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Ramesh Jude Thomas

The author is president and CKO, EQUiTOR Value Advisory

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BW Businessworld

Trumponomics Or Brexit? Take Your Pick

What globalisation has really done is to level off some of the glaring disparities between the tiny minority of rich countries and the large majority of those nations living in abject poverty

Photo Credit : Reuters


If there is any substantive issue at all in the circus called the 2016 US presidential elections, it is the implicit issue of globalisation. The waters have got really murky by the mudslinging. But the bigger issue looming large is whether an unfettered world with free passage for goods, capital and people is still a good thing.

So I was reading this week’s cover story in The Economist on the theme and asked myself three basic questions which I have since been grappling with.

The first question goes right back to the beginning. Where did this whole idea of globalisation begin? Why did it happen?

According to an outstanding piece of research compiled by Nayan Chanda of Yale Publications in his book Bound Together there were essentially four compelling forces that set into motion the relentless process that we now lament as globalisation.

Trade: The idea of that I can extend sourcing and selling beyond my village, town or market place into far off lands
Conquest: That me and my warriors can look further afield for people and places to be captured and subjugated
Exploration: That there must be new places to be discovered on the other side of the ocean waters
Religion: That there may be folk in many places who could be brought under the fold of how we interpret God.

This has evolved over a couple of millennia or perhaps more. This brings me to my next question. Where it has brought us today?

In 21st century world that we live in, even with strong domestic considerations, both political and economic, there is a surprisingly large exchange of capital, goods and services as well as manpower. In a globally buoyant economy all three were considered as blessings. Under sustained compression of GDP numbers that argument has been turned into a curse.

So is it a bad thing after all? Does Trump, the Brexiters and the right wing in Europe really have a point? Is it about economics or xenophobia?

Let’s say this was written from a Chinese or Indian perspective. The fact is eight countries (not more) of the 200+ that the UN recognises were controlling 68 per cent (not less) of the world economy before the rise of India and China. And this is not the 1 per cent story. The per capita nutrition (calories) consumption in the US is 3,639 Kcal while the consumption in India is 2,455 Kcal (which is one of the lowest in the world).

What globalisation has really done is to level off some of the glaring disparities between the tiny minority of rich countries and the large majority of those nations living (for the most part) in abject poverty.

But what do you tell the families of 1,600 American tyre workers who lost their jobs to Chinese imports or the thousands of after sales service agents who were sent home in favour of Indian call centres.

I am not so sure it is either or. Because by its very nature, evolution (economic or physiological) is cruelly selective and some people will be excluded. But how do we make this a softer landing? How do we retain the self-worth and survival of those rejected by the evolutionary impact?

Here is a three-pronged approach that might “usher” all the stakeholders into the economic evolution process, rather than “riot control” it.

The first and fundamental aspect would be to focus on our education mechanism. And make a basic shift from informative education to formative learning. What a brilliant UN diplomat recently called filling the mind vs forming the mind. This will ensure that young people grow up with the ability to think solutions rather than apply learning, providing for careers that are not just high quality repetitive but smartly adaptive as well.

The second would be to foster a startup culture that encourages true innovation and not just renovation. Have regulatory frameworks that will not provide seed capital unless and until innovation is palpable. This will avoid the rush of precious innovation capital into the hands of greedy copycats who just want another piece of the investment action. Combined with the first, it provides a potent weapon that draws on an education system which is now solution driven.

Finally, change the pension mechanism from an age focus to a redundance focus. There is a Moore’s law at work in the evolution of the economy too. It does not wait for you to get old. It will hit you at any time in your well-planned career. Mid-career lawyers and doctors are today worrying about what Watson will do to them. And hence age may be a blindside. On the flip side, take Amitabh Bachchan. Look at how many times and in how many ways he continues to invent himself. Carlos Santana, Mercedes Benz, etc. But yes, not everyone can or will reinvent. But perhaps the redundance paycheck will put their children into an innovative startup sooner than later.

And life will go on!

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Magazine 31 October 2016 Brexit donald trump trade