Trend - Globalisation Under Fire?
February 12th, 2010
Business analysts McKinsey say globalisation is under fire and declining due to decreased support for global trade liberalisation in the face of economic challenges. McKinsey sees increased protectionist activities, like the Buy-American clause in President Obama’s stimulus package, reducing the flow of people, jobs, goods and services. Their advice is to stress test your business models under different scenarios of world trade.
This macro-economic view may be accurate theoretically, but some industries have gone global in the past decade and this trend shows few signs of slowing down. Many major NZ businesses, Fonterra for example, are global in one respect or another relying on outsourced/offshore services to technology suppliers with heavy overseas presences.
The size of the traditional outsourcing market while growing is also becoming saturated as many companies completed their first or second wave of outsourcing between 2000 and 2005. The relative instability in currencies, has an impact on offshore companies and operations and cost structures. The coming of “cloud” computing and other sourcing models may be causing a ‘freeze’ in some off shoring decisions until the realities of these new options is clearer.
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