Power Shift: How the Internet has Spawned a New Class of Powerbrokers in All Fields
How the Internet has Shifted the Balance of Power in All Fields of Our Lives It would be an understatement to say that the Internet has revolutionized and transformed all aspects of our lives. From the way we shop, work, and live, there is no part of our lives that has been fundamentally reshaped by […]
Cultural Aspects of Cross Border Mergers and Acquisitions
How Culture Impacts Cross Border Mergers and Acquisitions With the advent of globalization, it has become common for western multinationals to indulge in mergers and acquisitions with companies in the emerging markets. The process of entering those markets is usually through the Greenfield route that entails huge investments and takes time as the plants and […]
ERP – System-Auditing, Device, Text and Job Management
IN addition to functions covered by technical modules such as user’s management, License management, installation (as discussed in earlier papers), ERP technical module provides several other important functionalities. Some of these functionalities, as given below, will be very briefly discussed in this paper: Audit management Device management Text management Job management Audit management: Large organizations […]
Globalization and the Trickle Down Theory: Does it Work ?
The underlying premise behind globalization is that the transfer of wealth from the developed countries to the developing countries would eventually result in a scenario where those at the bottom of the ladder in the developing countries would benefit from the wealth flowing into their economies. The theory behind this is that if a Billion […]
Business Trends: The Coming Demographic Boom for Some and Bust for Some
Demographic Dividend We often hear the term, demographic dividend being bandied about in the media and in books. However, not many are aware what exactly it means and the implications of the same for business and society. The term refers to the advantages that countries have if they have youthful populations. This is because there […]
Much has been spoken and written about how the Covid 19 Outbreak would lead to a rethink on global supply chains as the overreliance on them has proved costly for many firms in sectors ranging from Information Technology to Pharmaceuticals and Manufacturing firms.
Indeed, with suppliers being based in multiple countries worldwide as are the manufacturing facilities, many global firms are feeling the heat from diversification of demand and supply chain value chains.
This is because the Covid 19 Outbreak has disrupted global supply chains and halted shipping and trade across the world.
As a result of this, many firms are struggling to replenish the fast depleting stocks and goods.
Moreover, the New Normal where global travel is limited and the emphasis is on Remote Work and Digitalisation of Value Chains means that outsourcing and offshoring would be redefined through changed business models.
For instance, with Immigration likely to be halted (as is the case in the United States), the Global Nomads or those IT professionals and financial services experts can no longer travel around the world to work or meet with their counterparts worldwide.
Moreover, there are calls for deglobalizing business activities as the Covid 19 Outbreak is being seen as a Body Blow to globalisation since diversified supply chains would now have to be shifted near home.
This is the so-called Near-shoring which many believe would replace Offshoring of business activities.
At the same time, the New Normal due to the Covid 19 Outbreak can be seen as a Blessing in Disguise for many IT and BPO (Business Process Outsourcing) firms as it is now beyond doubt that work can be done remotely and from home as well.
The ease with which these firms have adapted to the WFH or the Work from Home models shows that Western firms can now be convinced to move more work offshore as connectivity and Hi Definition Networks and other Infrastructure make such paradigms easier.
Therefore, there are many experts who believe that despite the Covid 19 Outbreak impacting global supply chains, digitalised work and Remote-shoring would benefit.
On the other hand, the same cannot be said of Pharma firms as theirs are built on a business model that thrives on sourcing of raw materials from multiple countries and hence, some disruption is likely for these firms.
Having said that, another POV or Point Of View is that Middle Income countries such as India stand to gain from the New Normal as they can attract Western firms seeking to diversify their supply chains away from China.
Indeed, the reason for this is the Very Bad Press that China is getting, especially from the US and more so from President Trump itself, who view it as the cause for the outbreak.
In a tense atmosphere where charges are being traded across the board, uncertainty avoiding Western businesses might be tempted to look for alternatives to China.
In addition, there are concerns that there would be a Second Wave of Infections in China that should worry Western firms and in this context; there have been reports that many Western firms are inquiring about potential opportunities for partnership with firms based in countries such as Chin.
Indeed, some South Korean firms have moved fast and are in the process of finalising such deals. It should be the case that Indian firms and the Indian government should also look to capture some of the business that is likely to move away from China.
The Make in India policy would be handy.
Of course, these are early days yet and hence, one has to keep their fingers crossed and not jump to conclusions.
The deep seated and deep rooted nature of the US-China partnership is such that it can easily weather the disruption due to the Covid 19 outbreak.
Moreover, with Millions of Chinese in the US, either to study or work, means that the latter too stands to lose if it forces its firms to exit China.
On the other hand, dealing with such uncertainty as is the case now means that nervous Western businesspersons would definitely be looking for some guidance.
Moreover, with increasing Xenophobia worldwide, global firms would be wary of deploying their expatriate staff in foreign countries and hence, the New Normal might very well mean that this category of professionals would now have to be homebound.
In addition, the New Normal can also lead to a radical overhaul of the BCP or the Business Continuity Planning as many firms have been caught on the wrong foot by the sudden Shutting Down of the Global Economy.
The point here is that one can make contingency plans for a week or two but not for entire months in advance.
Last, the New Normal is also likely to result in nationalism and protectionism and this is where Offshoring and Outsourcing firms have to be cautious lest they are caught in the Vortex of such emotions.
Indeed, already there is much extremity in views even by otherwise sane commentators and if it continues in the same vein, we might very well see the demise of globalism.
To conclude, we can only speculate about the New Normal and with Trends changing by the Day, it our advice to readers to keep watching for signs of how it is being shaped by events.
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What the Current Wave of Protectionism and Populism mean for the Future of Globalization and Free Trade
February 12, 2025
