Executive Briefings

All Business Is Global, U.S. Cannot Afford Economic Isolationism

Today's business leaders are plagued by issues. We've heard about several of them during the recent presidential debates. Insurance premiums, outsourcing, taxation, homeland security - they're just some of the topics atop the list of national concerns.

Not much has been said about international trade and the global marketplace. That's not surprising as trade and economic literacy in this country simply have never ranked as national priorities.

That's partly because these issues aren't widely understood. But it's just this lack of knowledge that feeds a small, but very vocal anti-globalization movement.

And it must be stopped.

There is no greater agent working for global peace and stability than the force of increased trade between nations because that bridge links more than commerce.

It links cultures and people. It links lives.

Yet when the German Marshall Fund polled Americans this summer it found that only 48 percent of respondents felt favorably about globalization. Just 29 percent felt favorably about international competition.

The Southern Growth Policies Board issued a report earlier this year following a series of globalization town halls conducted in 25 communities across the South. The No. 1 finding from those forums was that communities need to start raising public awareness of issues and facts related to globalization. There is simply too much misinformation out there.

The question we have to ask ourselves is "why?" Why would anyone want to retreat into economic isolationism? Whatever the reason, one could argue that the business community has not done a very good job framing and promoting the benefits of international trade.

What can be done about it? There are five specific areas where we in the business community can step up to the challenge of reversing anti-global attitudes.

First, we need to make sure our educational system is aligned with the realities of a global marketplace.

We owe it to our children to prepare them for a global future, starting in our elementary schools, moving into our high schools, and through the university level and beyond. We've got to ask ourselves are we producing enough engineers, scientists, technologists, materials researchers, manufacturing and trade specialists and other professional services that are in such huge demand and so needed to ensure our competitive vitality?

The answer, of course, is a resounding "no."

We must support and build an education system that will prepare our children to live and work in this new world. There's another kind of literacy, however, that is a good starting point for rethinking all of our educational efforts.

We need to make global trade literacy a priority in our nation. This is the second area where we need to step up.

It's encouraging to see the good work of organizations such as The Southern Center for International Studies in Atlanta. They've developed a curriculum to train every social studies teacher in Georgia on global trade and geography issues.

It's great to see organizations like the Center for International Business Education and Research carrying on good work on our college campuses. Or the work of the U.S. Chamber in creating grassroots programs like TradeRoots, which are helping build international trade awareness at the local community level.

And it's always a good sign when a leading institution like the University of Michigan now requires an intensive two-week orientation on global issues for all first-year MBA students.

You don't have to be a CEO of a multinational company to play a role. There's not an elementary school, a high school, a community college, a university, a World Affairs Council or local Chamber of Commerce that would hesitate to enlist the services of a business person who wishes to help students better understand the dynamics of world trade.

Perhaps the most obvious place to begin promoting trade literacy is within our own companies. This leads to the third way we can step up to the challenges of the anti-global movement: supporting programs and policies that address training and career development for those displaced by international trade.

We can recite trade facts until we're blue in the face. Facts like exponentially more jobs have been lost to productivity and technology than to India and China. Facts like certain jobs and certain products will always follow the path of lower costs. Facts like lower costs create more goods attainable by more people, improving life-styles and creating better economic opportunities.

But if you have lost your job, these facts mean nothing.

Re-enter Workforce
We really can't talk about trade liberalization without, in the same breath, talking about programs to help those who have been or who may be displaced. We have a responsibility to help those displaced workers get the training they need to re-enter the workforce.
Aside from direct training and development, one of the most powerful antidotes to dislocation is innovation. That's the fourth way that we can face the challenges of the anti-globalization movement.

Think back 25 years ago. A lot of people were afraid that the U.S. was going to lose all of its good jobs and economic clout to Japan. Even greater numbers were worried about having their careers rendered obsolete by the encroachment of technology.

That mirrors the fears we see today. Only the names have changed. Instead of Japan, it's India and China. Instead of technology - it's globalization.

Obviously, the challenge of 25 years ago turned into opportunity. And the reason is that American business did what we've historically done best - we innovated.

Tom Peters, author of In Search of Excellence and The Circle of Innovation, reminds us that in the process of innovating, we replaced 44 million antiquated jobs with 73 million new jobs. The bulk of those jobs required knowledge of technology.

Between 1980 and 1998, the net effect was 29 million new higher-paying, higher-skilled jobs.

