The new face of globalization: Seven key trends and the critical need to innovate

Abstract

In previous recessions, there were always regional and niche economies less adversely affected by the downturn. Now, for the first time in history, the world is facing a truly global and nearly concurrent economic downturn. In this study I would like to discuss what we at Arthur D. Little see as this crisis' seven key trends, and how businesses can best respond to them in terms of innovation, so that they can emerge from this enormously challenging period stronger than their competitors. In the first phase of globalization, the key industrial players exported production to countries where labor was much cheaper. Unfortunately, many of these companies also reduced their investment in research and development, and quality recruitment. As a result many of these internationalization strategies failed. Particularly erroneous was the unquestioned belief that one had to go global at any cost. In China, for example, many companies learned the hard way that copyright infringements were a problem and that quality was difficult to achieve with a constantly shifting workforce. In our consultancy work at Arthur D. Little, we have helped numerous companies navigate their way through these dramatic changes. We believe the following seven trends will be key to a company's survival and success in the coming years. © Springer-Verlag Berlin Heidelberg 2010.