The snack giant Mondelez has just warned about a growing backlash against globalization. At the center of organizations, industries and CEOs’ concerns: the rising protectionism and economic nationalism.
Investors see and are nervous about new protectionist measures: new import taxes, Brexit, abandoned international partnerships, emergence of Frexit concerns, developed countries becoming inward-looking and the street talks about trade wars between major trade blocs.
One of the economic motivations behind globalization was to offer lower prices for consumer goods worldwide. Organizations of all kind took advantage of low-wage countries to increase efficiencies and to lower production costs. Had this process overlooked the stability of job markets in developed countries?
Import taxes will lead to increased prices and lower purchasing power that in turn will negatively impact both demand and the job markets. Our interdependent economies have become highly sophisticated and complex. Decisions need to be very smart or they might lead to adverse effects.
Other ongoing processes are currently impacting employment worldwide. The technological change driven by deep learning is only one example. The new « self-driving car » will transform the car industry through a creative destruction process over the next ten years. To which extent globalization is to blame? And how about the Amazon new smart convenience store? How can the current protectionist measures prevent the human kind from taking steps toward progress and a better life?
The world has entered a period of deep transformation. People, nations and organizations have either to embrace change – and even create it – or they will lose competitiveness. If globalization has produced unwanted side effects, probably the best choice would be to use smart protectionist policies that wont drive the world to an era of increased global risks. I am optimistic as I’m sure that the power of our democracies and strong human values will push for the right decisions to be made soon.