Digital Globalization– New Era Of Global Flows: Changing Rules– Rise of Connectivity, Decline of Cross-Border Trade…

Globalization is the ever-increasing integration of– people, cultures, business interests, innovation, governments… But its a contentious issue with people on one side, arguing that globalization is changing the world for better– propagating a heightened level of economic growth, improving human rights, improving access to technology, goods and services… On other side, critics argue– its destroying indigenous cultures, increasing inequality, deteriorating interests of workers, diminishing sovereignty of countries, exploiting under-developed countries to further the interests of the few developed countries…

The world is in midst of a rise in protectionism– anti-trade policies are at highest point since 2008 financial crisis. According to Fabrizio Minei; in recent years, the amounts of money that are flowing across-borders has drastically decreased, which represents drastic shift from international commerce, with localized markets more dependent on domestic consumption for growth… There is a global trend towards– regionalism, with like-minded nations banding together in a club of traders, or mini-lateral groups operating as most favored-trading partners. According to Joshua Cooper Ramo; localism is on the rise– local banking, local production, local sourcing for food, restaurants… 

However others take different view; they say rather than signaling the death of globalization, the decline in traditional metrics signals birth of a new digital globalization– one that is re-balancing geopolitics with geoeconomics… To succeed in the digital era, companies need to think about globalization in a different way, using different metrics, devise new frameworks to develop winning strategies… According to Jeff Immelt; it’s time for bold pivot, developing  strategy that focus on localization… but localism combined within a global footprint…

In the article Digital Globalization by James Manyika writes: The conventional wisdom says globalization has stalled, but even though the global goods trade has flattened and cross-border capital flows have declined sharply since 2008, globalization as world connection is not in decline; rather it’s entering a new phase defined by soaring digital flows of data, information… Remarkably digital flows that were practically nonexistent just 15 years ago, now exert a larger impact on GDP growth than centuries-old trade in goods. And this shift makes it possible for many organizations to reach global markets with less capital-intensive business models… Although it too poses new risks and policy challenges as well…

The world is digitally connected more than ever and it has changed globalization in fundamental ways… The amount of cross-border bandwidth has grown 45 times larger since 2005, and it’s projected to increase by additional nine times over next five years… as digital flows of information, searches, communication, video, transactions, intra-company traffic continue to surge… In addition to streams of data, information, ideas… these digital flows enable movement of goods, services, finance, people… Virtually every type of cross-border transaction now has a digital component…

International trade was largely confined to developed nations and large multinational companies… Today a digital form of globalization has opened the door to developing nations, small companies, start-ups, billions of individuals… Tens of millions of small, midsize enterprises, worldwide have embraced the digital economy and developed global e-commerce markets… Approximately 12% of the global goods trade is conducted via digital e-commerce. Even the smallest enterprises are digital global via the internet; 86% of tech-based start-ups report some type of cross-border activity…

Even individuals use global digital platforms to– learn, find work, showcase talent, build personal networks… Over a billion people have international connections on social media, and over 500 million take part in some type of cross-border e-commerce. In this increasingly digital era of globalization, companies can better manage cross-border operations in– leaner, more efficient ways… Using digital platforms organizations can sell into growing global markets, while keeping virtual teams connected in real-time…

Researcher find that over a decade, all types of digital flows acting together have raised world GDP by 10.1% over what would have resulted in world without cross-border flows. This value amounted to about $7.8 trillion in 2014 alone with digital data flows accounting for about $2.8 trillion of this impact. These digital flows are key for growth, as they expose economies to– ideas, research, technologies, talent, best practices from around the world…

In the article New Era of Globalization by ING writes: Globalization is like a fault line on the world’s ideological map: Most people are either passionate supporters or violent opponents of globalization–there is virtually no middle ground. According to Mauro Guillen; globalization is not a feeble phenomenon, it’s changes how world works– it’s neither civilizing or destructive, it’s neither monolithic or inevitable… but it does requires open-mind to understand it. The world has under-gone historic developments in last few decades; internet, smartphones, social media, rise of China, emerging markets, fast cheap travel. But the notion that globalization is a uniting and unifying force that eliminates nations’ physical borders is diminishing…

However there are many tricky issues and popular disenchantment with the concept of globalization. There is need for new (different) approach on how globalization economic and political policy impact working people, e.g.; economic equality of opportunity for middle class workers, more responsive governance to empower individuals at the local levels… without sacrificing the benefits of globalization. According to Lael Brainard; globalization is not a choice; it’s a force– driven by logic of markets and technology. It’s not product or service but process– it transforms the way people work and live and the very map of the world: You can’t stop it but you can shape it…

 

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