Globalism—the ideology behind globalization that has formed the foundation for increasing interconnectedness and integration amongst different countries and cultures—is currently facing a range of threats. Today, due to rising nationalism around the world, leaders are prioritizing national interests over global cooperation. This has led to a proliferation of trade barriers, immigration restrictions, and other policies that restrict the flow of goods, people, and ideas across borders. Countries are racing to lure manufacturing away from friend and foe alike while restricting the flow of goods and capital. Mutual benefit is out; national interests are in.

Since the end of World War II, the United States has set the system of rules and norms for the world economy; this brought unprecedented growth through integration of economies around the globe and lifted hundreds of millions of people out of poverty. It also gave the West access to cheaper labor and other resources while helping other countries prosper. Overall, it was a win-win situation.

Though nationalism is often associated with bigotry and protectionism, there are also positive aspects, such as patriotism and good citizenship. It is logical that leaders advocate for their populus and look to their best interests. In Harvard Business Review, David Waldman and Mansour Javidan discuss the false dichotomy between globalism and nationalism¹. They propose a third perspective that has great potential to benefit all parties involved: a “paradox mindset … that merges both globalist and nationalist views,” as a solution to divided thinking. In this sense, inclusivity is placed as the highest value, including national interests and global interconnectedness.

While this may be ideal to aim for, it is undeniable that unequal distribution of wealth and resources within and between countries has contributed to rising social and political tensions worldwide. It has led to a strong backlash against globalization. Here in America, the previous and current administration’s abandonment of free-market rules for an aggressive industrial policy has dealt globalization a fresh blow. America has unleashed vast subsidies to the tune of $465 billion for green energy, electric cars, and semiconductors, all of which require local production while banning the flow of even more exports—notably, high-end chips and chipmaking equipment—to China. This policy came to a head when China demonstrated its long-distance missile capabilities outfitted with advanced chips for guidance and control. This was the final straw that justifiably caused America to completely shut off advanced chipmaking capabilities from China.

The next tech frontier is AI. Open AI and ChatGPT, for example, have taken the world by storm and become the most viral app in history, hitting over 100 million users in just two months. It’s no wonder Microsoft is investing $10 billion. AI will not only drive things like internet searches and content writing, it will actuate almost everything we know today. AI is the next evolution of the internet. Advanced computing, such as quantum computing, will propel AI which, in turn, will increase demand even more for advanced chips. Having big control over chip and chip-related high-tech manufacturing has become more than a tech leadership issue; it’s now a national security issue.

Economic conflict with China looks increasingly inevitable. The expectation was that as China became more integrated into the global economy, it would become more democratic. The opposite appears to be taking place. Combined with the millions of manufacturing jobs moved to Chinese factories, this has caused America to fall out of favor with globalization. However, it cannot be denied that China’s economic influence will affect trade in ways America must take into account. In a recent Bloomberg article², it was noted, “China’s reopening will return a flood of tourists to Southeast Asian hotspots, improving Chinese demand should help exports with ASEAN³ serving as its biggest trading partner, and China’s ‘growing footprint in ASEAN’ through foreign direct investment should rise.”

Taking a solitary, strictly nationalist approach will be expensive and difficult at best. America must also collaborate with emerging powers. 

In a few short decades, India and Indonesia are projected to become the world’s third- and fourth-largest economies. Their governments are providing significant incentives for businesses. For example, when building a chipmaking plant in India, the government will pay up to half the cost. When building one in South Korea, businesses get generous tax breaks. Southeast Asia has the potential to become the next powerhouse partner for America in a new form of globalization.

The same Bloomberg article stated, “Even as it slows to a 5% pace from 5.9% last year, ‘ASEAN may still be among the fastest-growing regions in the world,’ expanding more than twice as fast as the global economy in 2023.” It’s about time America looks for other partners since going it alone isn’t sustainable, nor is it smart. It will take bold American leadership that once again sees the intrinsic value of being inclusive with the right partners as a move toward doing what is best for the nation and the world. This new form of globalization is an enormous task that must be taken up urgently.

References

1. “The False Dichotomy Between Globalism and Nationalism,” by David A. Waldman and Mansour Javidan, June 18, 2020, Harvard Business Review.
2. “Southeast Asia is Having a Moment,” by Michelle Jamrisko, Jan. 12, 2023, Bloomberg.
3. ASEAN is the Association of Southeast Asian Nations.

Mehul J. Davé is chairman of Linkage Technologies Inc.