We keep hearing it from the President’s Twitter account: “Make America great again! America first!”
The phrases are well-worn at this point, having been pounded into our heads since the summer of 2015, when Donald Trump first announced his candidacy in a speech replete with protectionist dogwhistles. At their core? A zero-sum vision of the world where every winner assumes the existence of loser, where companies ought to be punished for acting internationally instead of parochially, where our horizons ought to grow narrower and narrower with time.
It’s a situation we all need to cope with; the world has changed in ways very few people would have imagined just a year ago. Decade after decade of internationalization, following from the end of the Second World War, feels as though it’s ground to a halt, and the world feels very different than it did only a year ago. The first nativist shock to hit the West – the unexpected success of Brexit in 2016 – was rapidly followed by the accession of Donald Trump, of all people, to the most powerful office in the world, where protectionism and a go-it-alone mentality have become the norm (insofar as norms still exist in 2017). In such an environment, the souring of public sentiment against globalization cuts both left and right, though for wildly different reasons, and a retreat from the global marketplace is understandable, perhaps even easy.
But that’s exactly the wrong approach; globalization may be slowing, but it hasn’t quite ground to a halt. Popular attitudes would have you believe that all companies were operating on massive international scales, moving jobs and money across borders with utter ease; popular attitudes would also have you believe that our latter-day retreat from the world stage means that globalization is over. In fact, neither is true; not even the Great Depression shuttered international trade. A bump in the road is not the same as slamming on the breaks, and while we’ve learned – the hard way – that the trajectory of world history does not tend inexorably toward flat, accessible global markets, we are still moving in that direction, all things considered.
Which means we still need to be thinking about how to move forward with international business rather than how to pivot back to local markets. The advantages of globalized enterprise – the ability to scale across borders, greater access to talent, market diversification – haven’t gone away in the last year, and no one politician is going to throw thirty years of internationalization of business into disarray overnight. Business trends don’t work like that, and companies are giant, slow-moving machines that can’t turn on that kind of dime, nor should they.
Make no mistake; the rules of the game are changing, and the assumptions we’ve operated on for the last thirty years – that internationalization was only increasing, that trade barriers were coming down, and that taxes would probably be rising domestically – are all up for grabs. All of that may change the rules of the game, but we’re all still playing, and it would be a sore mistake to give up. And while seventy years of postwar cooperation seems to have come to a definitive close, the world we created in those years is still standing; we have better infrastructure, better communications tools, and more highly educated resources in more parts of the world than ever before.
In short, there is so much there for a savvy business leader to take advantage of, and absent the complete shuttering of international trade (or the imposition of stiff, punishing penalties for expanding outside national territory, which hasn’t gone anywhere and doesn’t appear likely to) these opportunities will continue to develop. If a company has already built a good foothold in a foreign market, tweaks to the rules won’t make it disappear, and the differences in relative strength between economies mean that there are still real opportunities in arbitrage and cost reduction.
But the rules are changing, and that means you need to change how you operate, too; in a much more nationalist and less internationalist global order, engaging in inculturation at the local level is vital to maintaining strong relations with both the local community and authorities. There is a widespread view, on both left and right in countries across the world, that globalization has contributed to rising income inequalities, with businesses engaging in rapacious and exploitative behavior that has left locals behind, which means that being international in 2017 and beyond is going to center, in many ways, on turning that image around. We have to be better than that.
The fact remains that there is more of a need than ever for businesses to operate globally, especially in a climate that’s both institutionally and culturally suspicious of international enterprises; the Flat Earth theory of commerce may be slipping away, but the ties of enterprise can serve numerous positive ends, even beyond the obvious commercial benefits, from fostering cultural exchanges to building powerful diplomatic contacts that can help avert conflicts ranging from trade disputes to wars. Flat Earth-style commerce really should be the goal; it helps move resources, including jobs, across the world to where they’re most needed with a minimum of fuss.
Yes, it’s a political flashpoint, a cause célèbre in a zero-sum world. But it’s smart business, and done effectively and ethically, it brings prices down for everybody while economically empowering impoverished areas.
I know that that’s a pie-in-the-sky vision of international business, and that this story has long been one of conflict and exploitation as much as of cooperation and peace, which adds legitimacy to the claims that businesses operating across borders is the main problem facing local economies, but it’s foolish to say that the antidote is unvarnished protectionism; protectionism does nothing but harm to businesses, workforces, and consumers alike. It not only makes it harder for goods and services to move around, but it lowers quality of life, raises prices, and ultimately costs governments, peoples, and yes, companies (who might be lured by the siren song of lower corporate taxes) more money than the development of a rigorous safety net to counteract unwelcome side effects.
The key, then, is to make sure that we’re practicing globalization in way that minimizes harm while maximizing benefit. By taking care to invest in the areas into which we expand both economically and socially, fully integrating our enterprises through language and culture while working to ensure that the benefits the presence of an international business promises – improving incomes, improving infrastructure, alleviating poverty, fostering enterprise and development – actually materialize while reducing the homogenizing and alienating effects that rightly worry critics.
In other words, the trick here isn’t to pivot away from globalization, or to grind its gears to a halt; global enterprise remains smart business for all the same reasons it had behind it at the start of 2016. The water is choppy right now, but there’s still opportunity to be had. We are simply far too integrated already for this protectionist wave to truly realign global economics so as to mitigate all advantage.
We need to be willing to recognize a very simple, very important truth: the current anti-global climate offers us a valuable opportunity to begin practicing better ways to build cross-border operations that can keep the gears running as we move into the future. That’s something we have to embrace, or the attitudes that brought us here will only worsen. Valid critiques of how capitalism operates need to be met with meaningful changes.
To fail at that would be to stare unblinkingly into the sun, and then wonder why we cannot see.