Turn Back Globalization?

Published on: May 21, 2020Social Entrepreneurship
Entrepreneurship Campus

By Entrepreneurship Campus

Turn Back Globalization?

Why we need more globalization, not less - open, fair and transparent 

It feels like a turning point. Global supply chains are disrupted, entire industries are threatened with standstill. The dependence on primary products for domestic production suddenly becomes apparent, as does the complexity of the processes and the associated risks. These also include essential medical products. A dangerous dependency, as the Corona crisis showed. What is more obvious in this situation than the near? Companies are considering how they can bring value creation and suppliers closer to themselves. Since March, the majority of the German population sees globalization more as a risk than as an opportunity. And politics and science also show understanding. Globalization has probably gone too far. 

Corona makes this trend towards de-globalization visible and noticeable. But there is more to it than just a virus. The rise of the populists, the conflicts in world trade - many governments have long since moved away from the principle of cooperation and introduced higher tariffs and restrictions. The corona shock is now accelerating the process. Does this tendency lead to a desirable development? 

For most companies, globalization was a radical program for cost-saving production. But it was always something more than that - it was a promise, it embodied a hope. Almost 40 years ago, Willy Brandt and Olof Palme argued that if we don't bring jobs to people in the South, then people will come to us. A correct prognosis, the first phase of which we have already felt. 

According to the UN, more than 70 million people are already fleeing the world. According to many experts, this number will continue to grow strongly, not least as a result of climate change. And these are just the ones who have to leave their homes . Added to this is the even larger number of those who want to set off to find better prospects elsewhere - just as many Germans, Italians or Irish wanted to go to America in the 19th century to start a better life. 

In October last year, 39 people were found suffocated in a truck near London. Vietnamese who originated from Nghệ An province in the north of the country. They risked their lives for the dream of finding better working conditions in a rich European country and being able to support their families. The 26 year old 

Pham Tra My kept in touch with her parents to the end. “I'm so sorry mom and dad. … My journey abroad doesn't succeed,” she wrote. “Mom, I love you and dad very much. I'm dying because I can't breathe. ...Mom, I'm so sorry." 

The families had taken out loans, the equivalent of about $30,000 each, to fund the risky, illegal venture into England. In addition to the loss of their loved ones, they now have to pay back this money. Huge sums by the standards there. 

Brandt and Palme's North-South initiative was about improving living conditions all over the world through economic cooperation. So it wasn't just about creating jobs, regardless of whether the working conditions are bad and the safety regulations are low, let alone environmental regulations. That was corporate globalization as we know it, and it failed on that score. A different approach is needed: to create jobs where there is home, so that people can remain at home. Jobs under decent conditions and under conditions that do not further damage the environment. 

It is a program worth promoting globalization for. Both sides, North and South, would benefit. 

And we can, says Jeremy Rifkin in his book on a Global Green New Deal. So far it has been reserved for large companies to establish contact between manufacturers in low-wage countries and customers in rich countries. It was companies like Wal-Mart or the big suppliers of textiles that were able to make this leap across customs and cultural borders. They were the beneficiaries, the true winners, of globalization because they were able to take advantage of the enormous difference between production costs there and selling prices here. 

Thanks to digitization, says Rifkin, it is now possible for us as individuals to get in direct contact with the manufacturers and do the business ourselves. We can thus bypass many of the global corporations that had been the essential intermediaries in 20th century economic life. If we connect directly with the manufacturers in the south, we make ourselves independent of the corporations that previously dominated the domain alone. And we can also let the other stakeholders participate in the process of exchange and its advantages. 

Yes, we can globalize. Great physical distance no longer means “far away”. In terms of communication technology, we are around 330 milliseconds away from a country like Vietnam. The cost of a call or video conference is practically zero. From a logistical point of view, sea transport from China or Vietnam is easier to manage than moving the same volume overland from Eastern European countries. And also the cost of sea transportation is lower. Not to mention the trucks that disappeared without a trace and their loads 

Such global initiatives can be carried out by startups or purchasing cooperatives, but also by social entrepreneurs who motivate their friends, neighbors and colleagues to become entrepreneurs together. Thanks to digitization, this is also easier and more manageable than you think you know from the past. There is help, tools and apps, often even ready-made components, that you can use not only for the entire logistics, but also for all administrative and technical questions. 

Trade is a unifying, peacemaking principle. Trade creates a win-win situation for both buyers and sellers. There are no devils, no enemies. There is no ideology, no religion that divides. 

When trade is fair—and neither side dictates or can dictate terms to the other—international exchange becomes positive. Transparency helps against the lack of fairness. And digitization creates transparency. We can claim them. And we can contribute to it ourselves. With direct contacts and purchases - i.e. without long and complex supply chains. Works also and especially under the conditions of a virus attack. Globalization in the times of Corona. 

We can tear down the edifice of global cooperation in the wake of Donald Trump, or we can help shape better globalization in the tradition of Willy Brandt, Olof Palme and all advocates of a cooperating world community. Open, participative, fair and transparent. 

The choice shouldn't be difficult. 

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