The latest trend in Western discourse is not only to criticize or even condemn globalization for its various discontents, but also diagnose its demise. Nearly every day some analyst or other declares that globalization has effectively come to an end. A few sober voices counter that the demise of globalization has been greatly exaggerated; others point out that whereas globalization is not really ending, it is, in fact, evolving. Historians of economic trends like Princeton University’s Dr. Harold James point out that globalization comes in waves, as do isolationist and populist reactions to it, generally during times of uncertainty that come with industrial revolutions and other periods of rapidly expanding innovation. A quick glimpse around us leads to the ineluctable conclusion that globalization cannot be truly over given the general interconnectedness of our societies, which can challenged by specific factors but thanks to technological, communications, and social developments cannot fully revert to complete isolationism. Even the talk of the new “regionalism” does not cancel out globalization as a whole; it merely shifts the focus of particular institutional alliances and foreign policy trends towards particularism based on geographic or interest-defined parameters. The better question is: who and where is best positioned to take advantage of the best globalization has to offer?
Setbacks for Globalization in the West
First, it’s worth defining what “globalization” means. For the purpose of this article, globalization is “the growth in international exchange of goods, services, and capital, and the increasing levels of integration that characterize economic activity.” Worth noting that economic impact can be transformative on societies in a way that makes it difficult to separate the financial outcomes from social, cultural, and even political trends impacted by these exchanges. For instance, the integration of communications resulting from the exchange of technologies, provides opportunities for interpersonal connectivity that certainly plays a distinct role in global economy, but goes far beyond that in providing opportunities for every type of human connection and relationship imaginable, from those that have no economic benefit or basis to those that by far transcend anything measurable in material terms. Still, with every benefit there comes a concern.
The globalization of logistics and supply chains across the world has transformed international production and markets forever, but also brought about the mass outsourcing of various types of blue collar jobs and essential goods, which drew sharp criticisms from the Americans and Europeans who lost those jobs, or who, at the height of the COVID pandemic, found themselves at the mercy of the reimportation of those goods from other countries. These developments revitalized the focus on anchoring some of the key industries in the US in case of future emergencies; however, largely the landscape of US production of certain goods is changed permanently.
The economic discomforts brought about by the loss of these industries is felt not only through in both economic and political spheres – the clamor for economic protectionism such as tariffs on imports of foreign goods competing with US or European counterparts, support for “economic nationalists” and foreign policy isolationists on the political scene, and concerns about immigrants and foreign laborers taking away American and European jobs. The conversation around these fraught topics is complicated by the dismissive response of the policymakers. It is indeed true that competition whether domestic or foreign generally produces better outcomes and choices for the consumers and stimulates industrial and professional innovation and improvement. It is equally true that particular economic interests, regardless of broader universal value, will find it advantageous to limit anything that gets in the way of their own immediate economic or political advantage. Some tension and pushback is inevitable. It is equally valid, however, that many of the conversations regarding the impact of the global interconnectedness have not been addressed substantively, with the policymakers generally adopting a zero-sum approach on either side of the issue. For instance, when countries are engaged in the illegal dumping of goods or mass industrial espionage or currency manipulations, all of these policies undercut free trade and give an unfair advantage to the state engaged in these endeavors. Much of the fallout over globalization has to with lack of consistency in enforcing the rules that make the playing field fair and which keep the benefits of integration proportionate to the challenges. Another reasonable criticism is the lack of creativity in addressing grievances resulting from societal economic shifts.
The callous push for getting everyone who lost jobs in mining to code, as if these skills are easily transferrable or low risk or guarantee job security fueled much of the backlash that has led to the rise of the economic nationalists. However, economic nationalists themselves offered few if any solutions to complementary concerns that many jobs in the US in particular go unfilled due to lack of qualifications and training among the population. The same people pushing some of the benefits of globalization for the corporations profiting from lower labor costs of outsourcing blue collar jobs abroad failed to advance the idea that the back end of such policies should be to liberate Americans and others to pursue more innovative and better paying opportunities over generations. The benefits of the types of jobs that are now in demand as a result of the burst of the globalized innovations were never quite sold to the public; the distribution and preparation for the new “industrial revolution” has been uneven.
The result is the Western countries lost the “secure” blue collar jobs that were first outsourced to China and later moved to other, cheaper developing countries as China rose economically, benefiting from these policies – but on the other hand have not been able to take full advantage from the opportunities to move the society to a place of greater prosperity and advancement via these jobs, in various STEM areas. The result is the inevitable need to hire foreign workers to fill these positions which results in a pushback from the economic nationalists who mislead their followers over the fact that there are not in fact competitive Americans or Europeans being pushed out of the way by the visa holders rushing in. In fact, if anything, the recent effort to create more semiconductor development positions in the US in partnership with Taiwan was met with skepticism from the latter over American work ethic; moreover, the projects are still falling well short of recruiting the numbers of American workers who can fill the spots.
Technology Development in Non-Western Countries
Whereas during the previous industrial revolution that brought us steam engines, assembly lines, and automation of various processes US led the way in technological innovation, today hi tech spheres are more willingly distributed among Western and non-Western countries. US is still the leader in software development of such innovations as AI, particularly generative AI; however, China is investing the most into AI development compared to the resources allotted by the US; moreover, US industry has been criticized for insufficient vetting procedures in technology, which means Chinese scientists have made many of the recent breakthroughs with the benefit of US research and development but without having to put out the costs. IN other words, the US is losing out in intellectual property costs.
