Globalisation and the spread of English in the modern world

The effects of global business

I have traveled to more than 22 countries and have had the opportunity to transact business in various parts of Asia, the Middle East, Canada, Central, and Latin America, Russia, and former Eastern Block countries, India, and the European Community. Conducting business on a global basis has always been of great personal interest to me, and it has also been both a pleasurable and financially rewarding experience. However, the days of doing business abroad are no longer a luxury. The ability to conduct business internationally is an absolute necessity if you hope to remain competitive in today’s marketplace. In today’s post, I’ll look at the impact of globalization on business.

Expanding the geographic footprint of your business has always been an expensive and risky proposition – the risks have not gone away, they’ve just shifted. I believe we’re in an environment where we have a short window (3 – 5 years) before the landscape changes again. Currently, globalization is a developing and stabilizing force, but I’m fearful that the interdependencies now shoring up some of the risks, may at some point down the road turn against us in the form of financial ripple turns Tsunami. Here’s the caution – times change and markets are fluid. Short term opportunity abroad abounds, but with that opportunity comes the potential for unforeseen future risk. That said, and with eyes wide open, if you are not taking aggressive steps to expatriate your business then you may be making a big mistake.
In today’s marketplace conducting business internationally is as much of a defensive play as an offensive play. In examining the upside of going global, consider the sheer size of international markets as contrasted with the size of the domestic market and you will likely find that the majority of your potential customers live abroad.
So if you could double, triple or quadruple your revenue why wouldn’t you aggressively pursue that goal? Now consider the downside of not going global – if your company is not pursuing those customers your competition will be. They will not only take a first mover’s advantage of securing customer loyalty and brand recognition, but they will also tie-up key partners and distribution agreements. As consumers continue to become more demanding and the world economy continues to flatten there will soon be an expectation that you be able to serve multiple markets in a seamless fashion. Being a slow adopter in today’s world could eventually damage your business.
The phenomenon of “Globalization” is not new. In fact, it has been creeping up on us since the dawn of time; it just hasn’t been so visibly impactful until recent years. The broad macro-economic effects of globalization being experienced today arguably became most identifiable with the end of the cold war, and have only continued their rapid advancement with the development of third world countries and other emerging markets, the establishment of free trade agreements, the creation of the Internet and other technology/communications improvements, the growing multi-national footprint of the business, the emergence of the European Community, the stabilizing impact of the Euro on global currency markets, as well as the increased liquidity of more sophisticated and efficient capital markets.
The above referenced worldwide macroeconomic maturation, more commonly referred to today as “Globalization,” has served to stabilize business and financial markets in such a dramatic fashion that many industry pundits have yet to reach an understanding of the depth and breadth of the impact it has had on lowering political, financial, and economic volatility. Here’s the trick – markets don’t go up forever, and when you tie your fortunes to a broader set of variables and unknowns you expose your business to the potential for a domino impact that will work against you. I mentioned a 3 – 5-year window above, but like anyone who looks forward, this is just my best guess. At some point in the near to mid-term, I believe we’ll see a shift in markets that unwind much of the current stability driving our current frothy capital markets and business expansion.
Let’s examine the stabilizing factor globalization has had on the world economy. Today’s trade deficit, petroleum pricing, down equity markets, housing crisis, the constricted flow of funds, and the overall cost of living should be challenging us more than it is. Conventional economic theory would suggest that with many of the negative economic metrics in play today, our interest rate environment should more closely resemble that of 1980 than the low-interest rates we are experiencing today. The difference between today’s financial landscape as contrasted with that of 1980 is the emergence of a truly global economy which is acting as a stabilizing factor. In fact, when the US went through the Great Depression it was largely a result of having an isolated economy. If (more likely when) the US economy does falter again, the interdependent nature of the global economy will likely stave off a collapse. In the event of severe financial turmoil in the US, you would see foreign investment from the G7, and countries like China, Japan, and Dubai would see it as an opportunity to affordably acquire interests in US companies.