Rethinking Globalization in the 2020’s
Rethinking Globalization in the 2020’s
Vicar Sayeedi
April 1, 2020
Over the past twenty-five years or so, the Industrialized World has made great strides in redesigning everything from their back-office operations, customer service platforms and supply chains by participating in and capturing the benefits of a newly globalized marketplace for intermediary and finished goods and services. With the obvious and tantalizing benefit of significant cost reduction, this operational restructuring has also generated many complex business issues and personnel challenges that most corporate bosses have been willing to accept [or in some cases, they’ve simply acquiesced due to the unrelenting competitive pressures from rivals]. They were then able to take advantage of substantially lower costs for components and subassemblies in their supply chain as well as attractive labor contracts for ancillary services including call centers for back office support, IT and Customer Service.
But the COVID-19 Pandemic now raging across Planet Earth provides an unexpected and perhaps unsettling opportunity for Consultants, Corporate Strategists and Managers to reevaluate the benefits and risks of such a geographically dispersed operating model that now underpins their commercial enterprise. Many companies find themselves frighteningly exposed as these essential services that have been offshored to China, India and other low cost labor centers in Asia, now struggle to meet important customer commitments. There is a sense coalescing in the minds of these Consultants, Corporate Strategists and Managers that the Globalized Model works very well in theory as well as in practice, but apparently only in “Blue Sky” scenarios. They now realize that they never considered how they might manage these complex, geographically dispersed business models in an environment in which the “Blue Sky” scenario was replaced by a considerably more “Turbulent Sky”.
Artificial Intelligence is likely to make great contributions in the next few years when applied to customer service support networks, IT network oversight as well as in other areas. With the rapid proliferation of Artificial Narrow Intelligence [ANI] across the geographies of the Industrialized World during these past five years, it’s likely that American and European companies will accelerate their plans to repatriate substantial aspects of what had been off-shored over the past twenty-five years. We are rapidly approaching the point where many of the garments made in the sweat shops of Bangladesh and Sri Lanka, or even China, will soon be manufactured in Chicago, Los Angeles, New York, Miami and San Francisco using highly automated machines requiring minimal input from labor, and hence can be produced at a comparable cost. The days in which low cost labor from the Developing World was seen as attractive to Western Industrialists has been waning for some time and the current Coronavirus Pandemic and simultaneous emergence of ANI is likely to dramatically accelerate restructuring and change.
Perhaps five years from now, the world of business and internal commercial operations will look substantially different than it did in January 2020 when the Coronavirus Pandemic dominated the headlines as the biggest news story of the year. This day may come to be seen as the defining moment in which Western Industrialists retreated from the globalized business models conceived in the post-Soviet era of the 1990’s and resolved to adopt an on-shore approach that heavily leverages AI. This change is likely to be a debilitating and irreversible setback for the Developing World.
The author is an Essayist, Poet and Writer. His most recent book, The Génome Affair is a story about the rise of Artificial Intelligence and its impact on society.
Vicar Sayeedi
April 1, 2020
Over the past twenty-five years or so, the Industrialized World has made great strides in redesigning everything from their back-office operations, customer service platforms and supply chains by participating in and capturing the benefits of a newly globalized marketplace for intermediary and finished goods and services. With the obvious and tantalizing benefit of significant cost reduction, this operational restructuring has also generated many complex business issues and personnel challenges that most corporate bosses have been willing to accept [or in some cases, they’ve simply acquiesced due to the unrelenting competitive pressures from rivals]. They were then able to take advantage of substantially lower costs for components and subassemblies in their supply chain as well as attractive labor contracts for ancillary services including call centers for back office support, IT and Customer Service.
But the COVID-19 Pandemic now raging across Planet Earth provides an unexpected and perhaps unsettling opportunity for Consultants, Corporate Strategists and Managers to reevaluate the benefits and risks of such a geographically dispersed operating model that now underpins their commercial enterprise. Many companies find themselves frighteningly exposed as these essential services that have been offshored to China, India and other low cost labor centers in Asia, now struggle to meet important customer commitments. There is a sense coalescing in the minds of these Consultants, Corporate Strategists and Managers that the Globalized Model works very well in theory as well as in practice, but apparently only in “Blue Sky” scenarios. They now realize that they never considered how they might manage these complex, geographically dispersed business models in an environment in which the “Blue Sky” scenario was replaced by a considerably more “Turbulent Sky”.
Artificial Intelligence is likely to make great contributions in the next few years when applied to customer service support networks, IT network oversight as well as in other areas. With the rapid proliferation of Artificial Narrow Intelligence [ANI] across the geographies of the Industrialized World during these past five years, it’s likely that American and European companies will accelerate their plans to repatriate substantial aspects of what had been off-shored over the past twenty-five years. We are rapidly approaching the point where many of the garments made in the sweat shops of Bangladesh and Sri Lanka, or even China, will soon be manufactured in Chicago, Los Angeles, New York, Miami and San Francisco using highly automated machines requiring minimal input from labor, and hence can be produced at a comparable cost. The days in which low cost labor from the Developing World was seen as attractive to Western Industrialists has been waning for some time and the current Coronavirus Pandemic and simultaneous emergence of ANI is likely to dramatically accelerate restructuring and change.
Perhaps five years from now, the world of business and internal commercial operations will look substantially different than it did in January 2020 when the Coronavirus Pandemic dominated the headlines as the biggest news story of the year. This day may come to be seen as the defining moment in which Western Industrialists retreated from the globalized business models conceived in the post-Soviet era of the 1990’s and resolved to adopt an on-shore approach that heavily leverages AI. This change is likely to be a debilitating and irreversible setback for the Developing World.
The author is an Essayist, Poet and Writer. His most recent book, The Génome Affair is a story about the rise of Artificial Intelligence and its impact on society.
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