“o. itemList. length” “this. config. text. ariaShown”
“This. config. text. ariaFermé”
The closure of the world economy in 2020 drew everyone’s attention to the interdependence of chains of origin between countries and continents. Added to this is the development of tensions between the United States and China, with President Trump now pushing for a decoupling of the Chinese economy as a component of his re-election campaign.
Many, if the 2020 occasions will leave us with a less globalized world, some even if COVID-19 ended globalization.
But globalization has not kept its course. People wondered their long term long before 2020, bringing up the tension of protectionism and nationalism. In response, Frans Appel, chief executive of Deutsche Post, argued convincingly in December 2019, subsidized through in-depth investigation of the data, that globalization holds up very well.
Since then, the pandemic has drastically reduced cross-border flows such as world trade. But wherever infection rates have declined and blockages have decreased, there have been signs of recovery.
The pandemic has also demonstrated the economic importance of global connections. Race to produce a vaccine. A German biotechnology company, BioNTech, run through a Scientist of Turkish origin indexed on the US NASDAQ. USA, it is partnering with US medical giant Pfizer and China’s Shanghai Fosun Pharmaceutical Group. This is an example of today’s globally interconnected business world.
Certainly, companies have to live with wonderful uncertainty. We do not know when a vaccine will be received and if there will be new waves of contagion, the economic benefits are still unknown, given the restrictions imposed by the maximum countries.
Then there’s the political climate,As Tata Sons President Natarajan Chandrasekaran said, “geopolitical conflicts have a new norm for any company. “
It is transparent to me that these uncertainties have a domino effect. Corporations may be under increased pressure from Trump in his relations with China.
India is actively trying to attract more than 1,000 U. S. production corporations outside China. In Japan, outgoing Prime Minister Shinzo Abe recently proposed building an economy less dependent on China, suggesting that Japanese corporations diversify to other countries, especially ASEAN Southeast Asian countries.
In addition to the US-China conflict, there are other political uncertainties such as what Brexit will look like in the UK and its relationship with the EU, but greater uncertainty does not necessarily mean a decline in globalization. This means greater challenges, but also greater opportunities. To make the most productive strategic decisions, business leaders want a transparent view of the global dynamics at stake and the evolution of globalization.
Many industries have been dramatically affected by the pandemic. The world’s largest tour operator, TUI, reported a 98% drop in sales in the last quarter. The greater the economic impact, the more companies and their suppliers had to do in short-term survival. .
But corporations will also have to plan in the long run taking into account all the other uncertainties related to COVID-19, as well as every single thing, from climate replacement to cyberattacks. expecting one-month interruptions in its home chains every 3. 7 years, the equivalent of 40% of a year’s earnings over the next decade, and that’s just an average.
To minimize these effects, corporations want to think about their overall geographic footprint, chains of origin, and organizational structures. Companies that depended on an unmarried country for an express component were overexposed at the beginning of the blockade. A more diversified source network would possibly be less efficient, but it can make businesses more flexible and resilient in those turbulent times.
Given the geopolitical climate, making chains of origin more concentrated at the regional point and closer to customer requests is another way for corporations to reduce their exposure to long-term disruption while leveraging local experience and other benefits such as tax differences. , Apple is now investing in two independent source chains for the iPhone: one for China and one for the rest of the world.
Finally, virtual technologies will be the driving force behind the next phase of globalization. They were already key drivers, enabling global innovation and productivity, connecting consumers and suppliers, and moving information. Advances in virtual generation are the main explanation for why foreign Internet bandwidth is more than 500 times faster than in 2001, for example.
The pandemic has further accelerated this trend. Let’s take the auto industry. Conventional wisdom used to assume that car sales were highly unlikely to go online, but that’s precisely what happened when showrooms were forced to close. Carlos Tavares, CEO of Peugeot PSA owner, recently described this as a “Darwinian reality,” aiming at PSA to deliver more than 100,000 cars directly to customers’ homes without them ever visiting a showroom.
Many corporations have rushed to improve their online sales to take advantage of the fact that consumers are at home and offset the effect of the pandemic on their income. Adidas nearly doubled its e-commerce business this quarter and expects further expansion. consumers who will no longer resist online shopping.
In addition to e-commerce, companies want to reconsider how to make the most productive use of virtual technologies at all levels. Multinationals ranging from Google to Twitter, PwC to Schroders continue to allow most of their staff to paint from home after the pandemic. The transition to remote paints can therefore be permanent. Businesses will want a robust virtual infrastructure to interact with the world’s customers, suppliers, and business partners.
The World Trade Organization also noted that foreign industry prices fell by 15% between 1996 and 2014 and expects new virtual technologies such as synthetic intelligence, the Internet of Things, 3-d printing and blockchains to lower prices in the future.
Unsurprisingly, cross-border knowledge flows will accumulate even faster in the coming years. To remain competitive after COVID-19 and reap the potential benefits, while in a position for the emergence of a new globalization bureaucracy, a company’s ability to capture the opportunities presented through virtual technologies will be more vital than ever.
This article has been republished from The Conversation, a Creative Commons license. Read the original article.
Pisani paints for, consults, holds shares or obtains investments from any company or organization that gains advantages from this article, and has disclosed any applicable association beyond its university appointment.