Forbes India 15th Anniversary Special

The new realities of globalization

How technology is changing the path of globalization and what leaders can do to be successful on the winding road

Published: Apr 24, 2023 02:51:11 PM IST
Updated: Apr 24, 2023 02:59:19 PM IST

The new realities of globalization Globalization will be increasingly driven and facilitated by digital technologies Image: Shutterstock

There’s been a lot of debate and chatter about deglobalization and increased nationalism. While we have seen an increase in national pride or loyalty, globalization statistics show that it isn’t going away. It is, however, morphing and becoming more complicated. When we look at global trade for example, international trade in merchandise and services continues to grow.  According to the United Nations Conference on Trade and Development (UNCTAD)s Global Trade Update published in February 2022, the value of global trade reached a record level of $28.5 trillion in 2021 – 13% higher compared to 2019 before the pandemic struck.

But globalization has changed, and there are bumps along the way. Over the past three decades, governments have been focused on attracting foreign investment, bringing down barriers, creating similar standardized universal laws and regulations, and so on. Increasingly, especially in developed countries, governments are now more focused on the implications of open borders in trade for other priorities of society.

When discussing globalization, I like to use a highway analogy to describe the changes we’re seeing. The path of globalization over the past 30 years is comparable to a straight highway. Everyone is moving in the same direction, and governments are removing roadblocks, eliminating detours, and paving the way for a smooth ride.

When we look at the path of globalization moving forward, it’s like a winding highway. There are a lot of curves in the road. And many of those curves have been created by governments and internal societal forces. On this road, technology is the vehicle – and it’s speeding up. Those who have driven on winding roads know that if the vehicle goes too fast and misses the curve, you’ll drive off the road.

So, here we are in this fast-moving vehicle on a curvy road that the government is no longer paving. If companies and leaders don’t know how to navigate the road, they’re going to drive off it.

New Realities of Globalization

The challenge for multinational companies is to make sure they understand and know how to navigate the new realities of globalization, which are:

  1.     Globalization will be increasingly driven and facilitated by digital technologies. While technology is a fantastic tool that creates breadth of communication, expansion, and networking, it does not inherently foster depth of relationship. Executives and global managers must find ways to create company culture and build deep relationships and trust with people all over the world. Over Zoom. On the tail end of the pandemic, we can all recognize the challenges of that task. It’s important to also recognize that an increase in technology is playing a role in widening the gap between classes and creating inequities inside and across societies.
  2.     Governments are more sensitive to other implications of global trade than economic benefit. They are focused on political challenges, sustainability, fractured societies, and income inequality.
  3.     As globalization grows and expands, people’s attachment to their own identity, nationality, society, and culture is becoming much stronger. This can generate defensiveness, anxiety, and anger and be challenging to navigate.

As globalization continues to grow, expand, and evolve, leaders must understand these new realities that are making globalization more complex and develop the right mindset and skills to traverse the winding road ahead. 

Also read: Crisis leadership in the fourth industrial revolution: What's changed and how your organization can come out stronger

What Can Leaders Do?

No matter who you are, where you’re from, or what company you work for, as globalization increases, so does diversity of thought and action in the workplace. That makes most people uncomfortable and unsure of their own thoughts and actions. The positive news is that leaders, managers, and students can grow their global mindset and learn ways to thrive in a global world. Here are some things to keep in mind:

  •     Be sensitive to cultures, cultural values, and practices of people in other countries. The workforce itself will become more and more diversified, and will have representatives from many states, countries, and backgrounds in the same company. Your colleagues will bring diverse views of how things are and how they should be done. Everyone doesn’t need to agree with each other, but it is important to be sensitive and empathetic to different points of view. That will foster an inclusive environment.  
  •     Gather information about other countries and utilize the information to be more sensitive and empathetic, communicate more effectively, and be professionally and personally appropriate. The Najafi Global Mindset Institute at Thunderbird School of Global Management is developing a dashboard that compiles information about over 100 countries into one place. This will allow the Thunderbird community to visit one site and learn everything they need to know about a county they're working in or with.
  •     Evaluate your global mindset, your strengths, and areas for growth. The Global Mindset Inventory has been a leading assessment for global leaders. It historically looks at three dimensions: psychological, social, and intellectual. It is currently being modified to include attributes of a digital mindset. The new Global Digital Mindset Inventory (GDMI) includes sections that look at an individual’s propensity to succeed in a global digital environment. Anyone can take the assessment to determine where they are, identify areas for improvement, and learn tools to promote growth.
  •     Understand the strengths and limitations of technology. Technology is a powerful tool behind much of what we do. And it is a major driver of globalization and global connection. But it is also more challenging to form bonds via technology, and not everyone has equal access to technology. It is important to be mindful of these limitations when communicating and building relationships with colleagues online.
  •     Work toward understanding people. As an example, we hear a lot of older people complaining about Millennials and a lot of younger people complaining about Boomers. Instead of complaining, try to understand that person’s perspective, their values, and what motivates them. Developing an understanding will help you work effectively with people of different ages, genders, cultures, nationalities, and even personalities.
  •     Be comfortable being uncomfortable. If we examine the synonyms for diversity – contrast, disagreement, discrepancy, disparity, unlikeness – it has a negative connotation. People are most comfortable with likeness, and diversity takes people out of their comfort zone. We must be okay with being uncomfortable to work through it. It also helps to know that other people are facing discomfort as well. Instead of hiding from diversity, embrace it. Create a culture where it’s acceptable to feel and discuss discomfort and encourage people to work through it.
Globalization continues to create opportunities, and companies see them – the market, the talent pool, and the growth prospect. But they're also beginning to realize the path is now bumpier and more complicated. It requires more thoughtfulness, empathy, and respect.

[This article has been reproduced with permission from Knowledge Network, the online thought leadership platform for Thunderbird School of Global Management https://thunderbird.asu.edu/knowledge-network/]