thenextwave

Globalisation, nations, and cities

Posted in aviation, brands, economics, politics by thenextwavefutures on 8 September, 2017

Maersk_Container_Ships_In_Loch_Striven_-_geograph.org.uk_-_1917442

With my Kantar Futures hat on I was asked to write a short piece for WPP’s house magazine, The Wire, on whether globalisation was over. Here’s the article. 

The long globalising wave of the later 20th century is over. Global trade is barely growing, compared to overall economic output. Cross-border bank lending is down, as are international capital flows. Hostility to migrants is one of the defining features of the present political moment. Everywhere, businesses, even transnational businesses, are thinking and acting less globally and more locally. National and regional champions are growing at the expense of multi-national competitors.

This should not be a surprise.

As Stein’s Law has it, something that can’t go on for ever won’t go on for ever. Globalisation created winners, but it also created losers. Twenty years ago Hirst and Thompson observed that the globalisation wave from 1870-1913—if anything more extensive than the more recent one—collapsed into nationalism after it had over-stretched itself. More than a decade ago, before the financial crisis, John Ralston Saul noted that globalisation was losing momentum and national ideas were reasserting themselves.

We have, in short, moved from the world of the 1990s in which credible politicians spoke only for those who supported globalisation, and the language of competitiveness and market reform that went with it, to a world where in many markets globalisation has no obvious advocates. One notable casualty, certainly in Europe, has been the parties of the social democratic left. Those which continued to talk the language of markets after the financial crisis have been outflanked and decimated.

But it is easy to see right-wing populist movements and think that this is the only political change that is happening. In fact that is just part of wider shift towards a place-based politics. The diagram, developed from some earlier work by Ian Christie, suggests that this politics of place still divides along the lines of “rights” versus “authority”, a traditional split since the French Revolution.

This, in turn, has implications for brands. Election results across a broad number of countries suggest that the markers of this left-right divide are younger vs older, better educated vs worse, and core cities vs towns and country. One of the paradoxes of the digital world is that just when it is possible to live and work anywhere, attachment to place has become stronger (opens pdf). If economics has produced a place-based political response, technology has produced an emotional response, in which values have re-surfaced.

And in a world which is more than 50% urbanised, the cities are where the money is. Part of the business response to the end of globalisation has to become more national. GE, for example, is focusing on regional centres in a response to protectionism. The head of the investment group, Blackrock, told staff earlier this year, “We need to be German in Germany, Japanese in Japan and Mexican in Mexico.”

But the other implication is more interesting. If cities are becoming centres of radicalism and diversity, and that’s where the money is, businesses have to follow. After a century in which business has been associated with conservative values, it is suddenly becoming imperative to be identified as progressive. This was seen, perhaps in extremis, in the way American corporations responded to the Muslim travel ban. And truth be told, many business leaders now hold beliefs that are closer to this more progressive, diverse, urban politics than to conservative populism.

The result: the purpose of business is suddenly central to reputation, among customers, suppliers, and staff. It is not surprising, therefore, that much of Kantar Futures‘ recent work has been about helping clients think through their brand and position in terms of developing a sharp and coherent view of brand purpose. This is a deep shift, driven by long-run fundamentals, that isn’t going to go away.

The image at the top of this post, of Maersk container ships parked up in Loch Striven, is by James T M Towill, and is published here under a Creative Commons licence.

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