Blog: Olly WehringIs localisation the new globalisation?

Olly Wehring | 4 August 2008

Few terms can have become so synonymous with the rampant changes to the world community that we have seen in the last 25 years as ‘globalisation’. A product of the revolution in communications and the economic boom, at times it seemed that we would all eventually be speaking one language, whilst trading in one currency, shopping at the same supermarket, whilst wearing the same branded clothes.

The economic slowdown has already taken some high profile casualties. Is the trend of globalisation likely to be next? That’s what a piece in today’s New York Times asks. 

“The world economy has become so integrated that shoppers find relatively few T-shirts and sneakers in Wal-Mart and Target carrying a “Made in the USA” label," the piece says. "But globalisation may be losing some of the inexorable economic power it had for much of the past quarter-century, even as it faces fresh challenges as a political ideology.”

The argument is that cheap oil, which has quite literally greased the wheels of inexpensive transportation links across the world, may not return anytime soon, making the search for cheaper labour in far off locations pointless.

In addition “rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex,” the New York Times article said.

Whilst we are unlikely to see globalisation go into complete reverse there are already numerous examples of companies looking to move production of materials and goods closer to market to save on costs. Will drinks companies, for example, that have built a reputation for exporting products to consumers from their original production base (I can think of a number of beers and spirits that trade on the cache this brings) now look to produce their beers/spirits locally?

With the cost of shipping a 40-foot container from Shanghai to the US having risen to $8,000, compared with $3,000 early in the decade perhaps we are about to enter into a new phase of localisation.

The full New York Times article


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