Learning From the World, or Globalization Inverted

Despite street protests and fiery critiques, globalization marches on. World trade should grow 8 percent in this year’s second half, and 10 percent in the next six months. China and Russia are bending over backwards to get full and official standing in world trade circles. Jordan, Turkey, Brazil, and others are bravely pushing aside harsh domestic opposition to open their economies.

The icing on this cake is the Digital Age promise of a borderless electronic marketplace benefiting Andean peasant women selling alpaca sweaters and automotive giants buying parts by the billions.

Western Europe: Colliding World Views

We’re not there yet. Western Europe does use one currency (U.K. excepted), and you can easily ship a package from one end of the continent to the other. But there’s no common language, air traffic is a patchwork, and the electric plugs are all different. Homogenization doesn’t happen overnight, and that’s just as true online as off-.

European e-commerce is still a bit jumbled. The European Union (EU) has largely stopped nations from erecting barriers but not from proffering incentives. Gibraltar and Ireland lower corporate tax rates for e-commerce companies; Britain and others counter by lowering capital gains tax rates and increasing research and development (R&D) tax credits.

Information policy is also in motion. Yes, rules for moving data across European borders have been rationalized and pan-European guidelines for the use and management of personal information have been promulgated. But much is still contended, even in the realm of legitimate information-based business activity.

For example, a leading medical-data-collection company is so efficient in tracking pharmaceutical drug sales in Germany, the EU asked it to share its data with other companies. It refused. Now, the EU is challenging that refusal as an abuse of the company’s dominant market position. In October, the EU’s Court of First Instance will rule on the matter… and that’s just one case.

Europe’s controversies over databases and e-commerce are without boundaries because beneath the issue level, there’s conflict at the attitudinal level. The head of the e-commerce unit of Britain’s Department of Trade and Industry put the root conflict simply: Some see e-commerce as an opportunity to be developed; others see it as a challenge to be governed. These colliding worldviews will continue to spark controversy.

Asia: Some Fundamental Issues

Asia is even worse. Multiple languages and currencies are only the surface-level challenges. Deeper, cash is preferred to plastic across the region. The resulting shallow penetration of credit cards constricts e-commerce potential. Commerce in content is particularly difficult because piracy in all forms — movies, games, music, and software — is rampant. As for political content and related rights, many Asian governments are openly and officially opposed to a free flow of ideas and simply don’t allow it. The final dampener to the rise of borderless e-commerce is a tradition of economic isolationism among Asian states many still find credible and compelling.

Globalization: Leveraging the World’s Diversity

Homogenization doesn’t come so easily, online or off-, in Europe or Asia. Peter Williamson, professor of international management at INSEAD, suggests the difficulties reflect a flawed strategy. That strategy, he argues, is for companies to take a perfected product or service and market it to the same segment worldwide. As competitors follow suit, markets around the world become increasingly more alike in products, brands, technologies, and so forth.

Protesters rail (legitimately) against both cultural imperialism and the disruptive impacts on local socio-politico-cultural-economic systems. Business executives complain of losing expensive and fleeting advantages in no-win games of global copycat and catch-up. Both groups might be better served, Williamson argues, by inverting globalization. That is, not by using it to spread the same thing everywhere, but by using it in the other direction: to find, seize, and leverage the diversity of the world. The benefit for business is the pockets of uniqueness dotted around the world provide the raw material businesses need for innovation and differentiation.

The advice taps an irreducible truth. Every “particular instance” articulates more clearly its human dimensions than aggregate expressions of the same phenomena ever could. The particular possesses more meaning. Here are three widely divergent examples from a global vantage point:

• Germany’s protection of individual privacy is among Europe’s strongest. At the same time, its national identity system requires regular police registrations of one’s address, phone number, co-residents, changes of residence, and other personal details. Germany’s balance of the right to privacy and the “duty of publicity” is a local solution. Its value to all comes in part from the specific local past from which it emerges.
• DoCoMo’s i-Mode cell phone service popularized text-based messaging. Although envisioned as a delivery system for user-selected streams of news headlines, sports scores, addresses, coupons, and other content nuggets supported by subscription or advertising, peer-to-peer messaging rapidly became popular with teens everywhere thanks to lonely salarymen looking for dates.
• The spread of regional institutions and sentiments across Europe also stimulated a flowering of localism, especially online. City sites — not only London, Rome, and other capitals but also smaller jewels such as Bologna, Amsterdam, Prague, and Barcelona — were among the most ambitious, participatory, and frequently visited for the vitality and utility of their obviously authentic information.

The particular is always more interesting, more full of meaning and probable appeal, and more fertile soil for business innovation and brand differentiation because it’s filled with, by, and for human beings and their projects.

The Internet is a good way to get at it. Unlike other media, the Internet has a return path. It can listen. It can even converse and co-evolve with correspondents. It can capture diversity by cultivating and culling it. Obviously, we don’t yet have a toolkit of best practices for seeking, identifying, and unlocking or appropriating these pockets of uniqueness among employees, customers, and others. But opportunities for experimenting are available at every multinational enterprise or agency.

As usual, it’s just a question of convincing someone to foot the bill.