Likewise, Taiwan, Singapore, India, UAE, and Saudi Arabia are all pushing technological innovation in various ways whether through local talent or by attracting top developers to their countries in pursuit of innovation in areas such as chip technology, generative AI, VR, quantum research and more. BRICS is facilitating hi tech research and development partnerships among non-Western countries, which are growing in number in this economic alliance which excludes the West. Countries like Turkey, South Africa, Brazil, and South Korea are now well respected for their independent defense industries; Japan is playing catch up in the AI chip realm but is likely to become a leader in the near future. UAE and Saudi Arabia are working with China to develop drones and missiles; even if there is a concern that China’s role in the production may benefit from ill begotten US knowledge base, the end result is that these countries are increasingly independent of Western technologies and competitive in various areas.
Moreover, China moved early to acquire access to rare earths both domestically and in Africa; India, too, has put efforts into the mining sector. The result is that while on the policy level US and EU are touting the green energy revolution, they are dependent on exports from non-Western countries and scrambling to catch up to the market; China is driving US EV and cell phone companies not only out of its own borders thanks to national security laws and protectionist policies, but out of the much of the global market, particularly in the developing world thanks to lower costs on these products. India too is becoming competitive in the EV arena, and in Africa, Morocco is leading the way in automotive innovation. This leaves much of the US EV market a relatively niche line most suited to the wealthy.
Energy as a Geopolitical Tool
The push for decarbonization in the early stages invoked consternation from the developing countries as much as from various industries in the West. The process is costly; some would describe it as a luxury. Others perceived the apparent policy fixation on net zero emissions as another way of power and wealth redistribution, a form of cronyism inherently unfavorable to much of the non-Western world. However, as the power differential began to shift with a massive investment drive by China and later by India, and some of the GCC states, the monopoly on this sector broke. With Egypt hosting COP27, UAE taking a stand at COP28, and Azerbaijan slated to host COP29, non-Western countries are expanding global influence both in energy spheres, including those initially seen as a product of Western elitism, and in global affairs in general.
International gatherings, the use of oil and gas revenue to reinvest in alternative sources of energies and assorted related industries and projects, and the expansion of the non-Western voices into every avenue impacted by the “Green Energy Revolution” is once again leveling the playing field. While the US has become the number one producer of oil and gas and has in recent years simultaneously subsidized alternative energy projects, these policy shifts came at a cost. US has constrained many of its fossil fuel projects for domestic projects, levying high costs for its multi-trillion dollar green energy investments.
Inflation was the price to be paid, while the redistribution of subsidies and programs remains a challenge due to the shortcomings in local coordination. As US and Europe are struggling with their economic obligations and initiatives, while also floundering in political and security spheres, non-Western countries are becoming increasingly interconnected, projecting diplomatic, humanitarian, communication, and political power, and becoming the focus of globalized endeavors that are seen as far more successful. There are some factors to consider, which include the fact that some of the non-Western countries are authoritarian regimes or monarchies, or strongly centralized federal governments, where initiatives seen as national security or reputational priorities are advanced fairly quickly, and where the local oligarchies and broader economic elites are well positioned to take advantage of their relationships to take advantage of the broader government interests. In the West, the allocation of funding for “priority” initiatives varies greatly, and the public-private coordination is not always a smooth process, precisely because the private sector lacks this sort of cohesive coordination on such initiatives. On the other hand, the very spontaneity and competitiveness helps Western industries advance innovation. But the key takeaway, is where the West is struggling to reconcile its assorted economic and political goals, many of the non-Western states are sliding smoothly into these very initiatives and reclaiming that ground, at least in part thanks to the advantage of easily accessible resources that can be quickly allocated to any goal. The result is while many of the non-Western states are still dependent on the West on various fronts, they are increasingly seen as patrons of the various spheres of globalization that the Western states are struggling to implement, and increasingly the developing countries are now turning to non-Western states such as China, India, or UAE for backing on key logistics or infrastructure projects, investments into start-ups, or advancement of telecommunications or energy initiatives. The non-Western states are winning the globalization game.
Where US still retains advantage – and could still make a turnaround in its favor
The one area where US retains a unique strategic advantage is ironically the new front of the globalized telecommunications – social media companies. Part of it is that US platforms had the first movers’ advantage, and part of it was that in the early stages of their development Silicon Valley was a relatively unique phenomenon providing the resources that helped these nascent initiatives thrive in a favorable climate. Regardless of the reason, not only are these social media companies now multibillion dollar corporations that also host billions of accounts, but now these companies are diversifying into other types of business ranging from energy to AI to cybersecurity. The only exception reaching a comparable level of reach and success is Beijing-linked company Tik-Tok affiliated with the parent company ByteDance.
Approximately 170 million Americans have downloaded Tik-Tok, and countless influences and advertisers are taking advantage of that platform. However, when Tik-Tok was banned in India, the US-based SnapChat quickly filled the market niche expanding across the country and advancing in nine local languages, which indicates that in the absence of TikTok, other US companies could quickly fill in the gap. As a tool of influence, these technologies are arguably unmatched. Of course, how these companies are managed, regulated, and directed may be subject to endless inquiries and controversies. But the fact of influence – and global reach – in itself, is indisputable, and likely with time, these companies, if not stopped by anti-trust regulation, will have an even broader reach via the diversification into other enterprises.
Whether or not, this reconfiguration of interests as part of a mostly private market, with some subsidies, partnerships, and regulatory frameworks driven by the US government, will prove to be sufficient to counter or challenge the overall shift of globalization successes to the non-Western states remains to be seen. The direction these companies have taken thus far have resulted in love-hate semi-adversarial relations with the American people. Whether they can redefine themselves to bridge the gaps resulting from the mismanagement of the above-mentioned economic policies and instead reorient themselves to be drivers of greater opportunities, imagination, and hope inspiring millions of Americans and billions of others will make or break the next wave of globalization, already well under way.
