Tulante University Global Business Environment

GLOBAL BUSINESS ENVIRONMENT

INDIVIDUAL REFLECTIONS #1

1. Why Friedman argues in the first chapters that the rate of change, both technological and social, enabled by connectivity now exceeds our ability to adapt?

The exponential growth in computing power and the increasing rate of innovation it drives have created, according to Friedman, a huge change in digital interconnectedness, transforming how we communicate (texting, social media), shop (e-commerce), and even where we sleep (Airbnb). At the same time, he argues, the rate of change, both technological and social, enabled by this connectivity now exceeds our ability to adapt, causing many of our current political, economic, and social challenges. "When fast gets really fast," he writes, "being slower to adapt makes you really slow — and disoriented" because the world continues its acceleration path.

He brings to our attention for example that the typical cellphone today provides texting capabilities and mobile access to the Internet to anyone who can afford one, creating a global exchange of goods and ideas that was previously unimaginable: "Globalization has always been everything and its opposite — it can be incredibly democratizing and it can concentrate incredible power in giant multinationals," he writes; "it [also] can be incredibly particularizing — the smallest voices can now be heard everywhere — and incredibly homogenizing, with big brands now able to swamp everything everywhere."

On other hand, globalization and a digitally networked world are merging with human-driven climate change to create a perfect storm of mostly negative consequences, with deep effects being felt in the most vulnerable countries and communities.

When the rate of change exceeds our ability to adapt, we get a feeling of ‘dislocation’ (people feel that they can’t keep up with what’s going on). If change is “doubling or tripling or quadrupling”, as suggested by Friedman, the question is not only how do we adapt to it, but also at the same time, what can we do to help others to adapt, since it is not only the pace of change we must adapt to, but the complex nature of it.

2. Why Wanis Kabbaj states that nationalism and globalism can coexist?

For most people, nationalism is a synonym for patriotism, not for fascism. The World Values Survey found that 88.5% of respondents feel proud of their country of origin. Another study found that national pride – more so than household income or health satisfaction – has a strong correlation to individual happiness. Meanwhile, globalists are proud of the global accomplishments of the past decades, including the reduction of extreme poverty and the rise of peace among nations in many parts of the world. The casualty of globalization is the Western middle class, which has experienced low income growth for almost three decades as income inequality steadily increases. The World Values Survey shows that 71% of people consider themselves “citizens of the world.” They care about their country as well as people and causes in far-flung parts of the globe.

Nationalists fear that globalism will compromise their national identity, but globalization has influenced national customs and traditions for centuries (e.g. the letters in the Latin alphabet originated in Egypt centuries ago, the British monarchy has German ancestry, Chinese ideology is based on Marxism, and its main religion, Buddhism, originated in India, India’s favorite sport is cricket which is actually British, and Italian cuisine that is loved all over the world evolved due to imports from China, Yemen and the New World).

In this sense, Kabbaj implies that much of what we may cherish in your own country originated outside its borders, making nationalists in fact globalists, and globalists also nationalist, re-framing the question: we shouldn’t be concerned with choosing between nationalism and globalism, but instead the real question should be, how can we do both better?

3. Based on the videos, what are the main drivers of China’s development?

Contrary to what history dictates about China, nowadays private firms have become a major contributor to China’s growing as the country positions itself and a modern global trader (the state still plays a role in China’s growth, but a much smaller role today than most people realize). Four different drivers are pushing the country forward at once interacting with each other:

• China, like all other countries, is not isolated but interdependent as never before in its entire and rich history. Globally connected power, communications and transportation links now exist almost everywhere in China.
• China has become one of the world’s most competitive environments with the appearance and rapid growth of hundreds of even thousands of new companies.
• Chinese people have evolved at a remarkable speed as consumers, and the wealth created by the country’s growth has created a very strong middle class since it opened its markets to foreign companies with the economic reforms.
• The government has managed the liberalization of many parts of the economy, but it has maintained control over its strategic heights by retaining ownership of the core group of state-owned enterprises in key sectors such as finance, communications, energy, resources and media.

4. Based on the videos, what are the main drivers of India’s development?

India has not followed typical path of development, in relation to many other countries: it has gone quickly from agriculture to services, almost skipping industrialization, although there are some emerging manufacturing giants in the Indian economy.

The main factors for India’s growth and development are:

• It’s fast-growing population of working age, making its demographics look good for Indian growth in the next couple of decades.
• Many English-language speakers, has been key to attracting investment from companies such as those specializing mainly in IT and out-sourcing.
• It’s low wage costs that have allowed India to close some of the productivity gap between her and other countries in later stages of development.
• The development of highly advanced and attractive clusters of businesses in technology, which has led to competitive advantages in other related industries.
• India has by many years caught the attention of the US, and has always been seen as one of the Asian fast growing giants, together with China. Although the relationship with the US has sometimes been strained, there has almost always been mutual interest in keeping and growing their commercial and political bonds.

India's growth has been impressive in the last couple of decades, but has a series of endemic structural problems that raise the need for significant investments in infrastructure, manufacturing and agriculture in order for the rapid growth rates to be sustained.