noticing people saying, globalization is dead. 0:05 I saw it in the headlines started coming up with conversations with business leaders, and I even read an article on it at the epicenter of globalization, Davos. 0:18 So why were so many people talking about the death of globalization. 0:23 You're picking on a radical shift in the geopolitics with the growth of nationalism. 0:29 Between 2010 and 2017 countries notified, more than twice the number of anti trade measures as Pro trade protectionism was on the rise and Multilateral agency like the World Trade Organization seem to be weekly. 0:46 At the same time, global trade was also slowing down in 150 years or so. Global trade as a percentage of global GDP grew more than five times from around 10% to more than 50% By the year 2010 But since then, it has plateaued. 1:08 Trade seems to have ceased to be a global GDP multiplier. And this led to the narrative that globalization is declining, or even dead. 1:21 Now, if globalization was indeed declining or dead, then you would expect the global growth of companies to be slowing down. 1:30 So I've been researching and writing about globalization for more than a decade now and I know, I know that companies are globalizing faster than ever before. 1:40 Fastest in history. And we saw this in our own home, some demand loves to play video games. 1:49 I remember back in 2006, the leader in games. Nintendo lost their revolutionary Wii console and demand wanted it and kept on asking me Dad, can you get it, and I could not for two years. 2:05 Because it took that long for Nintendo to enter, India, and New Delhi where we live with this new product. 2:12 Just one decade later, in 2016, a small company, this time on Niantic, they launched their revolutionary game. It was called Pokemon Go. Now of course he wanted to play, but all he had to do this time was download it and start playing. 2:32 So Nintendo obviously prioritized global customers based on their geographic location, and the cost and ease of entering that market. Whereas for Niantic empty global customer was a priority customer because technology enable them to access these customers simultaneously and near instantaneously. 2:55 Niantic built a billion dollar global business from customers in 127 countries in just seven months. 3:05 Now, that is fast by any, any standards, until such remarkable company is Netflix in 2010. They were an American company with a revenues around $2 billion. 3:21 Then they started to realizing, and in the eight years since then they have grown more than five times the revenue and gone from one country to 190 countries. 3:33 Now, I know that Niantic and Netflix are not the traditional global company. The reason I'm using them as examples is because they are the cutting edge of this powerful force of digital technologies and global data. 3:47 That, along with the equally powerful force of the new geopolitics is leading to the emergence of a radical new model of globalization, let's understand what this means. 4:00 We all know that technology is transforming our daily lives, is also transforming globalization. 4:10 Old globalization was all about shipping goods physically across the globe. The new globalization is increasingly about digital technologies especially global data. 4:22 And companies like Netflix know that in today's new world. It is not about where you are, because it's not about shipping the old DVDs so the customers across the world is increasingly about who you are, in terms of what you watch, because today the customer can download wherever he is, he can download the digital content, which he wants to watch. 4:46 And based on what he watches, wherever you may be, he gets this, or he or she gets exactly the same recommendation as others like them. 4:56 So technology is enabling companies like Netflix to completely redefine the global customer, away from the geographic location, and the country boundaries. 5:08 Let's talk about sneakers. 5:11 This is the industry that epitomizes all globalization. 5:16 We wanted to buy a pair of running shoes, I would go to the nearest retail outlet, and select from all the models on display, knowing full well that the designs, there would have been finalized months if not a year ago and the shoe has been manufactured in a plant in China or while the Asian countries, because we share today produces nearly 85% of the world shoes. 5:39 It just takes that long for the shoe companies once the designs are finalized to get these manufactured in the global plants and then shipped around the world through the global supply chain spanning continents of roads and ports and ships and warehouses and trucks. 5:57 But today, global data, robots and 3d printing is radically changing this. 6:07 The customer can go online and look up the latest designs, and he wants them, not next year he wants them next week. 6:17 So Addidas has set up the first speed factory in Germany and in the US. 6:26 These are fully automated, highly flexible plants, designed to produce the latest global designs for the local customers. 6:36 The vision is that the customer should be able to go online design his own shoes, and these automated mini plans will 3d print your customers designs and perhaps a drone will pick it up and ship it home, and all in days. 6:54 The new globalization is increasingly about data crossing borders, about personalization about local production and speed. 7:05 Just think about this, companies like Adidas, in the old model would have had to predict what designs would sell months later, what volumes sell in different parts of the world and then get them manufactured and shipped around the globe. 7:18 The new model. Companies will increasingly produce or the customer designs in these local automated plants, and in the volumes that the customer wants to call leaders like Siemens and many others are leveraging this model to build multi billion dollar high growth, global businesses, collecting and analyzing data from all the plants equipments that they have around the world and creating new services for their global customers. 