Globalization is a hot topic. With Britain’s recent vote to leave the European Union and US Presidential candidate Donald Trump vowing to build a wall between the US and America’s third largest trading partner, globalization is a current buzz word on cable news talk shows, but it’s been a reality for entrepreneurs for years. But globalization is a two-edged sword.
For decades now, many businesses have been increasingly threatened, or shut down completely, by global competition. At the same time, many entrepreneurs have identified new opportunities and new resources as a result of global trade.
There was a moment perfectly capturing the clash between globalization and isolation, when President Obama took the stage at the Global Entrepreneurship Summit (GES) held at Stanford University in Palo Alto, CA on June 24.
In the hall were 700 smart, creative, capable entrepreneurs, from all corners of the globe. These were the type of people—if not the individuals themselves—building the next Apple, Amazon, Genentech. They were prime examples of the possibilities and inevitability of globalization.
But the first thing President Obama needed to address on that sunny Friday morning was the news that British voters had just decided to end their commitment to interdependence with Europe. A majority of British voters said “no” to globalization. They chose to go their own way, even if that meant additional trade barriers and greater isolation from their European neighbors.
The British vote wasn’t an anomaly but a reflection of the increasing animosity to immigration and trade in many countries, including the US.
While some of this antagonism is fueled by prejudice—and some leaders are more than willing to leverage prejudice to gain political power—some animosity comes from the very real concern about the displacement from jobs by immigrants and the damage done by international competition.
American small businesses have certainly felt this. They’ve lost customers, or been driven out of business, by competition from cheaper foreign manufacturers. They’ve lost jobs here in the US by competition from less expensive immigrants. If you’re a small apparel manufacturer in New Jersey or own a small construction company in Arizona, you’ve either embraced working with foreign suppliers and employing immigrants or you’re no longer competitive.
And yet, there is good news for your students, especially as they get their new companies off the ground:
- New markets are opening up and easier to reach for students from all over the globe.
- New resources for businesses—including talent resources—are available from all over the globe. Conversely, students with talents and ideas will find it easier to reach markets and customers globally.
- New global markets have grown for many American small businesses, with 97% of all exporters being small companies (up to 500 employees) and an increasing percent of the value of American exports coming from those businesses—33.6% in 2013.
- Most growth in exporting from the US comes from new, rather than existing, small businesses.
Isolation is not possible. Globalization is inevitable and beneficial. But Britain demonstrates that how globalization is handled by a country is critical.
The next great entrepreneurs are likely not to be Americans, or necessarily white, or male. The next Steve Jobs or Sheryl Sandberg is going to come from China or Kenya or Turkey or Brazil (or perhaps your classroom). The next great powerhouse companies, in all industries, are going to be headquartered in cities around the globe.
The takeaway for your students
If entrepreneurs want to survive in the 21st century, they must embrace globalization. But we, as educators, need to find ways to help budding entrepreneurs reach, serve, and sell to a global market.
“The world has shrunk,” said Obama. “It is interconnected… It promises to bring extraordinary benefits. But it also has challenges. And it also evokes concerns and fears… It’s also important… to find ways in which we are expanding and broadening the benefits of that interconnection to more and more people.”
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