In 2006, Thomas Friedman wrote a best-selling book ‘The World Is Flat: A Brief History of the Twenty-first Century’. This book reflected on shift required for countries, companies, and individuals to remain competitive in a global market in which historical and geographic divisions are becoming increasingly irrelevant. And in the last 14 years, that shift has been quite evident. I for one do not have to wait around for friends in the US to return to get a Nike or a Zara.
Photo byArtem BeliaikinfromPexels
Globalisation & free trade as it exists is good. The concept of free trade ensures the fact that no two countries will engage in conflict with each other till the time they have a major supply chain & trade operation between them. Globalisation has largely ensured world peace and we have not had a major world war situation in the last few decades. At least till March 2020 it did!
While we mostly enjoyed the benefits of the big G, did any of us anticipate that a pandemic would lead us to question the viability of globalisation or its affectivity when geographically the world is not a global village? What happens when borders are closed?
Like every other equalizer that nature automatically builds into the system to stop any uncontrollable exponential growth, this pandemic has exposed our over reliance on the manufacturing & supply chain part of globalisation. It has questioned globalisation’s inability to solve countries local problems in a pandemic.
The shortage of masks, ventilators, medicines & other essential services felt by healthcare providers in few countries during this crisis has left them vulnerable due to the failure of that country’s infrastructure to produce, stock and continue production. Essential service providers and manufacturers in a healthcare system are also organisations that look at the most competitive sourcing channels to increase their bottom-line. Hence they outsource production to manufacturing hubs like China & SEA regions to increase their profits. In a pandemic situation, everyone does their best to overcome supply chain issues and support each other with products that are locally produced or available in their country. But what if it comes to a situation when there is a major supply chain blockade or that they have to choose between our people and theirs!
That is essentially why I believe, that as we reimagine and reform after COVID-19, the emphasis will be on Localisation (the local production part of it) more than Globalisation.
The Localisation I talk is not about providing a local flavour to your product like McDonald’s. Instead this localisation will be about availability of the essential products in time. Borders don’t just close between countries; they could close between states, towns, and municipalities. Production and distribution chains of essential goods in real time will matter the most as we move forward and mitigate the risks of stock shortages. Now is the time to become the local manufacturer of essential products in your area! Governments will support this as it couples local product availability and job creation as means to further the economy As I write this article, Government of Japan has set aside 2.2 Billion dollars for companies to shift from China to Japan. Apple, Microsoft & Google are also contemplating moving component manufacturing from China as per a CNBC article in March 2020.
Going forward, local production for essentials, healthcare products & medicines and its local supply chain will be given a lot of importance. Am I advocating Localisation above Globalisation? Absolutely NO.
Well, there is no absolute truth; it changes with time and we adapt. Likewise, we need both Globalisation and Localisation to move on. Saying no to globalisation and shifting production of goods to only local sources may lead to losses and inequalities for smaller countries. Diversification of globalisation coupled with localisation will ensure that we are resilient to globalisation disruptions such pandemics or wars and at the same time not deprive small economies of their income.
Ever thought what outward supply chains bring us our essentials of freedom, belonging, joy, laughter, and happiness? This pandemic; did it manage to make us feel that we have lost control of our lives? Or did it just shatter the illusion that we were in control? Do we have internal supply chains that will bring us our essentials? I am still finding out, and I remembered a conversation with my friend Rajesh few months back, about micro farming on terraces or Vertical farming as it is called now!
“It is truly time to look inwards!” like the social media forwards during the lockdown claimed (which was obviously about meditation during lockdown and discouraging runners like us from stepping out)
Quite a coincidence, a couple of blogs ago I referenced the book titled ‘Brief History of Time’ and this one refers to the book ‘Brief history of 21st Century’!
Times change, Time doesn’t :)
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