Why will future globalisation be so different | Richard Baldwin | TEDxLausanne
Summary
TLDRThis talk challenges the traditional image of globalization as merely the exchange of physical goods, proposing a future where digital technology enables 'telework migration,' allowing services to be provided across borders. The speaker discusses the economic incentives and technological advancements, such as online freelancing platforms, machine translation, and advanced telecommunications, that are accelerating this shift. The rapid pace of digital progress, exemplified by the exponential growth in computing power, suggests that this new era of globalization is approaching faster than most anticipate, offering both opportunities and challenges for competitive and less competitive citizens alike.
Takeaways
- 🌐 Globalization is often visualized as cargo ships with containers, but the future of globalization will involve more than just physical goods.
- 😯 The speaker aims to change the perception of globalization and to stir a mix of anxiety and excitement about its future implications.
- 🛠 Globalization has historically been driven by the concept of arbitrage, where companies exploit differences in what countries are good at producing.
- 🚢 Shipping physical goods across borders has been easier than 'shipping' services due to the nature of services requiring the provider and buyer to be in the same place.
- 💡 Digital technology is changing the landscape by making it easier for services to be provided across borders, a phenomenon referred to as 'telework migration'.
- 🌟 The economic incentive for 'telework migration' is significant, with large salary differences between countries creating a push for service globalization.
- 🏡 Domestic telecommuting is expanding to a global scale, with companies arranging to hire foreign freelancers online, potentially reducing costs.
- 🌍 Online freelancing platforms like Upwork are facilitating the buying and selling of services globally, increasing the accessibility of foreign talent.
- 📚 Machine translation has improved drastically, making it easier for non-native speakers to participate in the global service market.
- 🤖 Advanced telecommunications, such as telepresence and telepresence robots, are creating virtual co-presence, further enabling global service provision.
- 📈 The pace of digital technology advancement, illustrated by the exponential growth in processing power, suggests that the shift to service globalization is happening faster than most expect.
- 🚀 While globalization presents opportunities for competitive individuals, it also brings challenges for those less competitive, prompting a dual sense of excitement and concern for the future.
Q & A
What is the traditional image of globalization that the speaker wants to change?
-The traditional image of globalization that the speaker wants to change is the mental picture of a cargo ship with lots of containers, which represents the movement of physical goods across borders.
What does the speaker suggest is the fundamental nature of globalization?
-The speaker suggests that the fundamental nature of globalization is arbitrage, where companies exploit differences in what countries are especially good at making and sell those goods elsewhere.
Why has globalization historically been more about goods rather than services?
-Globalization has been more about goods than services because it's easier to ship physical goods across borders than it is to ship services, which often require the service provider and buyer to be in the same place at the same time.
How is digital technology changing the nature of globalization?
-Digital technology is changing the nature of globalization by making it easier for people to perform services across borders, thus enabling 'telework' or 'tell-a-migration', which was previously difficult due to technical barriers.
What are the economic incentives for tell-a-migration according to the speaker?
-The economic incentives for tell-a-migration include the significant salary differences across countries, which make it profitable for companies to hire foreign freelancers who can perform services remotely at a lower cost.
What are the four factors the speaker identifies as enabling tell-a-migration?
-The four factors enabling tell-a-migration are domestic telecommuting, online freelancing platforms, machine translation, and advanced telecommunications such as telepresence and telepresence robots.
How does the speaker describe the impact of Moore's Law on digital technology and globalization?
-The speaker describes the impact of Moore's Law on digital technology and globalization by illustrating the exponential growth in processing speed of devices like iPhones, which has accelerated the pace at which digital technology is transforming the possibilities for globalization.
What is the significance of the iPhone 6 and iPhone 10 comparison in the script?
-The comparison between the iPhone 6 and iPhone 10 demonstrates the rapid pace of technological advancement, showing that the progress made in processing speed between 2015 and 2017 was greater than that between 1969 and 2015.
How does the speaker suggest that future globalization will affect different groups of people?
