The idea that globalization has accelerated and no one is paying any attention is something I've been noticing for a while now. Here's a great article by Thomas Friedman explaining the point better than I can: It's a Flat World, After All. It's a great explanation of how America might need to wake up to the possibility of losing a huge economic advantage by ignoring the world as it changes around them. The key word in all of this really is innovation. What can you do with technology in this new world? America and the West seem to think they can regulate and control it to protect established industries. Control obviously means tying hands, whether it pertains to copyright and intellectual property or tariffs and taxes. This worked in the past because artificial barriers were combined with real life barriers of distance, cost and means (we had the means and they didn't). It was like building a castle on a hill, we were powerful because we had the hill AND the castle.

Our problem is our hill sunk. The playing field is a lot more liquid than a few years ago and the weight of our mighty castle is sinking us into the mud. We're fighting people who are not bound by our controls and we're trying to fight with two arms tied behind our back. Now the castle is a liability, but everyone's been in it so long that we're scared to leave. Well, at least some of us.

China and India, however, don't have such restrictions. They never had huge corporations or castles and now they're running circles around us. Since the equipment of the new age is cheap and easy to get, they have suddenly jumped onto a level playing field where they are connected to the world and find that all natural barriers are gone and America's artificial barriers are irrelevant. Anyone can set up an online store and Fedex everything around the planet. Anyone can talk directly with a customer, whether around the world or right next door. Make a good product, cheaper and you can beat out the guy with the bigger country.

Just last week there was a great spot on NPR about how GM's market share has been vaporizing in America. We used to own car making and thought that only civilized societies with geniuses could make cars. We were right. The problem is we thought we were the only civilized country with geniuses and so we stopped trying to innovate. Now we have lost most of the global market share in cars. We used to have 100% (hell, we invented cars), now we have 21%. Only 1 in 4 cars in America are GM cars, and all of these numbers are dropping. Apparently, Oldsmobile, one of the many companies in GM, used to have a bigger market share than that back in the good old days.

People's first reactions are usually, 'We need to stop this!' That's what it was with cars, steel and anything else we can tariff. But that is increasingly stupid now. Why? Because we aren't the world's only market anymore. We don't control the market anymore either. China, India, Europe and Russia are buying, and they aren't buying what we're selling. They have cash and we aren't getting it. In fact, even though we try to tariff and control everything, we're bleeding cash to these countries. What we really need is to break down the barriers that are keeping us back. It's not like we'll stop other countries from doing it. If you develop something and patent it, someone in China will copy it without worrying about "getting caught". And now that the world is 'flat', they'll just turn around and sell it back to Americans over the internet. Happens all the time, and it ain't gonna stop anytime soon.

The problem, of course, is corporations. They are killing your future with laws and regulations designed to keep them on top. First, they support tariffs to "help keep jobs in America", then they outsource your division to China. They are doing it for themselves.

Another problem is we are paid too much. America, I'm afraid, won't be able to adjust to a world wide wealth equalizer. If wealth starts to be distributed evenly among these nations, that means we're in for a big drop. If every other nation's economy gets better, that either means that ours will stay the same while their's grows, or our's will shrink as they filter off our business. I don't know which one will occur, but we won't like it either way. But I think this effects corporations and not individuals. Corporations have the most to lose, in market share and money. If you start a good business on your own and can keep your costs down, you can beat a guy in India doing the same thing. As everyone knows, corporations can't keep their costs down (they outsource) and so they will be hit by this more than an individual will. Now's the time to be an individual.

Some have learned that they need to get out of the big corporate monster in order to get anything done. I think a lot of people have seen their parents slave away for a corporation that gives them nothing back in return. They've seen the stifling of innovation and many are going out on their own with an understanding of the new model. These are the people you will never hear of. They will not be famous and will not be on the cover of magazines. They are well off, but not rich enough to gather attention. Because of that, you won't see the change. You'll still think everyone is working at large corporations. Most students don't even know there's anything outside of Corporate America. I know I didn't. My teachers actively pushed me into working for a company because it was safe and doing anything else was foolish. I'm kind of sorry I listened to them. They beat all the innovation and risk taking out of me and now I'm seeing that the biggest risk may be in listening to them.

It's getting closer to the time when a person with a halfway serviceable idea will be able to quit their job and make a decent living by selling to the world. Not 'make it rich'. You don't need to make it rich. If you can sell a product to .001% of the world's population, you'd be a millionaire. You don't need that. But soon, very soon, that won't be hard to do.

Update: Here's a good article from the New Yorker on how China and Japan are keeping us solvent. I don't personally think that there's one single reason why the dollar is falling but this is a good look at one possible reason.

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This entry was posted on Tuesday, April 5th, 2005 at 2:40 pm by Joe and is filed under General, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.