Deglobalization: Global and local risks and opportunities
Globalization is commonly defined in IB as the process of increasing interdependence among nations (Chase-Dunn et al., 2000; Guille ́n, 2001; Meyer, 2017; Rugman & Verbeke, 2004; Verbeke, Coeurderoy, & Matt, 2018). Accordingly, De-globalization represents the process of weakening interdependence among nations in many aspects of economy, culture and social impact.
The field of International Relations in political science has developed two major theoretical approaches that speak to the question of (de-)globalization: liberalism and realism.
Liberalism permits a wide range of actors, interests, and forms of power to determine political outcomes. While countries represent the major actors in international politics, possible actors codetermining outcomes further range from the individual to the international, including individuals, firms, non-government organizations (NGOs), and inter- national organizations such as the European Union (EU), the World Trade Organization (WTO) or the United Nations. Liberalism assumes these actors to be rational on average, that is, deviations from rationality are possible.
The Realist school narrows down this wide range of possible actors, interests, and forms of power considerably. Actors are sovereign countries, especially great powers. Countries are unitary, rational actors, with domestic politics being irrelevant for their behaviour in the international system. This is because under the additional assumption of anarchy in the international system – the notion that there are ultimately no rules constraining state behaviour as there is no overarching authority that could enforce compliance – securing survival becomes the primary concern of states. The main objective of foreign policy is thus forced on countries by the structure of the international system, and countries permitting themselves to get distracted from the objective of survival by domestic- level political concerns risk their survival. (1)
After the 2008 financial crisis pushed the global economy into fragmentation, markets and regions understood they now may have enough resources and knowledge to start local initiatives on their own.
After the world was divided in economic, political and ideological blocks until the 1980´s when the iron curtain apparently disappeared and “East met West”, the Berlin wall fell and the Perestroika transformed the soviet block, technology spread in global markets at a very high speed. Information and knowledge was accessed globally, allowing more cultures to know more about each other and learn new ways of living and thinking.
The development of the internet and global communications, high international mobility and the instant interconnection of markets, cultures and people spread knowledge. lifestyles and resources across the planet. These factors helped to improve life and access to resources for remote communities in all countries and made them grow.
Social and civil rights movements had a stronger global echo and social businesses and activism spread to places like the Arab world and Africa where women, lgbt, environmentalists, and other causes claimed their presence. Movements like gender equality and equal marriage developed a strong importance and established political relevance showing how the world was able to grant more freedom to everyone.
Local companies and organizations from the “third world” were able to compete and grow globally and countries like India, Brazil, Korea, Chile, China, Mexico, among many others connected with a world audience and established a massive presence through new multinationals, media consortiums and technology resources. Entrepreneurship and the strat up scene also became a professional destination for the new generations creating new ways to work and being productive.Globalization enabled growth, expansion and global presence for everyone.
But since the 2008 financial crisis a process of Retrogression has been silently taking place. Regional and local blocks of power have appeared in Rusia, Turkey, Brazil, China, North Korea UK (Brexit) and the USA (trade wars) as in many other countries that through extremism captured power among scared voters affected by a new economy of scarcity and precariousness. the impact of the financial crisis took small business and families into bankruptcy and unemployment turning them into easy targets of populist discourse from opportunistic politicians, who now have the power to divide and reign, fragmenting the world to better controll it (Maquiavelo, The Price), in the same way fascism did in the first half of the XX century after another big financial crisis.
This process of political and economic fragmentation is called Deglobalization, a complete new scenario where new players are taking control of local and regional economies and cultures (Brexit, Tradewars), but also where local movements and trends are taking place. Each region and market offer culturally diverse reactions, opportunities and risks. At this local level for example, many cities of the planet are witnessing the gentrification of their neighbourhoods as a consequence of foreign investment and the return of local capital to the countries. The high speed of gentrification in cities around the planet constitutes an important signal (also risk and opportunity) that show the flow of capital and the establishment of new lifestyles and class divisions in many societies.
Deglobalization and Gentrification are two of the main topics we will be working with during the Trendslab19 in Barcelona, the fifth edition of our annual meeting to discuss and reflect those trends and movements that bring risks and opportunities to governments, organizations and businesses in the near future.