-The speaker suggests that future globalization will provide more opportunities for a nation's most competitive citizens, but it will also mean more competition for the least competitive citizens, thus raising both excitement and anxiety.
What is the speaker's final message regarding the audience's perspective on future globalization?
-The speaker's final message is that the audience, being competitive citizens, should be more excited than nervous about future globalization, but they should also be mindful of the challenges it presents to the least competitive citizens.
Outlines
🌐 Redefining Globalization
The speaker begins by challenging the traditional image of globalization as cargo ships and containers, suggesting that future globalization will be different and more abstract. They aim to change the audience's perception of globalization, raising both excitement and anxiety levels. The speaker introduces the concept of 'arbitrage' as the driving force behind globalization, explaining how companies exploit differences in what countries are good at producing. The focus has been on physical goods due to the ease of shipping them across borders compared to services, which are more challenging to globalize because they require the service provider and buyer to be in the same place. The speaker hints at digital technology as a game-changer in this context.
🚀 The Digital Transformation of Globalization
This paragraph delves into how digital technology is enabling 'telework migration,' where people can work remotely across borders. The speaker discusses the economic incentives for this shift, using the example of salary differences between a US and Polish accountant. They outline four factors facilitating this transformation: domestic telecommuting, online freelancing platforms like Upwork, machine translation advancements, and advanced telecommunications technologies such as telepresence and telepresence robots. These developments are making it profitable and technically feasible for service providers to work in one country while serving clients in another, thus expanding the scope of globalization beyond physical goods.
📈 The Accelerating Pace of Globalization
The speaker emphasizes the rapid pace at which digital technology is advancing, using the comparison of an iPhone's computational power to that of the Apollo 11 mission. They illustrate the exponential growth in our ability to transmit, store, and process information, which is doubling approximately every two years. This acceleration is making once-implausible concepts like instant, free machine translation a reality. The speaker concludes by reflecting on the implications of this rapid change for globalization, suggesting that it will involve more 'doing' than 'making,' and will bring both opportunities and challenges for competitive and less competitive citizens alike.
Mindmap
Keywords
💡Globalization
💡Arbitrage
💡Services
💡Digital Technology
💡Tel-migration
💡Telecommuting
💡Freelancing Platforms
💡Machine Translation
💡Telepresence
💡Moore's Law
💡Competitiveness
Highlights
The speaker aims to change the audience's perception of globalization and to evoke a mix of anxiety and excitement about its future.
Globalization has traditionally been associated with the movement of goods rather than services, due to the ease of shipping physical items across borders.
The concept of 'arbitrage' is central to globalization, with companies exploiting differences in what countries are good at producing.
Services have been less globalized due to the technical difficulty of delivering them across borders, requiring the service provider and buyer to be in the same place.
Digital technology is breaking down barriers to service globalization, enabling 'telework migration' where people work remotely across borders.
Economic incentives for tewerk migration are significant, with large salary differences between countries creating a potential for cost savings.
The speaker introduces the idea of 'telework migration' facilitated by digital technology, allowing for remote work across national borders.
Domestic telecommuting is expanding to a global scale, with companies adapting to include remote foreign workers.
Online freelancing platforms like Upwork are making it easier to buy and sell services globally, increasing the accessibility of foreign freelancers.
Machine translation has improved dramatically, becoming instant and free, and is set to revolutionize the availability of foreign freelancers.
Advanced telecommunications, such as telepresence and telepresence robots, are creating virtual co-presence, enhancing remote work interactions.
The pace of digital technology advancement is rapid, with processing speeds doubling every couple of years, accelerating the potential for tewerk migration.
An example given is the exponential increase in computing power between the Apollo 11 mission and modern smartphones, illustrating the rapid progress in technology.
The speaker predicts that future globalization will involve more 'doing' than 'making', with digital technology facilitating the globalization of services.
Globalization presents both opportunities and challenges, offering more chances for competitive individuals while increasing competition for others.
The audience is encouraged to view future globalization with a mix of nervousness for the least competitive and excitement for the opportunities it may bring.
Transcripts
[Music]
do me a favor close your eyes and
imagine what globalisation is now really
close your eyes and bring up into your
mind a photograph of globalization how
many of you are looking at a cargo ship
with lots of containers on it you can
wake up no man that always happens to me
once I gave this talk of Japan and half
the audience went to sleep what is it
about globalization I just don't know
are you all back today I'd like to
change that image of globalization in
your mind indeed I'd like to change the
way you think about globalization and
more than that I'd like to raise your
level of anxiety a little bit but also
your level of excitement a little bit
you see I think future globalization
will be very different than the
globalization we know today and the
globalization we've known in the past
future globalization will be about
things that we do not just things that
we make now that certain sounds rather
abstract now but over the next 12
minutes we'll walk down a path of facts
and logic and at the end of that journey
I hope that sentence makes perfect sense
and I hope that sentence will help you
understand why you should be both a
little more nervous and a little more
excited about globalization let's start
the journey by getting back to some of
your images of globalization these are
some classic ones what do they all have
in common
will they relate to goods things we make
things you can touch feel and see and
there's a very good reason for that it
has to do with the fundamental nature of
globalization globalization you see is
rather easy arbitrage drives
globalization
now let me explain what I mean by
arbitrage in this context by talking
about something other than globalization
just for a moment when people go to
Germany they try the beer because German
beers rather good and when they go to
France they try the wine because French
wine is rather special the point is is
that countries are especially good at
making some things and less good at
making other things and globalization is
driven by companies exploiting these
differences they make things in
countries that are especially good at
them and they sell them elsewhere a
critical aspect of this selling
elsewhere is that it takes place mostly
in physical goods things we make there's
a very good reason for that it's easier
to ship goods across borders things that
we make than it is to ship the things
that we do across borders what we
economists call services and when I say
services I mean your jobs if you don't
work in a factory or farm you're in the
service sector and I'm talking about
your job but ask yourself why is it
easier to ship goods than services
across borders and remember the reason
your job hasn't been globalized yet is
because it's hard to ship services
across borders harder than goods
the reason services are hard to cross
borders has to do with the fundamental
reality of services for many services
the service provider and the service
buyer have to be in the same place at
the same time and the technical
difficulties of getting service
providers from one nation into the room
with service buyers of another nation is
why globalization up to now has been
mostly in goods not services that's why
globalization has been mostly about
things that we make not things that we
do but here's the thing
digital technology is changing that
reality digital technology is making it
easier for people who sit in one nation
to do things in another nation now
before we look at how digital technology
makes that possible I want to look at
the economic facts that will make it
profitable
imagine we lived in a Star Trek world
where workers could teleport from one
country to another costlessly
the economic question is would they have
an incentive to do so
and the answer is yes
given the absolutely enormous salary
differences across countries a US
accountant for example costs five times
more than a Polish accountant and in a
Star Trek world polish accountants would
teleport into New York City accounting
offices in the morning and teleport back
home at night and in doing so they would
save those New York accounting offices a
whole lot of money now we don't live in
a Star Trek world workers cannot
teleport between countries but digital
technology is creating something I like
to call tell a migration tell a
migration people sitting in one nation
working in offices in another nation
arbitrage drives globalization and up
till now globalization has been mostly
in goods not services but that's not
because there's not an economic
incentive to globalize service jobs it's
because there are technical barriers to
doing so the next step is to look at how
digital technology is tearing down the
barriers to tell a migration I'm gonna
focus on four the first is domestic
telecommuting many of us have switched
to telecommuting a little bit how many
people here have telecommuting from
working from home say a day a week or a
day a day a month ok quite a lot of you
and our companies are arranging things
to make it easy for this telecommuting
now up till now most of this
telecommuting has been domestic but it
doesn't take a lot of imagination to
realize that this telecommuting will go