7:50 In fact, some experts have estimated that the total value generated from this cross border data flow could be as high as $20 trillion by the year 2025, which is more than the total goods that is exported in the world today. 8:07 Not to me that is accelerating globalization. 8:12 This is one part of the story. The other part of story is been shaped by the new geopolitics, or geopolitics for decades was all about multilateralism countries came together and negotiated agreements, believing that collaboration was the best way to group global trade. 8:30 And the agreed rules were common to all, and they were stable. 8:36 The world seems very different today. 8:40 There is more economic competition between countries, nationalism is growing and each country wants to maximize their own benefits first. 8:48 So you have unilateral tariffs being announced by the US and you have more countries bilaterally negotiating and cutting these with each other. 8:56 So as a result, the rules are becoming more heterogeneous and they're becoming more and more volatile. 9:03 So you have these global companies, they have to deal with customers on a global level, but they have to deal with all these policy changes and regulatory changes and politics, and a local country by country level. 9:16 And the winning companies to managing this by giving more decision rights more authorities to the local teams so that they can respond quickly and effectively to all these kinds of sudden policy changes at the local level, which are distant headquarters 1000 kilometres away can never do in old globalization, it was all about squeezing more and more efficiencies out of your organization is winning companies know that in the new model, it is equally important to build capabilities and structures which can absorb the shocks of this will entirely heterogeneous rules. 9:53 For example, if you have a network of highly flexible plants in all the major markets, they can address they can react to any kind of type changes much more effectively then if you have highly cost efficient global plants, and the features of these companies know that focusing on the business means that they need to engage deeply with societal and government leaders as they do with their customers and analysts. 10:21 A new 21st century company is emerging 10:27 as I come towards the end of my current phase of research and globalization I'm left with one thought that as a society we're becoming more nationalistic and less and less open more closed, but as individuals are becoming more global, in all that we do in our work and our lives. 10:46 And these two contrasting narratives is shaping the new globalization for all of us know that globalization is not dead, it is accelerating. 10:59 But it is radically different. 11:02 Thank you. Transcribed by otter.ai
Thank you, I always listen to the transcripts while listening to different speakers but this video doesn't have a transcript or captions which is annoying because i have to listen and read at the same time.
noticing people saying, globalization is dead.
0:05
I saw it in the headlines started coming up with conversations with business leaders, and I even read an article on it at the epicenter of globalization, Davos.
0:18
So why were so many people talking about the death of globalization.
0:23
You're picking on a radical shift in the geopolitics with the growth of nationalism.
0:29
Between 2010 and 2017 countries notified, more than twice the number of anti trade measures as Pro trade protectionism was on the rise and Multilateral agency like the World Trade Organization seem to be weekly.
0:46
At the same time, global trade was also slowing down in 150 years or so. Global trade as a percentage of global GDP grew more than five times from around 10% to more than 50% By the year 2010 But since then, it has plateaued.
1:08
Trade seems to have ceased to be a global GDP multiplier. And this led to the narrative that globalization is declining, or even dead.
1:21
Now, if globalization was indeed declining or dead, then you would expect the global growth of companies to be slowing down.
1:30
So I've been researching and writing about globalization for more than a decade now and I know, I know that companies are globalizing faster than ever before.
1:40
Fastest in history. And we saw this in our own home, some demand loves to play video games.
1:49
I remember back in 2006, the leader in games. Nintendo lost their revolutionary Wii console and demand wanted it and kept on asking me Dad, can you get it, and I could not for two years.
2:05
Because it took that long for Nintendo to enter, India, and New Delhi where we live with this new product.
2:12
Just one decade later, in 2016, a small company, this time on Niantic, they launched their revolutionary game. It was called Pokemon Go. Now of course he wanted to play, but all he had to do this time was download it and start playing.
2:32
So Nintendo obviously prioritized global customers based on their geographic location, and the cost and ease of entering that market. Whereas for Niantic empty global customer was a priority customer because technology enable them to access these customers simultaneously and near instantaneously.
2:55
Niantic built a billion dollar global business from customers in 127 countries in just seven months.
3:05
Now, that is fast by any, any standards, until such remarkable company is Netflix in 2010. They were an American company with a revenues around $2 billion.
3:21
Then they started to realizing, and in the eight years since then they have grown more than five times the revenue and gone from one country to 190 countries.
3:33
Now, I know that Niantic and Netflix are not the traditional global company. The reason I'm using them as examples is because they are the cutting edge of this powerful force of digital technologies and global data.
3:47
That, along with the equally powerful force of the new geopolitics is leading to the emergence of a radical new model of globalization, let's understand what this means.
4:00
We all know that technology is transforming our daily lives, is also transforming globalization.
