The Sting of Globalization 5.0

It was less than a year ago when I wrote about the fourth iteration of globalization.  I thought this particular sub iteration of offshore development and market rebalancing (i.e., Globalization 4.x) had a few additional years of existence as it adjusted its principles gradually to a new global “release level.”  In times of great uncertainty and turmoil, prediction is indeed a fool’s game.  Much has changed and a re-evaluation of the prior discussion must be undertaken.

What has been so wicked is the speed, breath, and depth of change facing a vast array of supplier segments.  Lenders, brokers, outsourcers, associations, lobbyists, servicers, and securitizing Wall Street firms are all paying their retribution for unwittingly participating in the global wealth rebalancing and unbridled speculation.  The traditional value chains and profit models have been broken, buried, and cemented over as a stunned consumer bearing the brunt of widespread short-term practices pays a very heavy toll. 

From the ashes of many industries, a new path is becoming increasingly apparent from the anecdotal evidence.  Indeed, there are several new fundamental shifts and macro implications that may have a lasting and marked impact on Globalization 5.0.  So what sets apart Globalization 5.0 from its prior iterations?

There is a great deal more that needs to be articulated and mapped out in an effort to properly frame the next iteration of globalization for services delivery.  Some are becoming clear, but much has yet to be written.  Regardless of the changes potentially advocated by Globalization 5.0, there are several caveats that may impact its ultimate direction and an organization’s choice / contractual terms:

The new global reality is very simple – one country or ideal cannot prosper at the cost of another.  That was a hallmark of prior iterations transplanting manufacturing ideals to deal with services sourcing.  With global wealth having risen by over 200% in 25 years (i.e., approaching $150 trillion USD), the old Bretton Woods ideals that implicitly governed financial markets and back-office processes, has shown its age.  Now, with two-thirds of global wealth comfortably in non-domestic markets and rising, the value equations that coincided with Globalization 4.x appears to be in its closing chapter.

However, there are many dimensions and cultural cross currents that must be taken into account.  A crystal ball I do not have and much can still change or proven to be inaccurate.  Accountability and responsibility for delivery, governance, innovation, and transformation will be different – that is a certainty.  The old models are broken, their advocates are angry, and the buyers very scared of anything that is longer than 90 days.  Yet, the answer showing up every day and they are not as we encased them in the past.  Suffice it to say, a new book is being written using a vastly different outline, players, and scenes. 

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