Minnesota Futurists Globalization Stephen Troutman Community Volunteer and Futurist 507 250-1611...

Minnesota Futurists

GlobalizationStephen Troutman

Community Volunteer and Futurist

507 [email protected]

Globalization Definition• "Globalization is a process:

of interaction and integration among the people, companies, and governments of different nations,

• Globalization is driven by: international trade and investment ,and aided by information technology [in modern times] .

• Globalization has effects on:–the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world." 1

Footnotes1. http://www.globalization101.org/What_is_Globalization.html

Copyright Stephen Troutman 2011-10 (507) 250-1611 2

What does Globalization mean?• Globalization can mean:

– Products came from here, but now they come from somewhere else.– Work was done here, but now it is done elsewhere.– Management was carried out here, but now is somewhere else.– Investments were made here, but now they are made elsewhere.– Innovation was controlled, mostly, from here, but now is controlled in

other places or many places. • Innovation has always come from and the fringe of established products

and processes, or from other cultures

– Technologies are necessary to move, track, and manage goods and services, in a globalized environment.


Globalization Implies• Globalization implies:

– Business pressures may be the drivers decision making.• Government rule making may be subsumed to business pressures.• Individual personal interest may be subsumed to business pressures.

– Cross-national business enterprises may be more powerful and agile than individual nation states.

– There may be:• Large effects on economic development . • Temporary or permanent dislocation of people.• New winners … and losers.• Impacts on prosperity.• Changes to political systems.• Impacts on cultures and traditions.• Reductions in human physical well-being.


Globalization in Ancient History

• "… the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages"1 and is an excellent example of globalization."


• China traded silk, spices, teas, and porcelain; while India traded ivory, textiles, precious stones, and pepper; and the Roman Empire exported gold, silver, fine glassware, wine, carpets, and jewels.

http://www.globalization101.org/What_is_Globalization.html

Globalization Effects in Ancient History

• The Silk Road connected China and Europe, and it made a number of people at both ends, and in the middle, immensely wealthy.

• Chinese consumers won … fine glass and wine. Roman consumers won … spice and silk.• Local and non-silk road producers and traders were losers.


• Chinese silk and spice manufacturers and growers and merchants did very well.

• In places like Petra, traders and haulers along the route did very well.

• In Europe: Roman traders in gold and silver, Venetian glassware artisans, Italian and French wine makers did very well.

Globalization in Colonial History

• "The best-known triangular trading system is the trans-Atlantic slave trade, that operated from the late 16th to early 19th centuries.


• The first leg …from European ports to Africa … copper, cloth, trinkets, slave beads, guns and ammunition. This cargo would be sold or bartered for slaves.

• On the second leg… from Africa to the New World…. acquired slaves were sold in the West Indies or the American colonies.

• On the third leg, … the Carribean export cargoes were sugar, rum, and molasses; and from Virginia, tobacco and hemp."1

1 http://en.wikipedia.org/wiki/Triangular_trade

Globalization Effects in Colonial History

• "The triangular slave trading system, made a number of people very wealthy."


• European, and later American, manufacturers of copper, cloth, and guns did very well.

• African tribal rulers who captured and sold slaves did very well.

• European, and later American, ship owners did very well.• West Indies growers of slave labor sugar and distillers of

slave labor rum, and Virginian growers of slave labor tobacco did very well.

Winners and Losers in Colonial History• European and American consumers won …

– cheap rum and tobacco, and export income

• African rulers won … – they got export income and manufactured goods, including guns

• The slaves were losers …– They got abuse and death

• Non-slave economic systems were losers …– Unable to compete they fell into decline

• Future generations were loser …– They got the terrible legacy of slavery and racism


So what have we learned from history

• People and places with 'sought after goods' can gain great wealth.– And, humans will go to extraordinary ends to gain these goods.

• In business, value must circulate. – To be sustained, there must be a way for consumers to become

producers, so they can acquire more money to consume more. – Likewise, producers must become consumers, to distribute the

wealth they acquired from production.

