"Advancing the Promise of Globalization: The Road Ahead"

Students from The Fletcher School and visiting students from HHL – Leipzip International School of Management, one Europe’s top business schools, gathered on Friday, September 24 to hear Professor of the Practice Partha S. Ghosh speak on the future of globalization and the opportunities that lie ahead.

To provide the overarching theme for the lecture, Ghosh began by asking participants to guess the current size of the global economy. Citing the GDP of various countries including the U.S., China, Japan, Brazil and India, Ghosh noted,

"THE GLOBAL ECONOMIC STRUCTURE IS CHANGING AND BEING INFLUENCED BY CHINA AND OTHER DEVELOPING COUNTRIES. IN THE NEXT FIVE YEARS WE WILL CREATE A WORLD ECONOMY THAT IT NEARLY $75 TRILLION. THE QUESTION WE HAVE TO ASK IS: WHERE WILL THESE ECONOMIC OPPORTUNITIES GET CREATED?"

Ghosh, who draws from decades of global strategic consulting experience, addressed three main points: what have been the models and drivers of globalization; how do you sense opportunities in a rapidly changing environment; and what type of personality is required as a global thinker to ensure a leadership advantage.

By first summarizing the history of globalization all the way back to 500 BC when the Silk Road was established from Asia to China, and up to today’s digital era, Ghosh made it clear that in today’s world companies, such as Google, are global from day one.

According to Ghosh, today’s multinational must understand how to make adjustments to a global product to serve and appeal to local markets. Drawing from a recent conversation with one of the heads of McKinsey based in Shanghai, Ghosh noted, "The real challenge of globalization is how to make every market your home market. You have to treat the local environment as your own market." To emphasize this point, Ghosh used the example of the world’s largest zipper manufacturer, YKK. The company has 68 manufacturing factories located throughout the world and each is highly localized yet, the manufacturing and superior quality of the product is consistent.

Referencing his second main point – how a company can sense opportunities – Ghosh said globalization is how you take advantage of various types of arbitrage opportunities. These opportunities can be driven by any number of factors including cost, brand, customer, or knowledge. The part of the business that drives globalization differs by industry, and for a food company it may be the customer experience that you try to replicate globally, while a pharmaceutical company focuses on research and development and then may localize the molecule to the local market depending on the nature of the disease.

Looking ahead, Ghosh noted the next stage of globalization for companies in the 21st century will be integrating ecological practices and at the same time inverting the pyramid to drive innovation. Discussing the waste of materials and the affects on the environment, Ghosh described how companies have to move towards a conservation model and look at reversing the logistics of manufacturing in order to reclaim, recycle and repurpose materials. In addition Ghosh noted that the other key factor for companies to consider is how to invert the pyramid and bring innovation from within.

"The key question for companies will be, how do you create innovation recycling or in other words how do you bring innovation from the bottom of the pyramid to the top?" he asked.

With uncertainty ahead, Ghosh confidently expressed that the future holds numerous opportunities for wealth and innovation. Concluding the talk, Ghosh mentioned his latest research conducted in collaboration with The Fletcher School’s Center for Emerging Market Enterprises (CEME) and Tufts Gordon Institute, which aims to uncover the strategies, operational issues and leadership needed for emerging markets to succeed in the global marketplace. Specifically addressing the audience, Ghosh emphasized that the students, as the world’s future leaders, need to keep in mind the responsibility that lies on their shoulders and that to be a successful they need to be responsible, resilient and reflexive individuals.