Have you ever noticed that the only business people who talk about level playing fields are those on the downside of a field that is tilted? The whole point of business is to find high ground, preferably surrounded by briars, moats, walls, and other barriers to entry. Therein lie profits; outside be monsters.
I was thinking about that last week, while giving a talk to a group of executives from the outsourcing industries - IT service providers, HR benefits managers, and others who are either buyers or sellers of business services. The speech was titled "Globalization - Are We There Yet?" The short answer is "No," of course. Globalization has been reshaping competition for more than a quarter-century, at least since Theodore Levitt described "The Globalization of Markets" in HBR in 1983; but it will be a long time before we can say we're mostly there, or even know what "there" will look like.
In this time, globalization has upended as many playing fields as it has leveled. Like the classic tilting labyrinth children's game, it requires players to adjust quickly to a continuously changing environment. That's because globalization is inherently reciprocal. The globalizing markets Levitt wrote about mean that you can find customers anywhere in the world. But the reciprocal is also true: Customers can search for sellers anywhere in the world, and play them off against each other. Similarly, the globalization of production means that companies can make or source anything anywhere, driving down their costs; but it also means that rivals can come from anywhere to compete with them - perhaps on cost, perhaps on some other basis.
Right now, desperate governments, often at the behest of desperate companies and their workers, are trying to tilt the playing field in a direction that favors home industries. The protectionist genie is very much back out of the bottle: The first question I was asked by my outsourcing audience was about protectionism; those of you who work in the EU are watching the community act like partners in a troubled marriage, wondering who will get which furniture, pictures, and children. We all know that's stupid in the long run: Who beggars his neighbor most beggars himself.
Still, the need for massive government stimulus is self-evident and governments put their citizens before all others: That's their job description. The trick is to design stimuli that define the future as much as they defend the past. Globalization guarantees that politically won competitive advantage will be evanescent. A business's right to win can ultimately be guaranteed only by its own capabilities.
Thomas A. Stewart is the Chief Marketing and Knowledge Officer of Booz & Company. Formerly the Editor and Managing Director of Harvard Business Review, he is the author of Intellectual Capital: The New Wealth of Organizations and The Wealth of Knowledge: Intellectual Capital and the 21st-Century Organization.