global having arranged things at work to
make it easy to slide in remote workers
our companies will find it profitable to
hire foreign freelancers online now
remote foreign intelligence won't be
quite as good as in-person domestic
talent but the foreign talent will be a
whole lot cheaper so what do you think
is gonna happen
that was my effort to raise your anxiety
a little bit how am i doing
the second is online freelancing
platforms this is how your company will
find those freelancers these are like
eBay but for services not good eBay made
it easy for us to buy and sell goods
online these are making it easy to buy
and sell services online freelancing the
largest one is up work it's amazing
millions of freelancers are registered
today on up work from over a hundred
countries and there's many other
platforms the third factor is machine
translation this is amazing just a
couple years ago it was like a party
trick or a rough first draft now it's
very good it's instant and it's free
it's on your smartphone right now your
tablets and your laptops you can use it
with Skype to talk to people who speak a
different language the option is called
Skype translator you can use it with
YouTube to watch foreign language videos
they put English language captions the
option is called auto caption you can
use it with emails Outlook mail Outlook
mail has an option called Microsoft
translator which lets you translate
emails into or out of French or German
or whatever now imagine how
revolutionary that is in terms of the
supply of foreign freelancers hundreds
of millions of talented low-cost foreign
freelancers
who were excluded from tell'em IDing
migrating up to now by poor language
skills will soon be speaking good enough
English or French or whatever and some
of them will be able to do at least some
of your job for less a last one is
advanced telecommunications these are
creating ways to make it seem that
service providers from one nation are in
the room with service buyers of another
nation without actually being there
here's one
it's called telepresence people who use
these telepresence rooms get the feeling
that they're all actually in the same
meeting when they're in fact in
different countries here's another one
called telepresence robots so it's like
a Skype screen but on a very simple
robot body the person on the screen is
controlling the robot so she can drive
around the office and look over your
shoulder to see if you're playing
solitaire or working on that project she
leaves a robot in the field office and
lights it up whenever she wants people
say that the physicality of the robot
increases as a degree of communication
so that's the second realization in our
journal we saw that teller migration is
profitable and we saw that teller
migration is possible the last question
is how fast is it coming and the answer
is it's coming faster than most belief
now this is a simple point but I've had
a lot of time getting this point across
to people so today I'm gonna try
something different instead of talking
about how digital technology is driven
by Moore's Law on the wonders of
exponential growth I'm gonna go with an
example that shows just how crazy it is
that our ability to transmit store and
process information is doubling every
couple years or so
this is an iPhone 6's it came out in
2015 it is a very powerful computer more
powerful than the computer that guided
Apollo 11 to the moon and back in 1969
but how much more powerful what would
you say a hundred times a thousand times
a million times the answer is it's a
hundred and twenty million times faster
than the computer that guided Apollo 11
to the moon and back in 1969 that's
amazing but it gets more amazing
this is an iPhone 10 it came out in 2017
and it is two-and-a-half times more
powerful than the iPhone 6s now when you
think about it that two-and-a-half times
means that there was more progress in
processing speed between 2015 and 2017
than there was between 1969 and 2015 and
guess what every two years we will see
even larger increments in processing
speed and that's why it's coming faster
than most belief it's why things that
seem implausible in 2015 like instant
free machine translation on your iPhone
are universal in 2018 so let's get back
to our sentence future globalization
will be about things that we do not just
things that we make digital technology
is making tell a migration possible and
it's coming faster than most believe it
means that people sitting elsewhere will
be able to do things in other countries
I hope this journey has changed the
image of globalization in your mind and
I hope along the way I've managed to
raise your level of anxiety a little bit
but your level of excitement should also
have been raised because of a very
simple fact
globalization means more opportunities
for a nation's most competitive citizens
even though it means more competition
for the least competitive citizens and I
look out here and I see a room full of
really competitive citizens so I think
you should be know that's not a joke
really it's true you guys are all
winners here so you should be more
excited than nervous but let's not
forget about the least competitive
that's why we should all have a bit more
nervousness and a bit more excitement
about future globalization thank you
[Applause]
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