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FOUR PARADOXES OF GLOBALIZATION
GLOBALIZATION HAS POTENTIAL DOWNSIDES, ALONG WITH ITS
BENEFITS, SAYS RUTGERS' JOHN DUNNING. IT CREATES MORE
COMPETITION, MORE NATIONALISM, AND MORE GOVERNMENT, AND
IN BRINGS TEMPORARY DISBENEFITS ON THE INDIVIDUAL LEVEL.
BUSINESSES AND GOVERNMENTS MUST BE AWARE OF BOTH SIDES.
Everybody knows by now that globalization is happening.
Most people think it offers benefits to the world. Among them is
Rutgers' John Dunning, who has been tracking its amazing
development for over thirty years.
But unlike some observers, Dr. Dunning acknowledges the
complexities and apparent contradictions that characterize
globalization. In a recent address presented in both China and
England, he identifies four.
(1) Cooperation vs. Competition: Although globalization
breaks down many of the old anti-competitive barriers by spanning
national boundaries and creating common interests, in other ways it
actually sparks competition. Small and medium-size firms are
springing up as suppliers to the multinationals, and governments are
increasingly and openly competing with one another for similar
resources, as well as seeking to advance their own social agendas.
(2) Globalization vs. Localization: Oddly, at the same time
that spatial constraints are vanishing and markets appear to be
homogenizing, pressure is increasing on individuals, firms, nations,
and localities to reassert their distinctive traits and values. When
people see economic uniformity being introduced into their lives, their
reaction is to emphasize their individuality.
(3) Less Government vs. More: It's often mentioned that
some multinationals are now larger than some governments, and that
multinationals can simply bypass governments whenever a regulation
gets in the way. In that sense the role of government (the old "central
planning" idea) isn't nearly as important as it used to be. Yet on the
other hand, governments are more necessary than ever, since the
attractiveness of a country for foreign direct investment is determined
by such things as the educational level of its workforce, the conditions
of its streets and buildings, and the efficiency of its communication
lines. Only governments can attend to these things, and any
government that ignores them is causing its nation to be left out.
(4) Human Benefits and Disbenefits: This one hardly needs
to be described. At the same time that massive benefits can be
claimed by detailing the huge savings that corporations and nations
realize, the lowly shopkeeper who has been driven out of business by
untaxed imports is suffering cruelly. Many observers have predicted a
sbacklash against globalization for exactly this reason -- that it will,
in
the short run, produce high levels of unemployment, as well as a sense
of insecurity caused by rapid technological change, the breakdown of
traditional social mores, the resurgence of ethnic conflicts, and an
increase in unacceptable patterns of behavior such as terrorism and
drug trafficking.
So: is globalization "good" or "bad"? The answer, Prof.
Dunning reasonably points out, is that it's neither. The fact is that
it's
happening, and the successful nations and corporations are going to be
those that freely and openly acknowledge the downside as well as the
upside, and work to harness the former while capitalizing on the latter.
JOHN DUNNING, New Jersey State Professor of International Business,
constantly travels the globe studying business trends and presenting
papers at major business conferences. He is the author of more than
30 books and over 200 articles.
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