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| | Brought to you by Liz Hilton Segel, chief client officer and managing partner, global industry practices, & Homayoun Hatami, managing partner, global client capabilities
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| | | In a time of near-constant disruption and tension, the urge to disconnect seems tempting. But people, companies, and societies are deeply interdependent. Even as the norms of and attitudes toward globalization continue to evolve, globalization isn’t going away; it just needs to be considered with fresh eyes. As a new year approaches, it may be a good time to ponder a new way of thinking about our interconnected world and how business leaders can enable global cooperation to benefit both their companies and the world at large.
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| | | For four decades, the world economy has grown tremendously from the cross-border movement of trade, services, capital, people, data, and ideas: in other words, “globalization.” And for much of this time, multinationals have led the way in breaking through geographic and economic borders—benefiting greatly in the process. But “some analysts are now calling this paradigm into question,” say McKinsey’s Michael Birshan, Joe Ngai, Jeongmin Seong, and Olivia White. Cooperation has plateaued amid geopolitical conflict, supply chain disruption, and the broader discussion of who is benefiting (and who isn’t) from trends in trade. The challenge for leaders seems daunting, but the implications can’t be ignored. To deliver business value and enable future collaboration, the authors suggest three ways forward: raising the geopolitical fluency of leadership teams, rigorously assessing the interconnectedness between their businesses and the broader world (and the related risks), and diversifying organizations’ exposure to those risks.
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| One of globalization’s most maligned effects is the movement of jobs across borders, typically away from more expensive labor markets, such as the United States. But in many US industries, entrepreneurs and creators have been rewriting these rules—and, in some cases, reconnecting with their roots. Case in point: the jewelry start-up scene in Rhode Island, a hub of the US jewelry-making industry for centuries. As the industry shifted largely offshore in the past 50 years, jobs in Rhode Island’s jewelry industry took a massive hit. But a new wave of local designers are setting up factories near Providence, the state’s capital. “There’s an established jewelry ecosystem here,” said one business owner. “We can source all our components within a few-mile radius.” Indeed, McKinsey’s Achim Berg, Alexander Thiel, and coauthors have reported a “sustainability surge” in the fine-jewelry market, as sustainable practices—including the length of companies’ supply chains—become more top of mind for jewelry consumers. | | | Lead by reconnecting the dots. | | | | | — Edited by Daniella Seiler, executive editor, Washington, DC
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