• When there is no circulation "loop of value" the benefit (and globalization itself) cannot be sustained.– A one way transaction, from a producer to a consumer, looks great

to the individual producer, but , in the end, leaves the consumer impoverished.


Globalization in Near-Modern History (1946 to 1991) - Part 1 the Communists

• After WWII, the "communist " economies (red shades) were almost completely isolated from the "free world" economies.


The Cold War 1960-1991

• From the viewpoint of the free world, there was no commerce with the communists world.

http://users.rcn.com/mwhite28/coldwar2.htm

• The communist world proceeded with rebuilding their economies separately.• The Soviet Union and their

allies proved ineffective in their economic planning compared to the free world.

• The Communist Chinese had the Red Guard and famine, among other outcomes

http://users.rcn.com/mwhite28/afghanis.htm

http://users.rcn.com/mwhite28/nicaragu.htm

http://users.rcn.com/mwhite28/chad.htm

http://users.rcn.com/mwhite28/philp_cw.htm

Globalization in Near-Modern History (1946 to 1991) - Part 2 the Free World

• After WWII, the US had the largest undamaged manufacturing capability and provided the economic engine for recovery.

• With little competition in the 50s and 60s, the US was a huge exporter, but with improving quality from Japan and Europe, the US became a huge importer in the 70s and 80s.

• The US did not effectively retool, modernize, or otherwise deal with a growing Japanese and European competition.


• The Marshal Plan and other economic alliances, from the US, provided purchasing power to Europe and Japan.• Europe and Japan rebuilt their industries using this purchasing power.

• $3.5 billion positive trade balance in in 1960• $19.4 billion negative trade balance in 1980

http://www.census.gov/foreign-trade/statistics/historical/gands.txt

Modern Globalization Landscape

• Developed nations – Have more regulations (rule of law) – Have infrastructure, and have a higher standards of living.

• i.e. have high costs– Higher operating costs, may make investment less attractive.

• Developing nations – May lack regulations and/or enforcement.– May lack infrastructure, but have lower costs , especially for labor.

• i.e. may have lower cost and be more attractive to business.– Pinpoint, but lower cost, infrastructure improvements and bribes to

approximate the rule of law, may make investment more attractive.


Globalization in Modern History (1991 to present) - Part 1 New Producers• With the collapse of the Soviet Union, the opening of trade

with China, and improving relations with Indian, major changes came to the world's free market economy.


• The former Soviet Union client states, with a well trained, but low wage, work force, came available to the free world. This brought new low cost production sites and market potential.

• In Asia, two huge, low wage, work forces became available in China and India. Low cost manufacturing and services, and potential new markets attracted business investment.

• Brazil also blossomed.http://www.mapsofworld.com/thematic-maps/economy-maps/world-economic-classification.html

Globalization in Modern History (1991 to present) - Part 2 Dislocation• A huge dislocation of the world's free market economy took

place with the arrival of the low cost producers.

• Chinese and former Soviet clients got production jobs. Indians got service jobs. All got an influx of capital.

• US and EU consumers got low cost goods, a loss of jobs, and, most recently, a recession.


• Production work fled from developed countries.• Developing nations were

flooded with new wealth.• New markets did not develop or

mature as rapidly as expected. • Therefore , developed

nations saw a stagnation of business growth

Globalization Pros (1 of 2)

• There are more markets for companies to sell to.• There is an influx of information among countries.• There is a lot of technological development.• More production is needed from successful enterprises• Competition keeps prices down, and slows inflation.• There is a steady flow of cash to developing countries. • There is access to products from different countries.• Compartmentalized, regional power is weakened.• Politics is moving toward a global view of the world.• Sharing financial interests, we also share problem.

http://www.buzzle.com/articles/pros-and-cons-of-globalization.htmlCopyright Stephen Troutman 2011-10 (507) 250-1611 16

Globalization Pros (2 of 2)

