In his popular book “The World Is Flat: A Brief History of the Twenty-first Century,” Tom Friedman has developed one of the biggest schools of thought in economics. He explains that we live in a world surrounded by globalization, in which national borders do not really matter anymore, especially in terms of commerce. He explains how every competitor maneuvers with the same opportunities, thanks to almost-complete cross-border integration.
When we think about this as expatriates who work at international companies, with different work experiences in various countries and connections across the world, we have a strong tendency to think that, yes, this world is flat! But what are its implications?
This is the question that economist Pankaj Ghemawat tries to answer in his book, “World 3.0: Global Prosperity and how to achieve it.”
Globalization, a matter of perspective
In his work, Ghemawat bases his analysis on several figures that illustrate how irrelevant the “flat world” theory is if we look closely at the figures and tendencies. For example, he reveals that only 2% of all phone calls are cross-borders calls, that the percentage of Facebook friends that live in another country does not even exceed 15%, and also that the percentage of GDP (Gross Domestic Product) generated by exports and international commerce is only around 30%.
These figures are indeed significant and depict a not-fully-local or even a national scenario; they show that it is not really a “flat world” as described by Tom Friedman.
Where does this idea of a fully globalized world come from?
Ghemawat, in his book, explains that there is a huge difference between the actual figures and what people tend to estimate. Indeed, even in the most educated populations that have been interrogated, the estimations were much higher than the actual figures (up to three times).
According to him, this fact comes from two different things:
- Lack of data about the topic.
- Peer pressure, especially from influent personalities, which tends to mislead a huge chunk of the population which is not deeply informed about the topic.
These two factors strongly influence the way people apprehend globalization, which is not as positive as it seems. This state of mind does not encourage efforts; it also seems to increase the fear related to globalization. This especially holds true with regards to immigration, which is frequently linked to this topic. France is a perfect illustration of this fact. The popularity of extreme-right-wing ideas is rising; immigration has become a tense subject. A big part of the population thinks that immigrants are no longer a small minority and now present a threat to France. Surveys show that our collective imagination tends to overestimate the percentage of immigration, especially after discussions about globalization-related topics. In France, the population comprising immigrants is only of 8% while the figure estimated by the people interrogated is 28%.
According to Ghemawat, the world is not as globalized, or as “flat”, as we thought. Borders are still relevant and local actions matter a lot. Globalization is something we have to take into account, especially when it comes to business and entrepreneurship, but we still have to act locally.
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