A global outlook is crucial for economic recovery - comment
The death of globalisation has been heralded by forecasters on several occasions in recent history. In each instance, they have been wrong. This time is no different. Even before this challenging year began, world trade had been conducted against a backdrop of protectionist tensions between the world’s two largest economies: China and the USA.
This had long been cited as the main ailment afflicting global trade. Covid-19 may well have changed that assertion, at least temporarily. But in the whirlwind six months that have followed, commentators have conflated short-term policies, enacted in the maelstrom of the pandemic, with longer-term strategies of trading nations.
Restrictions on the export of specific goods – namely medical supplies – and accompanying travel bans, should not be extrapolated to support the conclusion that countries that have previously enjoyed the fruits of international collaboration are ready to pull up their drawbridges. These are short-term, understandable reactions to safeguard health in a pandemic.
Examining longer-term policies and trade deals is more instructive. Given the whirlwind six months we’ve all endured, one could be forgiven for forgetting that Washington and Beijing actually signed the first phase of a trade deal back in January. The well-publicised disagreement over Chinese tech firm Huawei’s involvement in Western digital infrastructure may be testing this, but it is unlikely to be sufficient to sour the deal completely.
Looking ahead to the remainder of the year, the sabre-rattling and strongman politics from the current US administration may fade, if the presidential elections play out as the polls predict. Chinese-EU relations also look to be improving, with the ratification of a significant bilateral trade agreement. In the UK, we have our own deal with the EU to focus on.
Look at long-term policy over the headlines, and globalisation does not look to be in such poor health. Indeed international collaboration, far from being a thing of the past, is evidenced brilliantly by the collective work of world-leading academics and big pharma companies, unified behind the common goal of diagnosing, treating and vaccinating against coronavirus.
Across the country, and away from laboratories, an outward-looking, entrepreneurial approach is proving fruitful for many. Retailers and restaurateurs that previously traded solely from bricks-and-mortar establishments have pivoted to online delivery out of necessity, but found customers in further-flung areas as a result, for example.
None of this is to say that this sector, like so many others, isn’t faced with real challenges in the months ahead, but to highlight that widening your geographic view and exploring new markets can – and regularly does – prove effective.
If there is one silver lining to draw from the hardships of lockdown, it’s that doing business virtually has become more acceptable and practical than ever before. The proliferation of Zoom, Microsoft Teams, and any other digital platform you care to mention, has made it easier to put the right people in the right room at the right time.
Naysayers may point to a similar spike in videoconferencing in the aftermath of the terrorist atrocity of 9/11, which ultimately proved a false dawn. Business travel picked back up eventually. But, almost two decades on, there are notable differences that mean remote working and video conferencing is likely to gain more traction with businesses trading across borders.
For one, technology has improved markedly – in choice of platform, capability and quality – and will no doubt continue to do so. Smartphones, which brought video calling into the mainstream, are now ubiquitous. We have increasingly become digital natives, accepting of virtual interaction whether for social or business purposes.
Even pre-pandemic, the plethora of apps offering to streamline takeaway delivery and grocery shopping had been growing steadily. While there are obvious merits to meeting in person that are hard to replace – and some cultures still insist on it – boardrooms across the world will be questioning the business case to do so quite so frequently.
Pursuing a “virtual-first” way of working internationally presents businesses with an opportunity to make considerable inroads on key agendas, including sustainability, inclusion and wellbeing. Passionate advocates of international trade, like myself, realise that 2021, far from signalling the end of this activity, presents a real opportunity for it.
Overall volumes will almost certainly continue to falter for the remainder of this year at least. But the months ahead hold the potential to lock in and develop these new virtual ways of working. In doing so, we can create a culture built around cross-border interconnectivity and near-instantaneous international collaboration – circumstances in which globalisation, and businesses which harness it, will thrive.
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