A retrenchment to globalisation…

IT offshoring to India gained momentum in the late 1990s helped by improved and lower cost telecommunications, the policies and actions of the Indian government, and a few major corporations who opened operations that tapped into the country’s huge young, lower-cost, graduate-level workforce. At the end of the 1990s the Badger was part of the due diligence team for the purchase of a small software product company in Bangalore. The purchase was a strategic investment to establish a presence in India that could ultimately grow into an offshore outsource and software development centre. Visiting India for the due diligence hammered home to the Badger that the true globalisation of  IT work was inevitable, and that India would a force to be reckoned with for outsourcing and software development.

Globalisation – the spread of products, services, and manufacturing etc, across borders producing ever stronger economic interdependence between nations – has been underway for the last two centuries driven by transportation and communication advances. The internet and digital technology, however, has accelerated it exponentially over the last 20 years, but the COVID-19 pandemic and its impact on global supply chains, for example, has highlighted that globalisation may have gone too far. It now looks inevitable that the pandemic, continued advances in digital technology and virtual connectivity, and changes to the world order due to the Russia-Ukraine conflict,  will trigger some retrenchment to globalisation as businesses and nations rebalance their risk and dependence on others.

The current level of globalisation has made us all extremely and rapidly vulnerable to events anywhere in the world. Globalisation will, of course, not disappear, but the Badger’s in no doubt that in the current decade we will see some retrenchment to address the vulnerabilities that have been exposed. A trot through the programme of events at this week’s 2022 World Economic Forum (WEF) at Davos shows that deglobalisation and the impact of ever more advancing technology permeates most of the sessions, either directly or covertly. The WEF at Davos claims to have achieved much over the past 5 decades, but most people – including the Badger – are hard pushed to name any of its achievements and consider it to be a talking shop for global elites in the world’s most expensive country. However, when those attending Davos are discussing globalisation, then you know there’s something to worry about and change is ahead!

Over the last 20 or so years, the small software company purchased in Bangalore has grown into the broader capability envisaged in its original strategic goals. Since change is perpetual, however, it is not immune to retrenching globalisation or technological advances that enable IT work to be done economically without offshoring at scale. No sector is immune to retrenching globalisation, and this decade is already unfolding to be one of huge change on all fronts. Hold onto your hats, it’s going to be a bumpy ride…  

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