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Globalization and the New Economy

Globalization is here, and it’s going to hurt. But, like most change this will be an awful lot of short term pain followed by long term gain.

Sounds like a management mantra, but it’s true. Globalization sucks for the people caught in the middle today (the high-tech workers who actually directly drove up the price of tech workers during the dot-com boom) and will continue to. There are two sides to the story, though and that is that in losing a little in the “first-world countries” we are actually pulling the “third-world countries” up to our level.

However, there are problems that I think people are only now beginning to see. For a start in India in general now that a small percentage of the populous has suddenly become relatively well paid, the cost of items in the economy is going up. This either forces the majority of the population to get increases in pay relative to the increasing cost or they run the risk of destroying the economy of their own country. Increase in wealth must be managed or it risks the entire economy. India is starting to learn this.

Now, so long as it’s all managed properly then India will be bought up to the level of the US in terms of quality of life, cost of living and so forth (well, maybe a little lower), then their jobs will all be offshored to some other country and so the cycle begins again. Over time this will have a generally levelling effect and will result in a world that is better placed to actually improve the lives of those living on the Earth rather than in-fighting and bickering. This is generally a good thing.

The utopia envisioned by science fiction writers for years will not come about without a great deal of pain. There’s going to be a great wailing and gnashing of teeth, and the economies of the first world countries will crumble. The high-horse that the West has ridden for centuries has finally run itself out, and we’re all going to feel the pinch.

There are ways to make sure you survive through this; be flexible. Be ready to work where and doing whatever it takes to make ends meet and support your own families. Don’t get too attached to the “everything on credit” lifestyle to which we in the West have become accustomed, that lifestyle is going to end in a huge and extremely ugly crash. The foundation of this crash was founded in the early 1970’s when the dollar value was seperated from gold. Then with the additional weight of the effect of networking and decentralization on top of that it will lead to a complete crash of our lifestyle. I don’t know if it will happen in our lifetimes, but I really believe it will happen.

We’re in a new market now where our jobs can be done anywhere. This is going to lead to a short term situation where jobs will migrate away from the West. We can’t prevent it. We can complain about it, and we can whine about it but the best we’re going to do is delay it and in doing so make the crash that much worse when it comes.

Yes, I’ve been hit by globalization myself but even I have to realize that the future is going to change radically. Many are going to hate it, I don’t claim to like the short term picture myself… but I have to accept it. In fact, as one of the drivers in the dot-com boom and the decentralization projects of large companies I also have to claim a certain amount of responsibility. Many of us in the tech sector who created the “new economy” do. We wanted this brave new world where the Internet made things possible like improving the lot of others in the world. Well, now our visions are becoming a reality… but the utopian vision we had has a down side that we’re all feeling.

Get used to it, or complain about it… but we can’t prevent it. Not now. Not ever. Life is not Star Trek, and we’re not going to find anything resembling that utopia without the pain that is to come first.

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