looking back throughout history, we can all acknowledge that change has also been good.
Today we live in an interwoven world – whether it is about people, products or crises…it’s all interwoven.
Our world is global. Our lives are global.
We need each other.
To quote a very famous Dutch teenager:
“There’s plenty of room for everyone in the world. Enough money, riches, and beauty for all to share. God has made enough for everyone, so let us all begin then by sharing it fairly.”
- Anne Frank
Let’s not throw out the globalization (or reglobalization or globalization 1.0, 2.0 or 3.0) baby with the bathwater.
Globalization, in whatever form you want to reference it, has served our world well. It can and will continue serving the world well. It just needs a few tweaks. Like the Model T.