The World's Not So Flat After All - ' Addressing Differences '

Differences between countries are larger than generally acknowledged. As a result, strategies that presume complete global integration tend to place far too much emphasis on international standardization and scalar expansion. While it is important to take advantage of similarities across borders, it is also critical to address differences. In the near and medium term, effective cross-border strategies will reckon with both—that is, with the reality I call semiglobalization.

We are positively awash in books on globalization. Between the mid-1990s and 2003, the rate of increase in globalization-related titles—more than doubling every eighteen months—surpassed the celebrated Moore's Law! But they all tend to assume (or predict) nearly complete internationalization. I disagree strenuously, but on the basis of data rather than opinion. Most types of economic activity that can be conducted either within or across borders are still quite localized by country.

Technologies and standards do enable connectivity and collaboration at a distance, and that is important. It is also likely that the separation of where certain services can be performed from where they are delivered will matter a great deal. Nevertheless, it's a gross exaggeration to jump from these kernels to proclaiming the "death of distance" based on improving communications technologies. Look at information technology services, which are often cited as an illustration of technologically enabled globalization. A total of 2 percent or 11 percent of such work—depending on whether one looks at the total potential market or only the immediately addressable part of it—is currently offshored. Or for an even more net-centric example that helps explain barriers at borders as well as exemplifying their effects, consider Google.

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