• Less brain drain as people find work for their own country. • There is cultural intermingling and adoption of best of each.• Socially we become more open and tolerant of each other. • Negative taboos in developing countries are questioned. • Modernizing native cultures.• "A rising tide raises all boats".• Maximizes the most efficient production.

http://www.buzzle.com/articles/pros-and-cons-of-globalization.html


Globalization Cons (1 of 2)

• Developed nations lose jobs, due to outsourcing of work .• Corporations leave developed nations, for higher profits.• Corporations transfer expertise to developing nations.• Corporations 'equip' developing nation to compete.• Nations cannot control foreign companies, in their borders.• Potential for corporations to rule through financial power.• Can lead to a sophisticated form of economic colonization.• Concentrates wealth further.• Significant de-localization (face-to-face reduced)• Not only modernizing but also westernizing native cultures.

• http://www.buzzle.com/articles/pros-and-cons-of-globalization.html

Copyright Stephen Troutman 2011-10 (507) 250-1611

Globalization Cons (2 of 2)

• Linguistic, culture and tradition genocide. • Worker travel fosters spread of communicable diseases.• Removal of local customs fosters social degeneration. • Needs of individuals subsumed to that of the business.

• http://www.buzzle.com/articles/pros-and-cons-of-globalization.html

Copyright Stephen Troutman 2011-10 (507) 250-1611

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Futurist's Approach

• Futurists use special tools to enrich their thinking.– Today we will use "scenarios"

• Scenarios are is a brief descriptions of possible future states– Scenarios "paint pictures" of possible futures, but– They place us far into the future, over 10 years, and – Are as brief as possible, so they can be quickly understood, but also– Contain enough content to differentiate them from other scenarios.

• We consider three scenarios to enliven our thinking


Scenario 1 - Vibrant Tomorrow

– The US economy is booming, and the nation is united. – Our investments in education, research, new technology, and the

environment have paid off. – Our quality of life makes the US "the place to live and work." – Because we are open to them, we have the top talent from around

the world to drive us forward.– Our support for entrepreneurship in the US, continues to be an

important economic driver.– New technologies are providing all the quality jobs we need.– As our prospects brighten, the middle class is reinvigorated.


Scenario 2 - Muddling Through

– The US economy is doing OK, and the nation is stable. – Our budget rebalancing enabled some investment education and new

technologies. – Loss of local services has had only minor impact on quality of life.– We have recovered a number of jobs that went over seas, although

the wages price index remains flat.– New jobs are coming slowly from new technologies.– Our "hands off" approach to entrepreneurship has not resulted in new

growth where it is best for the investors, not always in the US.– The divide between the rich and poor widens.


Scenario 3 - Sinking

– The US economy is stagnant, and the nation is dejected. – Budget rebalancing severely limited new education initiatives.– Loss of local services has negatively impacted quality of life.– We have recovered a number of jobs that went over seas, but only

because workers have accept significant pay cuts.– There is little new job growth.– Entrepreneurship is not working n the US.– We are becoming a "third world" nation, as the middle class erodes

and more people slip into poverty.


Copyright Stephen Troutman 04/2011 - (507) 250-1611

Thank you for joining me in this discussion of Globalization

Stephen TroutmanFuturist, Consultant, and Keynote Speaker

http://www.linkedin.com/in/troutman

Minnesota Futuristswww.mnfuturists.org

World Future Societywww.wfs.org

Stephen [email protected] 250 1611 cell3210 Hill Court SW Rochester MN 55902

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Globalization and the Future

Class description:• First we will define globalization. We will look at the history

of globalization and we will review the pros and cons of globalization theory. We will review the different perspectives inherent in the globalization (i.e. the globalizer and the globalizee). We will look into the impacts of globalization on people, on businesses, on institutions, and on nations, in the past and into the present day. Finally, we will consider three future scenarios from our current worldwide globalization, and discuss the implications they represent and what might be necessary to mitigate them.

• 2 hoursCopyright Stephen Troutman 2011-10 (507)

250-1611 25

Minnesota Futurists Globalization Stephen Troutman Community Volunteer and Futurist 507 250-1611...

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