In the 1990s and the early 2000s, in the aftermath of the fall of the Soviet Union, companies continued their march across the world. The world enjoyed a stable and safe global environment with open shipping lanes from Asia to North America and Europe. The Suez and Panama Canals enabled ships to move quickly around the globe. Companies took advantage of institutions like the World Trade Organization to encourage greater global trade. Western companies began to offshore their manufacturing to cheaper labor sources overseas. Borders were open for the movement of people, capital, and goods. This had an adverse effect on workers in developed countries. Soon goods and services were spreading around the globe.
The internet enabled this change all the faster as companies were able to connect far-off factories with their headquarters. Services were able to be provided from nearly anywhere. E-commerce giants like Alibaba and Amazon opened up new markets for small sellers. People have become used to everything in their homes being made somewhere else. This wasn’t the first time international trade had gone global but never before had trade touched literally everywhere on the planet.
And then Covid-19 happened. Western countries were horrified to find that the PPE they desperately needed wasn’t made domestically. Ports and airports were clogged with shipments as borders closed and facilities closed to stave off the pandemic. The logistics backup is still affecting global markets and prices of nearly everything. Anything arriving by ship can be backlogged for weeks. Companies with stretched supply lines found shortages throughout their logistical systems and no easy way to solve the problem. The Japanese invention of “just-in-time” logistics could not handle the on-set of a global crisis. Globalization was in question before the pandemic and now globalization is dead in the water.
In this TED talk, we’re going to learn about what comes next. How can the global economy pivot to the post-Covid world?
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