Far reaching implications of globalisation

GENERAL MOTORS produced more than 9 million vehicles in some 170 countries last year alone. About four lakh workers in 40 nations assembled over 5,000 parts to produce a car. Materials weighing 180 million pounds were delivered to GM from 12,000 sources in a round-the-clock, just-in-time environment. GM manufactures vehicles in more than 200 assembly facilities on six of the seven continents. And 14,000 dealers across the globe help deliver these vehicles to the marketplace. And GM expects 60 per cent of its future growth will take place in eight developing markets that include India, China and Russia. I could not have found a more powerful example to start an article on globalisation!

Shifting gears to quote a personal example — a few months back, my five-year-old daughter wanted to speak to my husband, who was then in the U.S. It was early morning here, and so she surmised that it would be night in California and hence a good time to call! In her own way, she had understood time zone differences, one of the driving forces behind globalisation of industries.

We are today living in a borderless world, a world where physical distances matter little, time zone differences are an advantage rather than a hindrance, and technology has transformed the way individuals as well as businesses communicate with each other.

Convergence of communication and Internet

Today's era of globalisation has been accelerated through advances in, and the rapid convergence of two areas of information technology — communications and the Internet. It has also been facilitated, not insignificantly, by the increasing power of microchip technology. These information technologies are weaving the world together like never before. These technologies allow companies to locate different parts of their production, research and marketing in different countries, but still link them together through computers and teleconferencing as though they were in one place. And, thanks to computers and cheap communications, people can trade services globally — from medical advice to software writing to data processing — services that could never be traded before. This has been amply demonstrated in the first wave of outsourcing of manufacturing to Asian countries, a second wave of offshoring of IT services and now by the blossoming demand for IT-enabled services.

Consider this, as a company operating in numerous markets, Infosys needs to provide a multi-lingual collateral and web site. A year back, company managers were racking our brains as to how we could accomplish this effectively out of Bangalore, and we discovered weblations, which, as the name connotes, is a web-only translation agency located in Spain and employing translators from across the globe. We have engaged them to carry out translations of our collateral and web site — we transact only through the Internet and have never met even once. But it works and beautifully too! Technology has ushered in an era of globalised mar-com delivery models as well.

Event managers

The communication revolution has not only made it easier for countries and corporations to reach farther, faster, cheaper and deeper around the world than ever before but also for individuals to do so. We required event managers to handle global event management, and decided to post the job requirement on infy.com. We got a good response that was not surprising. But what fascinated us was that we got some very interesting resumes from as far-flung places as Argentina. Something that could have never been possible in a less connected world! The information revolution has made it possible for people to act globally, communicate globally and seek employment globally. As the Economist editor, Mr. Frances Cairncross, predicts, the `death of distance' will be the single most important economic force shaping all of society in the first half century of this millennium.

Today's globalisation system has one overarching feature — integration. The world has become an increasingly interwoven place and today whether you are a company or a country or an individual, your threats and opportunities increasingly derive from whom you are connected to. A recent World Trade Organisation (WTO) report has predicted that the U.S. slowdown would impact no less than 20 countries that earn substantial export revenues from the U.S. Of Mexico's total exports, for example, more than 80 per cent go to the U.S. This accounts for 21 per cent of Mexico's gross domestic product. Some 75 per cent of goods imported into the country came from the U.S. Imagine the impact of the U.S. slowdown on this country! And, in today's globalised world, the linkages do not end there. As the LA Times aptly describes, ``Even a brief contraction in the U.S. economy, which consumes 30 per cent of the world's total output, will have worrisome repercussions thousands of miles away, thanks to the increasing interdependence linking Mexican assembly-line workers to Detroit auto makers and Taiwanese chip manufacturers to Silicon Valley computer companies."

Running a business in today's globalised environment requires one to wear a `systems thinking' hat and view the world as an interrelated web, a non-trivial issue as it requires a paradigm shift in the way we conceptualise and operate.

Globalisation has its own dominant culture, which is why it tends to be homogenising to an extent. The influence of outside cultures is also inevitable. My eight-year-old son, a sports fanatic, follows the American basketball championships as closely as India's destiny in cricket, thanks to ESPN and Star Sports, something quite unimaginable a decade ago. While there are concerns that globalisation may impede diversity, I would rather take the view that globalisation would make people more catholic in their views and broaden perspectives.

While this phenomenon of globalisation is sweeping the world there is a section that tries to desist these changes by clinging on to tradition and the old-world. Thomas Friedman alludes to this metaphorically in his book `The Lexus and the Olive Tree'. According to Friedman, the Lexus, built with the highest degree of automation and robotisation, symbolises the globe moving towards globalisation — the half that is dedicated to modernising, streamlining and privatising. And the other half continues to fight over who owns the olive tree. It is not surprising, therefore, that the pros and cons of globalisation is one of the most hotly debated and written about topics worldwide.

In conclusion, a universal and complex phenomenon like globalisation has far-reaching implications — positive and not so positive. But there is only one way forward — more integration, more interactions, more interrelations and more globalisation. The nations, corporations, societies and individuals that gear up and take advantage of the possibilities will be the winners while those that only debate the downsides could be left out of the race.

Sudha Kumar

Associate Vice-POresident, Corporate Marketing, Infosys

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