And other fantastic predictions that were not really true. We've known it for a few centuries now; it turns out the world is not flat after all. I was reading the March/April issue of Foreign Policy magazine and came across an article by Pankaj Ghemawat who makes a compelling case for why.
We've been talking about globalization for so long that we forget how local our businesses and relationships really are. It's interesting to observe how we're not really as integrated and connected as we thought. Think about how you need to have a passport to travel to countries like Canada when you didn't need one just last year. We'd like to think the Internet has leveled the playing filed, that connections are happening across borders.
They are, but not as rapidly and completely as we assumed or imagined they would be by now.
"[...] more than 90 percent of all phone calls, Web traffic, and investment is local. What’s more, even this small level of globalization could still slip away."
Ghemawat cites statistics to back up his take. For example: "the total amount of the world’s capital formation that is generated from foreign direct investment (FDI) has been less than 10 percent for the last three years for which data are available (2003–05). " If we look at the success of the Indian IT industry, a darling of flat world theory proponents, it is assured by U.S. capital. The country of origin still matters, even for capital.
Geographical boundaries are so pervasive they extend even to cyberspace. As in the case of telephone traffic, Web traffic within countries and regions has increased far faster than traffic between them. The author cites the example of Google hiring regional and local professionals to run their operations abroad, partly because of the linguistic -- and cultural -- barriers.
The article makes a very informative read and I recommend following it with some research through the links provided online. True globalization does not exist now, but it will. Every year we make predictions that turn out not to be true, especially at Internet conferences, it seems. Writer Nora Ephron wrote a candid post about her experience with statements like:
- The Internet is going to set everyone free
- The Dot.com are going to make us rich
- There's no money in the Internet
- There's a lot of advertising money to be made online
Do you see how this list progresses? About in the same way as other predictions have in the past:
- Ideas will spread faster
- Poor countries will have immediate access to information
- Entire electorates will learn what only bureaucrats knew until now
- Small companies will offer services on par with giants
- The communications revolution is profoundly democratic and liberating
When applied to social networks this may look like Shel Israel's research for Global Neighborhoods. All of these things are happening, just not as fast as we think they are. If you're reading this post, you are either a blogger, or someone who is already plugged in on what's happening with social media and businesses that are going online the native way, or trying to.
We like to connect with like-minded people, differences are important, but they are still a barrier to entry. We enjoy spending time with people face to face in the comfort of our local routines. Going to the local cafe' where everyone knows you is reassuring. Doing business with people we know and with whom we have developed relationships over time is still the hallmark to success. Credibility and reputation, even for brands, come from experiencing (I tested, felt, saw myself), not only from story (because they say so) -- as compelling as those may be.
What are the implications for marketing your business? I would be interested in your take, what would you add?
- Local is the way to go -- global brands have regional and local conversations
- Focus on what you stand for -- do what you promise and communicate what sets you apart
- Learn from your mistakes and from your customers -- spreading your story is a journey, invite the people who will support you through that journey along
We may be on our way to becoming global citizens, yet we still live in our neighborhoods. The Web has increased our chances of finding each other, but we're still pretty far from being integrated. Whenever I go back to my Italian home I stock up on locally produced beauty products and apparel -- I cannot find them here, even ordering through the Internet.