Globalization Is More About Data and Less About Stuff

Recent trends in globalization emphasize cross-border data and digital flows, argues a team from McKinsey Global Institute, an argument that coincides with YaleGlobal’s definition of globalization as the interconnectedness of the world in every area including trade and communications. “Today growth in global trade has flattened, and it looks unlikely to regain its previous peak relative to world GDP anytime soon,” write Susan Lund, James Manyika and Jacques Bughin. Meanwhile, “Cross-border data flows have grown by a factor of 45 over the past decade, and they’re projected to post another ninefold increase by 2020.” They offer recommendations for companies in achieving global scale: Organizations do not need same set of administrators or even a physical presence in each country; skilled specialists can work remotely. Companies can focus on value chains rather than supply chains, relying on multiple vendors to avoid bottlenecks. Some products do better with customization and others succeed with a streamlined approach for all. Global releases are the norm, and competition is intense and unpredictable. The article concludes, “The internet is ramping up pricing pressures, shortening product cycles, and creating a more global labor market in which companies have to compete for scarce technical and managerial talent.” – YaleGlobal