Globalism is still a key element to enterprise growth.
Trade wars, tariffs, reshoring, resurgent nationalism and the political manifestations of those activities might lead you to believe that the whole notion of “going global” is passé or even obsolete. Brexit and the demise of NAFTA and TPP might lend credence to the idea that “staying home” is indeed the best option, but that would be a foolish assumption.
NAFTA has been re-negotiated and replaced. At some point, the US will arrive at a meaningful trade agreement with China and the rest of the Pacific trading partners, and even the most ardent Brexit champions do not envision an end to international trade.
There are almost no compelling reasons not to embrace a global economic market that is based on fairness and equality for the participants. The fact is, some degree of economic integration on an international level is not only essential to everyone on the planet, it is inevitable.
The fact is, some degree of economic integration on an international level is not only essential to everyone on the planet, it is inevitable.
What’s the Problem with Globalism?
Recently, a domestic manufacturer of motorcycles announced the opening of a plant in Asia. The intention was to build motorcycles for that market and to place the production facility within the market where they would be sold. They were widely demonized for this action. Why?
This strategy was portrayed by too many people as another example of American jobs moving overseas. Some even suggested that this move was unpatriotic. However, this is simply not accurate.
The focus word of this outrage was “globalism” and the effect it was having on our economy.
Is globalism to blame for lost domestic jobs? Maybe some jobs, but certainly not as many as the lack of skills within the workforce or out-of-date technology within obsolete production facilities.
Types of Globalism
Globalism comes in several forms, and not all of them are noble. McMaken identifies two specific types of globalism, economic and political. It is important to understand and recognize both types of globalism.
Economic globalism is all about sharing ideas, products and cultures in a beneficial way. I remember when Pepsi and McDonald’s opened facilities in the Soviet Union. These products did more than supply hamburgers and soft drinks to Russians; they provided a positive example of Western culture. Both ventures were profitable and beneficial to all involved.
The second type of globalism, political globalism, is not so warm and fuzzy. Political globalism is frequently associated with advancing a national agenda or exerting the power of one nation state over another. Sometimes this is necessary, but too frequently, it is based on fear, ignorance and the identification of a strawman villain to beat up on or blame for domestic economic problems.
It is important to understand and recognize both of these global forces. Unfortunately, there is not a neat, bold line separating the two. Politicians are adept at appropriating almost any activity or action and holding it up as a cause or result of either positive or negative events.
Global Market Strategy: a Compelling Case for Manufacturers
A global footprint is essential within a global economic system.
Very few manufacturers create products that are exclusively fabricated from domestically produced parts or raw materials. Somewhere up the supply chain, there is an international border. Likewise, with the availability of massive air-freight networks, international shipping is fast and comparatively cheap.
Why not sell more? Why not expand? Why not protect your operation from local economic downturns? There really is no good reason not to embrace and actively nurture a global market strategy.
With technology, there is no market that is competitively beyond reach. CPQ solutions can facilitate product localization and regulatory compliance. Robotics can slash manufacturing costs, and e-commerce solutions can deliver marketing, sales information and transaction processing to remote markets without huge investments in feet on the street.
Economic Globalism at Home
Toyota, Honda, BMW, Airbus and countless other international companies are building production facilities in countries where their products will be sold—it only makes sense.
Toyota maintains one of its largest manufacturing plants about 70 miles from where I live. Toyota’s Georgetown, Kentucky assembly plant is capable of producing around 2,000 automobiles per day. The jobs that plant and others like it have provided represent a huge boost to the local, regional and even national economy.
These strategies are far removed from shutting down a plant in Flint, Michigan, and moving all of the jobs to Asia to exploit a dollar-a-day workforce.
Economic globalism serves all of us and delivers opportunity to all of us. A global strategy that builds true organic growth into your enterprise is always the right decision.