How To Make Globalization Work For Your Business
Throughout my life I have been fortunate to travel the world and work with people from across the globe. My travels have landed me in both first and third world countries. Throughout my journeys I have always been amazed by the business owners I have met that work tirelessly to build their dreams and feed their entrepreneurial spirit.
I have found the one thing that remains constant is the drive to deliver world-class products and services in competitive environments. From people providing bottled water and snacks in the most desolate regions of Nepal to building web applications in Romania. Everyone is trying to deliver the best product at the best price for their customers.
Globalization has been around since ancient times. Merchants traversed the planet trying to discover new markets for their goods. Advances in technology and agriculture created food surpluses as farmers sought new partners to trade their goods with.
The very pages of history themselves have been written by Globalization. Additional advances in transportation and entrepreneurism drove Columbus to set sail in a westerly direction in search of a new route to India to obtain valuable spices for sale to Europeans hungry for new flavors. His quest for new markets led to the western world’s discovery of America and blazed a trail for countless of others with similar dreams of riches.
Globalization has been responsible for tremendous wealth creation throughout the world. It picked up momentum in the 19th and 20th centuries with the advent of steamships, railroads and the telegraph which facilitated greater trade amongst distant countries.
According to the World Bank, trade has grown at an astounding rate. During the last 200 years trade grew to nearly 1/3 of the U.S. economy and over 1/2 of the world’s economy. The growth has been driven by lower import taxes and tariffs and has increased standards of living around the world. Some believe that Globalization has created an unfair trade imbalance but Americans remain among the wealthiest consumers and one of the key drivers of the world’s economy delivering prosperity at both home and abroad.
Globalization also helps open foreign markets for America’s goods and services. As competition grows, companies are forced to innovate and build better products which ultimately benefits the consumer.
For all of Globalization’s benefits it is often accused of being a destroyer of jobs. A study by the Peterson Institute for International Economics notes that advances in labor reducing technology is more to blame for the loss of jobs with the lowest skill employees being the most affected.
However, Globalization is driving the creation of higher skilled and higher paying jobs at a much faster rate in the areas of Technology, Professional Services and Finance. These sectors are currently benefiting the most from globalization.
Globalization has also helped increase foreign investment in the U.S. Foreign companies looking for lower costs to get their products to American markets often hire employees faster than U.S. companies and at a higher pay rate. Foreign companies now employ 1 in 5 American manufacturing workers. The current dialogue should not be on stopping Globalization, but on how to prepare today’s workers for tomorrow’s jobs.
The effects of Globalization on communities is real. The unemployment rate over the past few decades throughout the Rust Belt is evidence, but increasing tariffs on foreign goods is proven to only help protect the few industries that often represent powerful voting blocks. Protectionism will ultimately cause more harm than good by allowing protected industries to charge higher prices without the threat of foreign competition. The real work must be in creating a fair set of rules that everyone can compete under.
Globalization serves an even more important role in today’s society as one of the guarantors of national security. As each country’s standard of living is laid bared by social media, members of other countries can now see how wide the gap is between their standard of living and ours. Seeing the fruits of a strong economy versus their own conditions can often trigger a desire to immigrate at best and hatred at worse as members of other societies feel left behind or marginalized.
While working as a construction laborer in the early 90s to help pay for college between semesters, I met what turned out to be the most unlikeliest supporters of Globalization, my Foreman. Over our brown bag lunch he remarked that the only way the world was ever going to be a safe place to live in is when everyone has economic opportunity and a quality of life where it is far better to live a productive life instead of a destructive one.
On a positive note, as the rest of the world strives for better standards of living they will seek out and be able to afford more products from developed countries creating more markets. Apple’s iPhone sales in India and China are perfect examples of this phenomenon.
I have witnessed first hand the positive effects of Globalization. Last year I started a new business with the specific goal of bringing my clients the very best communication solutions at the best price. After working in several advertising agencies and owning one, I realized that the old agency model is broken with its high fees and overhead costs. I set myself out to build a better model that focuses on ability versus geography. What I found were creatives and coders across the planet who are hungry and talented that happily work at a fraction of the cost that you find in the U.S.
In most cases cultural and language barriers are non-existent. Many of the professionals I encounter have either studied in the U.S. or learned English from top notch colleges and universities. Of the individuals I’ve worked with, their command of the English language is often better than many Americans. With the prevalence of social media and YouTube everyone is watching the same viral videos and cultural nuances are not lost across borders.
Advances in technology allow us to stay connected and up to date on project milestones. Video conferencing capabilities let us to sit face-to-face to discuss projects in detail.
On digital projects where code is the universal language, experts interface with our team members to create innovative solutions at a fraction of the cost.
One of the biggest benefits is often the time zone difference between countries. Our teams abroad are often working while we sleep creating an almost 24 working cycle for our clients. Work gets done faster and at tremendous value for our clients.
A recent website project netted our client a cutting-edge website full of functionality in less than 6 weeks. I marveled at the fact that the site was built to the client’s exact specifications at less than half the cost I would have charged at my previous agencies. The client was happy and our margin was higher because we choose talent versus overhead. We passed the majority of the savings onto the client and Globalization made it all possible.
Tips On How To Make Globalization Work For You
1. Get out of your comfort zone — If you’re a Baby Boomer or Gen X’er like me you have to come to terms with the fact that the world is a big place. Talent and opportunity are everywhere. You have to embrace a more progressive way of working and get out of your comfort zone of being able to walk down a hallway to speak with someone.
2. Finding and vetting talent— I cannot stress how important it is to identify and vet overseas talent. They are plenty of scams out there. If something goes awry you won’t have much recourse to recoup your money or more importantly your time. Web-based services like Upwork and Fiverr do a lot of the heavy lifting for you by providing reviews and holding funding in escrow until both parties are completely satisfied. Start small with low risk projects to help vet talent and build a strong working relationship.
3. Utilize technology — There are tons of applications out there for little to no cost that allow you to stay connected and manage project details. The Slack project management and Zoom video conferencing tools are both excellent. We have found Zoom to be one of the best video conferencing services out there with little to no drop out or sound quality issues.
4. Transparency — Review project details and expectations with your team abroad. Share budgets, timelines and objectives so that everyone is on the same page. I have found working on a fixed fee is the most effective way to pay with payment milestones built in when work is completed. If necessary, tell your clients that you will be utilizing foreign talent to help solve their challenge. In some cases American firms may have criteria about working with companies abroad, typically when costs reach a certain level. Make sure to educate your clients on the value of utilizing overseas talent to their benefit. If they are a large company they have probably embraced Globalization too.