The reality of a connected world is that the next idea that can make or break your company might come from anywhere, originating in one of the nearly six billion minds on this planet. The game today is knowledge, and the only winning strategy is finding innovative ideas and employing them before your competitors do. The organizations that succeed in this game put no national or geographic limits on the quest for knowledge. They go where the people are. Potential competitors do have an awesome opportunity, and an incredible challenge, as they learn to manage in a global knowledge economy.
Just a few years ago, the press warned multinationals to innovate or die. Today, their headlines have a different spin – globalize or die. The world may be flat but it’s not deep. Flat is surface. The human experience is more. Are we outsourcing the personal human scale experience for the sake of multinational corporations’ expansions? Whether the world has flattened or continues to create centres of excellence, it is quite clear that countries, developed or developing, must become competitive in tapping into the world’s six billion minds if they want to be part of the knowledge economy.
Globalization is leaving a lasting impression. While not perfect, globalization has been extremely successful. It has created millions of jobs, raised millions out of poverty and improved the quality of life in countries that once were considered incapable of contributing to the world economy.
Indeed, the benefits of globalization and global outsourcing are far reaching. With shared interests in building robust markets, generating greater profits for all and building stronger relationships, East and West are more interdependent upon one another than ever before.
While the United States continues to hold its position of power in the world, booming economies in China, India, Russia, Malaysia and South America are very real. A threat? Not many people are using that language. Not yet. But it is clear that America and Europe, which traditionally set the standards for business, could be in a position to lose that coveted world status symbol – power.
The relative importance of the emerging economies as an engine for new demand growth and spending power may shift more dramatically and quickly than expected. Emerging economies have enhanced the world’s infrastructure to deliver services in any geography based on a concept of real value-based virtual organizations. Capital flows might move further in favour of emerging economies prompting major currency realignments. As today’s advanced economies become a shrinking part of the world economy, the accompanying shifts in spending could provide significant opportunities for global companies.
Outsourcing – a product of globalization – has become a supercharged issue thanks to fears of job loss. Plus as New York Times foreign affairs columnist Thomas Friedman points out, people need to be aware of the consequences of a flat world. There is no such thing as an American or European job. Both America and Europe are going through dramatic change. The lowering of trade and political barriers along with the exponential technical advances of the digital revolution has made it possible to do business, or almost everything else, instantaneously with billions of other people across the planet. Today, China graduates four times more engineers and computer scientists than the United States. America and Europe are facing serious problems with both its education system and its immigration laws, and it wonders how to attract more students to science, improve education and open its borders.
Virtually all large-scale US and European companies outsource some or all of their information technology activities. Global outsourcing is fast becoming one of the greatest organizational and industrial shifts in modern history. Instead of debating its merits, we could better spend our time learning how to thrive in it. Global outsourcing allows companies to break completed tasks into many small parts, outsource each part to whoever can do it most efficiently, and then combine all of the completed parts into the final product.
The political and economic dimension out outsourcing is still not clear, as policy makers around the world have not thoroughly thought through that maze. But one thing is obvious – we are witnessing a sea change of what the future division of labour will look like. The old working class in the West is disappearing as developed nations provide capital and opportunities for the developing nations of the East. And the former underdogs may develop sustainable solutions for their economies as more of their people have access to wealth and education. The future is wide open.
This article is adopted from the Preface to ‘Six Billion Minds’ (Aspatore Books, 2006), co-authored with Mark Minevich and Faisal Hoque.
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