2023-07-25 15:22:32
Updated Tuesday, July 25, 2023 – 15:22
We are facing a slow globalization (products) and a fast one (services).
Frame from the film ‘The gods must be crazy’,
Globalization, although it is mainly an economic concept and an intrinsic characteristic of our economy, has a high social component. According to the World Economic Frum, it is the process by which people and goods move easily across the borders of different countries. It is characterized by the non-existence of barriers -or the fact that they are scarce- that slow down the flow of products and services between nations, allowing, in practice, the integration of markets. The theory is simple and its advantages are clear: global trade reduces costs, spreads knowledge and helps economies of scale.
Supporting its rise by relevant positions such as that of Ronald Reagan in his 1988 speech: “Here, in the United States, we must take a moment to recognize that one of the key factors behind our great prosperity is the policy of open trade, which allows Americans to freely exchange goods and services with free people around the world.” And, later, Bill Clinton ratified that “it is very important that China enters the WTO to guarantee that its markets are open for us and thus we will open our markets to China to promote stability and peace in the world, increasing exchanges to the maximum”.
An unstoppable phenomenon, which some economic analysts dared to say was responsible for between 5% and 10% of world GDP, that is, more than Japan’s economy.
Globalization has projected an evident positive impact by boosting social welfare in developing countries, but it has also caused the relocation of industries with job losses and changes in lifestyles in the places of origin. Reacting to this last effect, some countries opted to reduce corporate taxes to attract global investment, thereby giving governments less revenue to spend on social welfare policies. A vicious circle that, along with economic stagnation, closed in on Western governments, and many of their political leaders felt that globalization made them vulnerable and benefited only a minority.
The financial crisis, followed by Brexit, the Trump era in the United States, which started a trade war, continued by the harsh episode of the pandemic, and finally the war in Ukraine left globalization in shock, or perhaps dead.
However, there is a part of globalization that has been oblivious to all these circumstances. Faced with the globalization of products that reached its maximum in 2008, the globalization of services has not stopped growing, currently representing around 15% of world GDP. They include a high demand from developed nations for all types of intermediation, starting from traditional service sectors such as finance and insurance, with increasing diversification into new areas such as information technology and business process outsourcing in healthcare, education, tourism, and creative industries.
This new globalization does not link production and logistics chains, making it more difficult to build entry barriers since the development of digital platforms allows companies to offer their services to a global client.
We are simply facing a new way of approaching business and this is observed in all spheres, including culture. Hollywood and American pop face alternatives such as Bollywood productions, Instagram videos and Turkish soap operas. One of the most watched music events is the famous South Korean Squid Game, while the world’s most downloaded app is TikTok and the largest online fashion retailer is Shein.
The consequence of all this boom is that global data traffic, which skyrocketed during the pandemic, does not stop growing, and is expected to reach around 780 exabytes by 2026, a figure that will more than triple that of the year, which we created a record, in 2020.
The seventh art, cinema, is a good precursor of our society and the film The God Must Be Crazy (Botswana, 1980) is a good reflection. It is a comedy written and directed by Jaime Uys, which narrates how one day a classic glass bottle of Coca-Cola falls from a plane on an isolated tribe of bushmen who live happily in the Kalahari desert, and from there a series of problems are unleashed based on the globalization of our western customs, chaos that ends when they get rid of the western symbol.
Essentially, we are facing two globalizations, or rather, facing a new globalization with two speeds, a slow, controlled one, the globalization of products, where governments pay attention that it does not threaten the social well-being of its citizens; and rapid, accelerated globalization, that of services with unstoppable growth that leverages development. End of the old globalization, long live the new.
According to the criteria of The Trust Project
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