[OPINION] Globalisation: Evolution not revolution
Globalisation has been a hot topic at this year’s WEF meeting in Davos.
It comes at a time when globalisation is being threatened by nationalism and protectionism. There is a criticism that while globalisation has clearly created wealth for the world as a whole, the benefits of wealth have not been inclusive.
In an interview at WEF 2017, Jack Ma (Founder of the Alibaba group, a family of successful internet-based businesses) spoke about how globalisation had to be more inclusive. This could be achieved by allowing more small and medium enterprises (SMEs) to participate in the fruits of globalisation. The barriers to entry into the global market would have to be lowered for SMEs. The Fourth Industrial Revolution has the potential to address these concerns and break down the barriers to entry for SMEs.
The internet has improved connectivity among people all over the world. It has changed how we interact, how we bank, how we entertain ourselves and how we shop. E-commerce platforms such as Jack Ma’s Alibaba use the power of the internet to open up new markets and shorten supply chains for SMEs.
SMEs remain an important part of the world economy and are important in the creation of Jobs. Plugging in the SMEs to the global trade platforms will ensure that the benefits of globalism are more inclusive.
It will take more than just the use of technology to lower these barriers to globalisation for SMEs, ambitious proposals such as the Electronic World Trading Platform (eWTP), made by Jack Ma at both the G20 and B20 summits, would have to be embraced and implemented by world leaders.
Jack Ma described the eWTP as “an international organisation with the overall goal of making it easier for SMEs to take part in global trade via e-commerce by simplifying regulations, lowering barriers to entry to new markets and providing small businesses with easier access to financing”.
The future of globalisation will remain a much talked about topic past the WEF 2017 in Davos with inclusivity on the top of the agenda. There does not need to be a revolution against globalisation but an evolution which addresses the criticisms and solves the real problems at hand.
For South African investors seeking long-term investment returns, it’s critical that our portfolios are cognisant of the trends around globalisation and how technology can potentially significantly enable fourth industrial revolution businesses – Jack Ma’s Alibaba being a prime example. These trends are certainly front of mind for Ashburton’s portfolio managers.
Rob Hamer is head of Alternative Assets at Ashburton Investments.
Kekeletso Diale is a credit analyst at Ashburton Investments.
For more news, analysis and insights on Davos 2017 go to EWN’s WEF portal in partnership with Ashburton Investments.