4:10
Old globalization was all about shipping goods physically across the globe. The new globalization is increasingly about digital technologies especially global data.
4:22
And companies like Netflix know that in today's new world. It is not about where you are, because it's not about shipping the old DVDs so the customers across the world is increasingly about who you are, in terms of what you watch, because today the customer can download wherever he is, he can download the digital content, which he wants to watch.
4:46
And based on what he watches, wherever you may be, he gets this, or he or she gets exactly the same recommendation as others like them.
4:56
So technology is enabling companies like Netflix to completely redefine the global customer, away from the geographic location, and the country boundaries.
5:08
Let's talk about sneakers.
5:11
This is the industry that epitomizes all globalization.
5:16
We wanted to buy a pair of running shoes, I would go to the nearest retail outlet, and select from all the models on display, knowing full well that the designs, there would have been finalized months if not a year ago and the shoe has been manufactured in a plant in China or while the Asian countries, because we share today produces nearly 85% of the world shoes.
5:39
It just takes that long for the shoe companies once the designs are finalized to get these manufactured in the global plants and then shipped around the world through the global supply chain spanning continents of roads and ports and ships and warehouses and trucks.
5:57
But today, global data, robots and 3d printing is radically changing this.
6:07
The customer can go online and look up the latest designs, and he wants them, not next year he wants them next week.
6:17
So Addidas has set up the first speed factory in Germany and in the US.
6:26
These are fully automated, highly flexible plants, designed to produce the latest global designs for the local customers.
6:36
The vision is that the customer should be able to go online design his own shoes, and these automated mini plans will 3d print your customers designs and perhaps a drone will pick it up and ship it home, and all in days.
6:54
The new globalization is increasingly about data crossing borders, about personalization about local production and speed.
7:05
Just think about this, companies like Adidas, in the old model would have had to predict what designs would sell months later, what volumes sell in different parts of the world and then get them manufactured and shipped around the globe.
7:18
The new model. Companies will increasingly produce or the customer designs in these local automated plants, and in the volumes that the customer wants to call leaders like Siemens and many others are leveraging this model to build multi billion dollar high growth, global businesses, collecting and analyzing data from all the plants equipments that they have around the world and creating new services for their global customers.
7:50
In fact, some experts have estimated that the total value generated from this cross border data flow could be as high as $20 trillion by the year 2025, which is more than the total goods that is exported in the world today.
8:07
Not to me that is accelerating globalization.
8:12
This is one part of the story. The other part of story is been shaped by the new geopolitics, or geopolitics for decades was all about multilateralism countries came together and negotiated agreements, believing that collaboration was the best way to group global trade.
8:30
And the agreed rules were common to all, and they were stable.
8:36
The world seems very different today.
8:40
There is more economic competition between countries, nationalism is growing and each country wants to maximize their own benefits first.
8:48
So you have unilateral tariffs being announced by the US and you have more countries bilaterally negotiating and cutting these with each other.
8:56
So as a result, the rules are becoming more heterogeneous and they're becoming more and more volatile.
9:03
So you have these global companies, they have to deal with customers on a global level, but they have to deal with all these policy changes and regulatory changes and politics, and a local country by country level.
9:16
And the winning companies to managing this by giving more decision rights more authorities to the local teams so that they can respond quickly and effectively to all these kinds of sudden policy changes at the local level, which are distant headquarters 1000 kilometres away can never do in old globalization, it was all about squeezing more and more efficiencies out of your organization is winning companies know that in the new model, it is equally important to build capabilities and structures which can absorb the shocks of this will entirely heterogeneous rules.
9:53
For example, if you have a network of highly flexible plants in all the major markets, they can address they can react to any kind of type changes much more effectively then if you have highly cost efficient global plants, and the features of these companies know that focusing on the business means that they need to engage deeply with societal and government leaders as they do with their customers and analysts.
10:21
A new 21st century company is emerging
10:27
as I come towards the end of my current phase of research and globalization I'm left with one thought that as a society we're becoming more nationalistic and less and less open more closed, but as individuals are becoming more global, in all that we do in our work and our lives.
10:46
And these two contrasting narratives is shaping the new globalization for all of us know that globalization is not dead, it is accelerating.
10:59
But it is radically different.
11:02
Thank you.
Transcribed by otter.ai
GRACIAAAAAAAAAAAAAAAAS
Thank you, I always listen to the transcripts while listening to different speakers but this video doesn't have a transcript or captions which is annoying because i have to listen and read at the same time.
how can we relate to this after covid
Thank you Arindam for this interesting talk / perspective
Grande frate
This guy is big time into shoes. Lmfao!
yeh, shoesses, hah hah hah, shoesses that's it, ahah hah hah