I remember reading The World is Flat back in 2006 and thinking about how our world had changed.
I hired a patent lawyer in India shortly after that and paid less than 10% of what I would have paid in Canada (a story for another time). I recognized the value of outsourcing, and seeing the entire globe as a single supply chain. It was a time of breaking down walls and getting access to whatever you needed, wherever you needed it, faster and cheaper. We have benefited greatly from this as consumers of products, many of which are made of component parts that are manufactured in different countries around the world, then delivered to our local stores, or dropped off at our doorstep.
But the tides are changing and we could very well see a move away from the globalization we’ve been benefiting from. Shortages and supply chain issues have been issues across the globe. War, fuel costs, inflation (or stagflation), compounded with severe weather systems affecting crops, have all led to things we haven’t seen in decades: Jumps in prices, delays in delivery, and shortages in products leaving some shelves bare in our grocery store.
This is all leading to a shift from globalism to nationalism. Why would a country export a product desperately needed in their own country? Why rely on a component part being made slightly cheaper in another country when shipping and supply are causing delays in production of the final product? What is a country to do when neighbouring countries don’t trade enough food, because they are focussing on feeding themselves? And the food that is coming in is very expensive due to increased transportation costs.
All these changes lead to a more nationalistic approach. An approach counter to the globalization that brought us such prosperity, with an endless supply of cheap food and goods. Is this the end of globalization? Probably not, but it could be the start of a rebalancing where countries get more nationalistic, and things get tougher for a while.
High prices, shortages of products, and a focus on countries protecting themselves from dependencies on other countries…dependencies that we relied on to create a global economy that brought us better, and more affordable products faster than ever before. Things really might get worse before they get better. And while I believe that there will be a return to globalization, I’m not convinced it will happen any time soon.