We need to continue that rich tradition of innovation. Logistics and supply-chain professionals are a product of just such innovation. The infusion of global supply-chain practices over the last several years is credited as being one of the growth stars in creating new jobs. As the global marketplace continues to broaden, the role of supply-chain professionals will continue to evolve with it.

Globalization directly impacts the way your job is done, expands the skills needed to do it, and raises the expectations for ROI. In a recent article about burgeoning interest in supply-chain education, Chris Caplice, executive director of the master of logistics program at MIT, wrote: "Logisticians now must solve tough problems and lead teams that cross corporate, cultural and geographic boundaries."

The innovation movement in this country is also dependent on legal reform as well as regulatory, tax and other financial policies and incentives that promote and reward growth, investment and risk. This will enable us to build the infrastructure - the fiber, the roads, the airports and the bridges.

Without a climate that promotes investment and risk - innovation will wither. So, we need to do everything we can to ensure that climate is created.

And finally, the fifth way in which we can meet the challenges of the anti-globalization movement is to understand that in foreign affairs, corporate diplomacy is as important as political diplomacy.

The growing wave of anti-Americanism abroad is a significant concern for U.S. businesses. Of course, the roots of this growing anti-Americanism do not rest solely with the military actions taken in Iraq.

Many in the world have been upset for some time over what they perceive as an invasion of American culture and values and bad corporate behavior. This trend is not limited to Western Europe and the Middle East. We've seen a significant slide in American business's favorability around the world, and in a short time frame.

Our actions, our values and our beliefs are not only shaping the perceptions of our companies abroad, but they are forming impressions about our nation and the ideals for which it stands. That's why in the 21st Century, corporate diplomacy is becoming as important as political diplomacy.

We can work to turn the tide back around by making sure we're running not just socially responsible businesses, but that we're making and keeping commitments to our international customers, employees and communities.

It's a huge responsibility, one we must manage with care and diligence.

By making stronger inroads in all five of these areas - education, trade literacy, retraining, innovation, and corporate diplomacy - we'll win the most important market share of all: the mind share of all those we touch.

Leading experts remind us almost daily that a retreat toward economic isolationism would be disastrous for American business, for American workers and for the American economy.
It's important that Americans understand that all business today is global. Isolationism isn't an option.

Today's business leaders are plagued by issues. We've heard about several of them during the recent presidential debates. Insurance premiums, outsourcing, taxation, homeland security - they're just some of the topics atop the list of national concerns.

Not much has been said about international trade and the global marketplace. That's not surprising as trade and economic literacy in this country simply have never ranked as national priorities.

That's partly because these issues aren't widely understood. But it's just this lack of knowledge that feeds a small, but very vocal anti-globalization movement.

And it must be stopped.

There is no greater agent working for global peace and stability than the force of increased trade between nations because that bridge links more than commerce.

It links cultures and people. It links lives.

Yet when the German Marshall Fund polled Americans this summer it found that only 48 percent of respondents felt favorably about globalization. Just 29 percent felt favorably about international competition.

The Southern Growth Policies Board issued a report earlier this year following a series of globalization town halls conducted in 25 communities across the South. The No. 1 finding from those forums was that communities need to start raising public awareness of issues and facts related to globalization. There is simply too much misinformation out there.

The question we have to ask ourselves is "why?" Why would anyone want to retreat into economic isolationism? Whatever the reason, one could argue that the business community has not done a very good job framing and promoting the benefits of international trade.

What can be done about it? There are five specific areas where we in the business community can step up to the challenge of reversing anti-global attitudes.

First, we need to make sure our educational system is aligned with the realities of a global marketplace.

We owe it to our children to prepare them for a global future, starting in our elementary schools, moving into our high schools, and through the university level and beyond. We've got to ask ourselves are we producing enough engineers, scientists, technologists, materials researchers, manufacturing and trade specialists and other professional services that are in such huge demand and so needed to ensure our competitive vitality?

The answer, of course, is a resounding "no."

We must support and build an education system that will prepare our children to live and work in this new world. There's another kind of literacy, however, that is a good starting point for rethinking all of our educational efforts.

We need to make global trade literacy a priority in our nation. This is the second area where we need to step up.

It's encouraging to see the good work of organizations such as The Southern Center for International Studies in Atlanta. They've developed a curriculum to train every social studies teacher in Georgia on global trade and geography issues.

