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Executive Interviews: Interview with Pankaj Ghemawat on Global Strategy
January 2008
Pankaj Ghemawat Anselmo Rubiralta Professor of Global Strategy at IESE Business School the Jaime and Josefina Chua Tiampo Professor of Business Administration at the Harvard Business School.
What did you mean when you titled
your article in Foreign Policy Why
the World Isnt Flat? Is Tom Friedman
wrong?
The title says it all. Friedmans book
is one a genre of books that have
tried to attract attention in
Friedmans case, very successfullyby
painting visions of a globalization
apocalypse. Such books, which treat
everything as a Sign, pack great
rhetorical punch. The only problem
is that they donot fit the data. It is
probably no accident that the 450
plus pages of The World is Flat, for
instance, do not contain a single
table, chart or footnote. But as the
late Daniel Patrick Moynihan put it,
Everyone is entitled to his own
opinions but not his
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own facts. Probably a more interesting question
than why such books get written is
why they get read and referred todespite
being contradicted by not
only systematic data but also
personal experience. (Tried crossing
a border recently?) I think that Jean
de la Fontaines aphorism,
Everyone believes very easily what
they fear or desire, captures at least
some of the reasons: the paranoia of
those who fear world domination by
multinationals, the smug superiority
of elites that have been variously
characterized as Davos Men and
cosmocrats, the terminal insecurity
of those trying to be with it, the
naïve utopianism of
internationalists, et cetera. Whatever the reasons, the point is
that a reality based perspective on
global strategy leads to very different
prescriptions from rhetorical
appeals to the globalization
apocalypse. Of course, I should add
that realism is not meant to be a
recommendation to stay at home.
Columbus managed to believe that
the world was round but still took a
pretty interesting trip and
discovered some unexpected things
on the way.
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What most surprised you when
you researched the data on
globalization?
Like many people, the one indicator
of globalization that I was familiar
with before I started looking at the
data was the ratio of international
trade to gross domestic product
(GDP), which exceeds 25%. It was
only when I began to look at the data
that I realized that trade was an
outlier that the average extent of
globalization of the other measures
that I summarize in my article in
Foreign Policy, for example, was
better captured by the 10%
presumption. The other thing that surprised me
was that while some indicators of
globalization (e.g., trade to GDP)
have clearly reached much higher
levels than ever experienced before,
others have not. Thus, the ratio of
foreign direct investment to GDP has
broken new ground, but only
recently: it wasnot until the 1990s
that this ratio reached the levels
experienced immediately before
World War I. Other measures of
globalization-net capital flows as a
percentage of GDP or immigrationintensity,
for example, actually
peaked before the Great War! And
even recent trends aren't all positive.
For example, while it is impossible
to measure the internationalization
of Internet traffic precisely, there is
general agreement that the
international share and, particularly,
the intercontinental share of total
traffic is decreasing rather than
increasing, for reasons ranging from
surging peer to peer traffic to the
development of alternatives to the
United States, which until recently
was the hub for virtually all
international switching. Note that looking at these kinds of
dynamics takes care of yet another
apocalyptic evasion: that even if the
world isnt quite flat today, it will be
tomorrow.
1.
Global Expansion Case Study
2. ICMR
Case Collection
3.
Case Study Volumes
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