Is the globalized world coming apart?



Key Takeaways


In the pre-globalised world, there was a bottom-up aggregation of cultures, now there are top-down effects.


The services sector has done well and has created wealth for millions of Indians.


Manufacturing has suffered to India’s policy choices. India should have taken a more mercantilist approach and intelligent tariffs also should have been used.


Free trade became a powerful culture and the advantages were not spread equally.


In a free trade world, the government’s control over certain goods becomes low.


The IT sector in India are good at incremental innovation, but not at radical disruptive innovation. IP laws and other issues need reform.


Most of India’s best-educated minds work in global companies and hence brain drain is still an issue.


Indian economy is not tightly coupled to the Chinese economy hence can be a good destination for global companies.


The new wave of economic localism is a mix of economic and cultural thinking of going back to the roots and more control of their supply chains.


It might take another 15 years to see a technocrat as PM.


Several multilateral organisations will be questioned on what their purpose is exactly.


COVID19 is a forcing function which is going to accelerate trends that were already in play.



Intro


Rajeev Mantri - Policy analyst

Aashish Chandorkar - Policy analyst

Srivatsa Subbanna - Data Scientist


Host: Roshan Cariappa



What is missing from the pre-globalised world


Cultures are becoming more or less homogenous and tend toward uniformity.


In the pre-globalised world, there was a bottom-up aggregation of cultures, now there are top-down effects.


Most cities are clones of each other and very less local elements have left.



How has India done in the globalized world


The services sector has done well and has created wealth for millions of Indians.


Manufacturing has suffered to India’s policy choices. India should have taken a more mercantilist approach and intelligent tariffs also should have been used.


India’s trade deficits with ASEAN countries has grown over time and free trade agreements have not helped India much.


Going forward India should explore newer service markets and attract more manufacturing projects.


Free trade became a powerful culture and the advantages were not spread equally. Only a few countries become powerful. Now China and the USA want to run the world by 2050.


In a free trade world, the government’s control over certain goods becomes low and this effect is felt more acutely during bad days.


The manufacturing of essential goods will see a massive rethink.


Size matters in trade and different rules apply to bigger nations since they have their own needs.



India’s IT sector and innovation landscape


The information technology sector in India has done well on business continuity.


The IT sector in India are good at incremental innovation, but not at radical disruptive innovation. IP laws and other issues need reform.


MSME IT firms focus on survival and not on innovation.


The IT sector has grown since there is no political intervention in this sector like it appears in manufacturing and other sectors. IT innovation can be stretched to fields like telemedicine and financial services.


Most of India’s best-educated minds work in global companies and hence brain drain is still an issue.


Policies encouraging the brain drain and incentivising the talent to stay back can see a rise in breakthrough.


Virtualisation will see a huge push due to COVID and new technology that removes personal barriers will see massive innovation.


Manufacturing will see new innovation due to virtualisation and see design stages will move to the cloud.


Indian economy is not tightly coupled to the Chinese economy hence can be a good destination for global companies to land here. India has the right scale and talent.



Social and cultural implications of localism


The new wave of economic localism is a mix of economic and cultural thinking of going back to the roots and more control of their supply chains.


There will be a clamour to localise in most countries. The inequality has to more to with competition laws than globalisation per se.


In terms of competition law, India has adopted the European approach as in if the firm is dominant in a market it is seen as grounds for anti-competitive intervention.


Central banks’ action today have no playbooks and theories in the past. No one knows what is going to happen in the near future.



Platform power and a tech PM in India


Older voices are getting less importance and voters now believe in people who have run businesses globally.


Tech people are open-minded, hardworking and understand risk. PM Modi is somewhat similar in these respects. -


Pure technocrats may not be a Prime Minister in the near future but might become executives. It might take another 15 years to see a technocrat as PM.



The relevance of multilateral agencies


Agencies like WHO are under the scanner, several multilateral organisations will be questioned on what their purpose is exactly.


There is a new opportunity to create an actual usual partnership in the international community. These partnerships will be less about politics and more scientific cooperation.


We have to wait and see how much of deglobalisation talk is an overreaction.











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