It's great to see organizations like the Center for International Business Education and Research carrying on good work on our college campuses. Or the work of the U.S. Chamber in creating grassroots programs like TradeRoots, which are helping build international trade awareness at the local community level.

And it's always a good sign when a leading institution like the University of Michigan now requires an intensive two-week orientation on global issues for all first-year MBA students.

You don't have to be a CEO of a multinational company to play a role. There's not an elementary school, a high school, a community college, a university, a World Affairs Council or local Chamber of Commerce that would hesitate to enlist the services of a business person who wishes to help students better understand the dynamics of world trade.

Perhaps the most obvious place to begin promoting trade literacy is within our own companies. This leads to the third way we can step up to the challenges of the anti-global movement: supporting programs and policies that address training and career development for those displaced by international trade.

We can recite trade facts until we're blue in the face. Facts like exponentially more jobs have been lost to productivity and technology than to India and China. Facts like certain jobs and certain products will always follow the path of lower costs. Facts like lower costs create more goods attainable by more people, improving life-styles and creating better economic opportunities.

But if you have lost your job, these facts mean nothing.

Re-enter Workforce
We really can't talk about trade liberalization without, in the same breath, talking about programs to help those who have been or who may be displaced. We have a responsibility to help those displaced workers get the training they need to re-enter the workforce.
Aside from direct training and development, one of the most powerful antidotes to dislocation is innovation. That's the fourth way that we can face the challenges of the anti-globalization movement.

Think back 25 years ago. A lot of people were afraid that the U.S. was going to lose all of its good jobs and economic clout to Japan. Even greater numbers were worried about having their careers rendered obsolete by the encroachment of technology.

That mirrors the fears we see today. Only the names have changed. Instead of Japan, it's India and China. Instead of technology - it's globalization.

Obviously, the challenge of 25 years ago turned into opportunity. And the reason is that American business did what we've historically done best - we innovated.

Tom Peters, author of In Search of Excellence and The Circle of Innovation, reminds us that in the process of innovating, we replaced 44 million antiquated jobs with 73 million new jobs. The bulk of those jobs required knowledge of technology.

Between 1980 and 1998, the net effect was 29 million new higher-paying, higher-skilled jobs.

We need to continue that rich tradition of innovation. Logistics and supply-chain professionals are a product of just such innovation. The infusion of global supply-chain practices over the last several years is credited as being one of the growth stars in creating new jobs. As the global marketplace continues to broaden, the role of supply-chain professionals will continue to evolve with it.

Globalization directly impacts the way your job is done, expands the skills needed to do it, and raises the expectations for ROI. In a recent article about burgeoning interest in supply-chain education, Chris Caplice, executive director of the master of logistics program at MIT, wrote: "Logisticians now must solve tough problems and lead teams that cross corporate, cultural and geographic boundaries."

The innovation movement in this country is also dependent on legal reform as well as regulatory, tax and other financial policies and incentives that promote and reward growth, investment and risk. This will enable us to build the infrastructure - the fiber, the roads, the airports and the bridges.

Without a climate that promotes investment and risk - innovation will wither. So, we need to do everything we can to ensure that climate is created.

And finally, the fifth way in which we can meet the challenges of the anti-globalization movement is to understand that in foreign affairs, corporate diplomacy is as important as political diplomacy.

The growing wave of anti-Americanism abroad is a significant concern for U.S. businesses. Of course, the roots of this growing anti-Americanism do not rest solely with the military actions taken in Iraq.

Many in the world have been upset for some time over what they perceive as an invasion of American culture and values and bad corporate behavior. This trend is not limited to Western Europe and the Middle East. We've seen a significant slide in American business's favorability around the world, and in a short time frame.

Our actions, our values and our beliefs are not only shaping the perceptions of our companies abroad, but they are forming impressions about our nation and the ideals for which it stands. That's why in the 21st Century, corporate diplomacy is becoming as important as political diplomacy.

We can work to turn the tide back around by making sure we're running not just socially responsible businesses, but that we're making and keeping commitments to our international customers, employees and communities.

It's a huge responsibility, one we must manage with care and diligence.

By making stronger inroads in all five of these areas - education, trade literacy, retraining, innovation, and corporate diplomacy - we'll win the most important market share of all: the mind share of all those we touch.

Leading experts remind us almost daily that a retreat toward economic isolationism would be disastrous for American business, for American workers and for the American economy.
It's important that Americans understand that all business today is global. Isolationism isn't an option.