Friday 17 June - 1100-1150
How do business leaders plan to navigate the emergence of new regulatory barriers which threaten to halt the process of globalization?
Multinational companies have been central to the process of globalization in the last three decades, benefiting from the removal of barriers to trade and investment. Today, the emergence of new barriers – from regulatory and financial competition to data localization – may bring the process of globalization to a halt. How do businesses leaders plan to navigate this apparently backward trend? What changes would they most like to see?
The panel reviewed the positive case for globalization over the past 50 years – from the 1960s and 1970s when companies' international forays were self-contained through to the opening up of the 1980s to today, and the rising living standards it brought to millions around the world.
But there was also recognition that globalization accelerated in the years up to the financial crisis of 2008, and this caused unease that people were being exploited rather than empowered. At the same time, there has been a slowdown since 2008 – including retrenchment like more nationally focused financial regulatory regimes in response.
The panel felt this perhaps put the world at an inflection point in globalization. While there is growing unease, advances in technology and the realities of markets will still push economies in a global direction. At the same time, the old models – simply shifting production to lower cost countries for example – no longer work; people's expectations of businesses and politicians are changing. Sourcing and local engagement becomes much more important.
A big focus was education, which the panel felt is largely stuck in old models that are not transferring the skills needed for the workers of the 21st century. There was the belief that opportunity, especially for young people, was available, but that systems needed to respond to put them in a better position to take advantage of those opportunities.
But there was a lingering question about whether the forces pushing back against globalization could lead to an 'equilibrium' where it advances no further.
'By the end of the 90s, this was part of an everyday diet for very many companies: the economies of scale and, importantly, the economies of intellectual scale - the capability of transferring learning from one place to another.'
'Technology is fundamentally international. You can try to put borders in it, but ultimately it is international. Capital goes the same way.'
'I think the downsides [of globalization] can best be understood by thinking about what kind of people benefit from globalization and what kind of people don't.'
'Ultimately a healthy society is one that drives incredible productivity.'