The New Glocal Economy

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James Lee's picture

In many industries, we have seen the disappearance of jobs, the workplace, and the workweek.  Work happens anytime and from anywhere.  Yet, other businesses are comparatively unchanged. Why is this?  We currently have two separate economies running in parallel – the digital and the physical.

One of my friends is now telecommuting from Malaysia to the University of Wisconsin.  Another is a software developer who set up shop in Buenos Aires, simply because it features a lower cost of living and a better lifestyle.

Meanwhile, even basic language barriers are gradually disappearing.  Anyone who posts a design project on CrowdSpring may get dozens of proposals from around the world.  Some of the more entrepreneurial freelancers are now using online tools such as Google Translator.  This enables them to communicate with buyers and do business in a way that was simply not possible five years ago.

Customer service jobs were outsourced overseas a long time ago.  Over the next decade, expect more of the knowledge professions to follow.  Telemedicine may mean that your family doctor is calling in from Hyderabad.  Accounting is another profession that may soon find itself being relocated overseas.

While the digital economy has been going global, there are signs that the physical economy will become more localized over the coming decade.

Let’s take a look at a few reasons why this might be happening:

Cost.  Asian economics expert Joergen Oerstroem Moeller notes that European companies are “gradually discovering that transport costs erode the competitive advantages of outsourcing to China.”

Shipping from Asia made more sense when gasoline was cheaper than bottled water.  This is no longer the case.  British retailer Marks & Spencer is planning to shorten the length of its supply chain by only shipping products within its own hemisphere.  The company believes this may save GBP 175 million in costs annually.

Technology.  New technologies such as 3D printing and scanning have the potential to move production to the masses.  Instead of shipping to the other side of the globe, some types of manufacturing may move to the desktop, just like the printing industry did two decades ago.

We are just a few years away from being able to scan simple objects (such as repair parts) and then “faxing” them to customers who can print those parts on site – effectively minimizing delivery time.

Social Preference.  There has also been in increased interest in buying local artisanal goods when they are available, particularly among Generation Xers and Millenials.   For example, the rising popularity of the slow food movement has given new life to many traditional family farms.  The USDA now reports that there are over 7,800 farmers markets in the U.S.

Meanwhile, these trends are further supported by emerging social technologies, such as time banking and local currencies.

So, while the digital economy happens “anytime, anywhere”, parts of physical economy may evolve more slowly.  Workplaces that require the maintenance of physical facilities or equipment will continue to need people in traditional jobs, because flexible locations and hours do not work for everything.

Good business values will always remain the same – showing up on time, doing a great job, and being appreciative to customers will never go out of favor.
 
(Note, this article previously appeared on CSRwire.)

Comments

Resilience

Jim, Recently read your fantastic book. Especially like the chart of how the various generations looked at their careers. That helped me better understand my many nieces, nephews--and their kids--who seem to be floating through the workforce. Many of them are in what you call the Post-Nuclear Family. Found your blog in the frontice page. Will

Thanks for reading!

Great to hear from you, Will! It is really interesting how many intergenerational conversations the book has started. We are all dealing with related key issues, but it is interesting to see how the responses are varying among demographic cohorts.

About the Author: Jim Lee is the founder of Strategic Foresight Investments (StratFI). He is also the author of Resilience and the Future of Everyday Life, available on Amazon.com