‘Globalization 3.0 is a Minefield for Business’ – Politics

For companies, globalization 3.0 is more complex and unpredictable because trade is subject to new, non-economic factors, says Professor Marc De Vos.

Economic globalization is the convergence of technology, capitalism and peace. The first globalization, made possible by steam and telegraphy, ended with the First World War. The second globalization, once again borne by revolutions in the field of transport and communications, is dead in Ukraine. Will there be a third globalization? We can assume that a common foundation of values, rules and institutions will not soon bring the world back on a common course, as it did after the end of the Cold War. In the foreseeable future, globalization will be accompanied by geopolitical and nationalist tensions. That reality means the end of globalization with a universal aspiration. Instead comes a new phase, the first contours of which we can distinguish.

Last week, both the United States and China proved proactive in establishing international relations in the Indo-Pacific. During a visit to Japan, US President Joe Biden launched the Economic Framework Treaty, which aims to connect twelve countries – including Japan, Australia, South Korea, India and Indonesia. At almost the same time, China unveiled a global security initiative for countries seeking security based on their sovereignty. The target group includes Russia and Brazil, but also India and Indonesia, yes. China and America also get in the way of each other over a number of small islands in the Pacific Ocean.

This resurgence of diplomatic mating dances is the beginning of globalization 3.0. Free trade is no longer an end in itself. Trade is the selective expression of geopolitics. The world economic powers, including Europe, use their markets to strategically bind small countries or developing countries. In it, they also compete with each other in a tempting attempt to get geographically useful countries to choose a camp.

For companies, globalization 3.0 is a minefield.

Under Globalization 3.0, it is security and power first, trade later. As a result, globalization is becoming broader and deeper. It is not just about fewer trade barriers, but also and above all about more alliances: shared value chains, commodities, energy, infrastructure, cyber, tax rules and anti-corruption. Trade is the last link in a chain of strategic relations, where the dominant economic power offers partner countries much more than just trade. That is the essence of what America now represents in Asia. China pioneered this with its new Silk Road, built on Chinese investment and infrastructure.

Free trade does not disappear completely, but shrinks. The playing field for open competition is getting small. Even without a geopolitical shadow, all countries are thinking about security. Small countries achieve this by uniting with the big, the big players through their own sovereignty. Entire sectors of the modern economy are thus located outside of globalization through a large-scale industrial policy. Think of batteries, chips, energy, satellites, planes and so on. The great disruption comes in the digital because it connects economy, security, capital and weapons. Digitization is the dynamo of globalization 3.0.

It is hoped that a planetary consensus is still possible for planetary challenges such as climate or pandemics. Globalization 3.0 is already a minefield for businesses. More complex and unpredictable as trade becomes subject to new, non-economic factors. More risky, with more need for strategic anticipation and scenario planning. More delicate because the company’s values, ethical standards and moral principles cross what was previously only an economic calculation. Right on time was the mantra. Now there is too In the case ofjust maybeor just no way

Economic globalization is the convergence of technology, capitalism and peace. The first globalization, made possible by steam and telegraphy, ended with the First World War. The second globalization, once again borne by revolutions in the field of transport and communications, is dead in Ukraine. Will there be a third globalization? We can assume that a common foundation of values, rules and institutions will not soon bring the world back on a common course, as it did after the end of the Cold War. In the foreseeable future, globalization will be accompanied by geopolitical and nationalist tensions. That reality means the end of globalization with a universal aspiration. Instead comes a new phase, the first contours of which we can distinguish. Last week, both the United States and China proved proactive in establishing international relations in the Indo-Pacific. During a visit to Japan, US President Joe Biden launched the Economic Framework Treaty, which aims to connect twelve countries – including Japan, Australia, South Korea, India and Indonesia. At almost the same time, China unveiled a global security initiative for countries seeking security based on their sovereignty. The target group includes Russia and Brazil, but also India and Indonesia, yes. China and America are also falling for each other in the hunt for a number of small islands in the Pacific Ocean. This resurgence of diplomatic mating dances is the beginning of globalization 3.0. Free trade is no longer an end in itself. Trade is the selective expression of geopolitics. The world economic powers, including Europe, use their markets to strategically bind small countries or developing countries. In it, they also compete with each other, in a tempting attempt to get geographically useful countries to choose a camp. Under Globalization 3.0, it is security and power first, trade later. As a result, globalization is becoming broader and deeper. It is not just about fewer trade barriers, but also and above all about more alliances: shared value chains, commodities, energy, infrastructure, cyber, tax rules and anti-corruption. Trade is the last link in a chain of strategic relations, where the dominant economic power offers partner countries much more than just trade. That is the essence of what America now represents in Asia. China pioneered this with its new Silk Road, built on Chinese investment and infrastructure. Free trade does not disappear completely, but shrinks. The playing field for open competition is getting small. Even without a geopolitical shadow, all countries are thinking about security. Small countries achieve this by uniting with the big, the big players through their own sovereignty. Entire sectors of the modern economy are thus located outside of globalization through a large-scale industrial policy. Think of batteries, chips, energy, satellites, planes and so on. The great disruption comes in the digital because it connects economy, security, capital and weapons. Digitization is the dynamo of globalization 3.0. It is hoped that a planetary consensus is still possible for planetary challenges such as climate or pandemics. Globalization 3.0 is already a minefield for businesses. More complex and unpredictable as trade becomes subject to new, non-economic factors. More risky, with more need for strategic anticipation and scenario planning. More delicate because the company’s values, ethical standards and moral principles cross what was previously only an economic calculation. Just in time was the mantra. Now there is also just for the sake of safety, just maybe, or just no way.

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