The face of globalization is changing. The supply chain shocks many companies endured as a result of the COVID-19 pandemic caused organizations to reassess and, in some cases, entirely overhaul the way they conduct business.
Geopolitical tensions and macroeconomic headwinds have also pushed business leaders around the globe to revisit long-standing strategies and consider whether to nearshore or reshore in a bid to establish and retain resilience in anticipation of whatever might come next.
But for all the talk of a potential deglobalization trend, participants in the 3rd Annual Global Business Forum at the Jerome A. Chazen Institute for Global Business at Columbia Business School didn’t lose sight of the value of interconnectedness. They noted that, yes, there are problems stemming from the ways in which globalization has unfurled over the past few decades, but there are also opportunities — and these can have an overwhelmingly positive impact.
Here are three examples forum speakers highlighted.
1. The Power of Sharing Knowledge
“When we talk about the good and the bad in terms of globalization and its impact on public health and health of populations, people often immediately think of supply chain issues,” explained Wafaa El-Sadr, MD, MPH, MPA, professor of epidemiology and medicine at Columbia University, founder and director of ICAP, and the inaugural Dr. Mathilde Krim-amfAR Chair of Global Health at the Columbia Mailman School of Public Health.
“We think immediately of COVID; we think immediately of masks and vaccines. That's where everybody goes,” said El-Sadr, who has researched the prevention and management of HIV, tuberculosis, malaria, and emerging infections.
But there’s another side to the narrative, she said: When vaccines started becoming available, and when our understanding of COVID-19 started to grow, it became increasingly evident how important it was for countries to share knowledge and information.
When we lament the effects of COVID, we frequently forget that it actually achieved something remarkable, El-Sadr explained. The pandemic illustrated that the “sharing of information is absolutely fundamental to preserving health and to preserving our species.”
She added that while we often think of the metaphorical walls between countries, and the stories about richer countries hoarding vaccines while poorer countries struggled to secure supplies, we don't adequately appreciate the “value and generosity” that was involved in the sharing of information “between nations, between experts, between scientists, between public health officials, and between policymakers.”
2. The Value of International Talent
Beyond the pandemic, globalization is integral to the collective success of the international economy in other ways, speakers said.
“Our nation has been built on immigration,” noted Abby Joseph Cohen, a professor in the Business and Economics division at Columbia Business School and a former senior investment strategist at Goldman Sachs. Prior to the pandemic, she explained, more than half of the increase in the US workforce was driven by immigrants. In the United States, some 65 percent of the working PhDs in the fields of engineering and science are immigrants, as are about half of the Nobel Prize winners, she said.
“So, when we talk about immigration from a political standpoint, people are often thinking about the lower end of the income spectrum, which is also critically important because we have such an incredible need in our service industries,” Cohen added. “But we are really hurting our future by not allowing these really high-quality people into the country.”
3. The Bottom Line for the Economy and Market Power
Glenn Hubbard, dean emeritus and the Russell L. Carson Professor of Finance and Economics at CBS, provided a sober analysis of the state of globalization. While acknowledging the need for companies to reassess their presence, activities, and strategies around the globe, he concluded that the case for a globalized economy remains intact.
“In terms of the economic benefits of globalization, they're very high in rich countries, they're high in low-income countries, and they're high in emerging economies,” said Hubbard, who moderated the forum. “There's really no reason to talk about globalization dying or even becoming ‘deglobalization.’”
He cited the European Union as an example of strength in cooperation and interconnectedness. “The European Union, as opposed to individual European countries, has realized its market power on a regulatory stage because of globalization,” he explained. One example of this is the General Data Protection Regulation, Hubbard said. The EU implemented GDPR in May 2018 to address personal data privacy, the duties of those who have access to data, and the penalties organizations and individuals face for not complying with data protection laws.
The other example he mentioned was the EU’s Carbon Border Adjustment Mechanism, or CBAM, which when implemented, will require importers of certain energy-intensive goods to pay a levy for their imports corresponding to the price of emissions allowances under the EU Emissions Trading System. “Because of globalization, the European Union can export regulations,” Hubbard said, noting that both GDPR and CBAM are now being talked about in boardrooms all over the world.
Globalization, Hubbard concluded, has never been a linear process and it never will be. But it’s certainly not going away and neither is its value.
Watch a video of the event: