Are We Losing the Globalization Debate?
THE FREE-TRADE MESSAGE IS FAILING BECAUSE THE U.S. DOESN’T GET IT.
April 1 2005 by Chief Executive
American business leaders who believe in free and fair trade are at risk of losing a significant battle. The small but vocal anti-globalization movement has pushed its message forward with great force and tenacity. We’re facing a significant disconnect with the greater public. A recent NBC-Wall Street Journal poll shows that 54 percent of Americans believe global trade is bad for American workers and our economy. These fears threaten to promote economic isolationism, which would be disastrous for U.S. business, workers and the economy.
One could argue that we are in the business community have not done a very good job framing and promoting the benefits of trade. The free trade message fails to resonate because it is not widely understood. Trade and economic literacy in this country simply has never ranked as a national priority.
On top of that, globalization is being cast as a political issue. Instead, it should be heralded as one of the greatest success stories of our era. As business leaders, we can control and turn around the bruised reputation of global trade. I would like to suggest five specific areas where we can do that:
First, we need to make sure our educational system is aligned with the global marketplace. We need to ask ourselves, “Are we producing enough engineers, scientists, technologists, materials researchers, manufacturing and trade specialists and other professional services that are in such huge demand and so needed to ensure our competitive vitality?” The answer, of course, is a resounding “No.” Almost 50 years ago, Sputnik not only launched the race for space, but was the catalyst for encouraging tens of thousands of American kids to study science, math and engineering. We need a similar wake-up call today.
Secondly, we need to make global trade literacy a priority. It’s encouraging to see the good work of several organizations in this area. One is the Southern Center for International Studies in my hometown of Atlanta, which has developed a curriculum to train every social studies teacher in the state of Georgia on global trade and geography.
A third way to meet the challenges of the anti-globalization movement is by supporting programs and policies that address training and career development for all of those who have been displaced by international trade. We can recite trade facts until we’re blue in the face€¦quot;but if you have lost a job, the facts mean nothing.
Innovation is yet a fourth way. Think back 25 years ago. People were afraid the U.S. was going to lose its jobs to Japan. Even greater numbers were worried about having their careers rendered obsolete by technology. That mirrors the fears we see today, only the names have changed. Instead of Japan, it’s India and China. Instead of technology, it’s globalization.
Obviously, the challenge of 25 years ago turned into opportunity. American business did what we historically have done best€¦quot;we innovated. Tom Peters reminds us that in the process of innovating, we replaced 44 million antiquated jobs with 73 million new jobs. The bulk of those jobs required knowledge of technology. The net effect was 29 million new higher paying, higher skilled jobs between 1980 and 1998. We need to continue our rich tradition of innovation. Innovation is dependent on legal reform as well as regulatory, tax and other financial policies that promote and reward growth, investment and risk. Without a climate that promotes them, innovation will wither.
The fifth and final way is to understand that in foreign affairs, corporate diplomacy is as important as political diplomacy. Anti-Americanism abroad is a significant concern. We have seen a serious slide in American business’s favorability around the world, and in a short time frame.
At UPS, we have been fortunate, so far, to weather this storm. Our international business is the fastest growing part of UPS. I believe part of that success is because we have been able to localize our brand and our operations. In fact, of the 40,000 non-U.S. based employees at UPS, less than 40 are U.S. expats. The drive to localize is also reflected through our corporate foundation, which now has a global strategic plan.
I believe that if we make stronger inroads in all of these areas, we’ll win the most important market share of all€¦quot;the minds of all those we touch.
Mike Eskew is CEO of UPS. This is adapted from a speech delivered to the U.S. Chamber of Commerce.