Coronavirus: a globalisation inflection point?
COVID-19 and the climate crisis have put a sudden brake on the rush towards globalisation. Can we create a new vision of global business amongst these crises?
Globalisation is not an unfettered benefit to mankind. If we were ever in any doubt about that, the last few weeks have made that clear. A virus is rapidly making its way around the globe. The growing consensus amongst experts is that we’re moving out of the containment phase, and moving into the delaying phase.
Yes, most of us will eventually contract COVID-19. The big question is: how fast will that be, and will our healthcare be able to cope? Unless governments act fast, and with precision, it runs the risk of over-whelming the healthcare facilities in some nations.
This has clearly already happened in a few affected nations.
Leaving aside the obvious health issues, the global economy is also taking a massive hit from this virus. The dependence of the global electronics business on Chinese manufacture has proven an unique vulnerability, as that country has all but shut down the economy in some regions. The likely parts and manufacturing shortages that result are going to take many months to resolve.
The other globalisation
But, of course, there’s another form of globalism, isn’t there? A parallelwelten of globalisation, if you like. The internet has truly connected us digitally in a way that is, truly, unprecedented. World travel has always been possible, but aircraft have made it much more practical. Before the internet, global communication was reserved for a privileged few, until tcp/ip allowed us to connect the world, cheaply and in real-time.
I’ve taught journalists in Australia from my spare room without ever having visited the country. That would have been unimaginable to my parents — even though my father routinely travelled internationally in his work. I regularly work with clients who live — and work — nowhere near me. In the last few weeks I’ve been working with the NEXT team in Hamburg (I live on the south coast of the UK) and another client in Devon — several hours drive from here. I haven’t seen my German colleagues in person since last September, but that’s not a major bar to us communicating.
I have daily conversations with people all over the world, exposing me to exchanges of ideas that would have taken years, if not decades, to happen only a century ago. Again, that form of globalisation comes with its negative consequences. The global epidemic of misinformation is one of them. But there’s a scale difference here.
Our truly global transport infrastructure has proved to be both a twin threat to human life, and an imminent one. First, through its contributions to climate change, and secondly, through its rapid dispersion of the virus. At what point do we stop and ask ourselves “do we need to do this? Do the benefits outweigh the risks?”
As Martin pointed out, air travel has doubled since the widespread availability of the internet. That’s a strange finding, when you think about it. One way of communicating is booming at the very time that a new technology is making it partially obsolete. We humans don’t change our habits easily, do we?
Of course, some of that is the leisure sector. And maybe we need to ask ourselves some hard questions about that. One only needs look at Instagram and its influencer culture. It seems firmly wedded to an aspirational, globe-trotting vision of the world. Perhaps influencers of place rather than lifestyle are our next step. How many of us have explored places half a world away better than a town 10 minutes’ away?
But I suspect that’s much less of an issue than business travel. About 75% of airline profit is business travel, and the current situation is rapidly eroding that. The coronavirus has already had a bigger impact on US airlines than 9/11. People are going to start questioning the worth of every bit of business travel. And some of it is sure to be found worthless.
A new day one for business
A friend made the comparison with the UK postal strike in the early 90s, which drove adoption of the fax machine and made many companies realise that they could do business just as well with it. The fax machine has, in turn, been obsoleted by email and cloud storage, but email, chat room apps and video conferencing make remote interaction and teams more than possible. Companies which produce software like WordPress and Ghost manage without offices and daily commutes. They have annual gatherings, but work using digital tools to connect with each other the rest of the year.
Yet, outside of these digital trailblazers, most companies are still wedded to a culture of “presenteeism”. The rest of the world of business is about to find out how much value all gathering in one building routinely — or jetting half way around the world for a meeting — actually delivers. And things that don’t deliver value may not come back.
Perhaps we needed this moment where we press “pause” on the physical globalisation, and concentrate for a while on the digital world. We cannot reverse globalism — technologies do not uninvent themselves. But we can choose to use them in different ways. And perhaps now we should.
A forced halt can change perspectives
For example, it’s not reliance on global supply chains that’s actually causing the economic issues right now. It’s global supply chains combined with concentration of expertise in one part of the world. That’s using globalisation purely to drive down prices and not to build resilience into the system. And we’re about to find out how much resilience many big companies have. Will we still see our regular new iPhone from Apple this September? Or will a shortage of cameras from Japan, or capacity in China, destroy Apple's long-held timetable?
Can we find a way of harnessing globalisation of supply chains, while building in resilience? Could we do more locally? What’s the right balance of global and local? These are good — and currently necessary — questions to ask.
Equally, many businesses will be re-evaluating their business travel. How many meetings could be done remotely, rather than face-to-face? What are the cost, climate and (whisper it) efficiency benefits of doing that? If even 10% of business travel disappears after this crisis passes, what does that do to the economics of many airlines?
A point of crisis forces us to take a hard look at what we’re doing, and how we’re living. Two crises together? They have the potential to be a huge catalyst for change. Once our habitual behaviors are challenged by enforced changes in the way we work and travel, will they snap back straight away? Or will we adapt and keep elements of the new lifestyles we're forced into for the next few months?
Habit is a powerful force. That's why marketers work so hard to encourage it in consumers. An enforced break from habit quite genuinely opens potential for change. That's not to say we should welcome the virus — that's clearly not the case. People have died — and many more will do so yet. But that doesn't mean we shouldn't look hard at all the range of impact it will have.
Despite the urgings of the worldwide populist movements, globalisation isn’t going away. But perhaps we can help ourselves through this crisis, and neuter the populists, by rethinking our very vision of what globalisation looks like.