Today's Interdependent World
Consider a world in which China accounts for more than a third of the world’s industrial output. Meanwhile, India and the major European economies chip in another 33 percent. The U.S., on the other hand, contributes a mere 2 percent of global GDP. Does this sound like a horror story of things to come? Perhaps. But these figures, according to research published by economist Martin Wolf, actually depict the global economy in 1820. In this time before the industrial revolution, western economies waited for sailing fleets and horse-drawn wagons to deliver riches like silk and spices from the Far East. Worldwide economies, of course, are nothing new. Political and economic empires have dictated the terms on which worldwide economies functioned for hundreds of years. Over the past 150 years, the world’s economic power has been concentrated in the hands of Americans, Europeans and the Japanese. We are now, however, likely entering another growth period for non-U.S. economies. Today, 95 percent of the world’s consumers, constituting two-thirds of its purchasing power, reside outside the U.S. By 2015, the list of the world’s top 10 economies, which already includes China, will grow to encompass emerging economies like India and South Korea as well. The twenty-first century, therefore, is no longer an age of empires or even of lone economic superpowers. We are instead witnessing a new era of economic interconnectedness.
Economic Breadth
Accenture, the global consulting company, describes this new global economic model, in which the uni-polar dominance of nations like the U.S. has ended, as the rise of the multi-polar world. Numerous developing economies now enjoy the economic power formerly held exclusively by empires. These new developing regions or countries contribute an ever-growing share of the world’s output, trade, and investment. According to Accenture’s report on this trend, called The Rise of the Multi-Polar World developing nations now account for some 49 percent of global GDP – and should, within two decades, surpass the combined GDP of what we now call the “developed world.” The report’s authors assert: “Globalization is now becoming a two-way process in which developing/emerging economies are changing from passive recipients to active shapers of globalization.”
Improve your Opportunities
Past newsletters reviewed how you can fit in and stand out to be a successful business leader. One of the main aspects of a FISO leader is his or her global knowledge. For example, it is striking to consider that a company like Microsoft, which many people assume fosters and creates its innovation in Redmond, Washington opened its large research center in China ten years ago. According to its website, “Microsoft Research Asia has grown into an organization that employs over 350 researchers and engineers, has welcomed more than 2,500 interns, has awarded over 250 Microsoft fellowships, has published over 1,500 papers for top international journals and conferences, and has achieved many technological breakthroughs.” The company partners with academics and continues to develop the highest standard of research.
This example shows that great talent is now dispersed and is no longer the domain of a handful of countries. In order for you to improve your opportunities, you need to be in a position to leverage your talent and seek others who can accelerate your development. Robert Frank, author of many books, including The Winner-Take-All Society, explains that the dynamic of human capital and its rewards goes beyond formal schooling as investing in education itself does not explain why some individuals succeed and others don’t. He writes “A person who embodies a certain level of human capital will realize its full value only if placed in a position with adequate scope and opportunity.” I would encourage the reader to take the responsibility to improve his or her own chances of being in the right position, by understanding the interconnectedness of today’s economic environment and search for a way to stand out to transform yourself and your company’s capabilities.
