The COVID-19 pandemic has had a dramatic impact on the global economy, with the World Bank reporting that global GDP will drop 5.2 percent this year, marking the largest international recession since World War II.
In such a challenging environment, even the most open and robust international markets are feeling the sting. Singapore Prime Minister Lee Hsien Loong said countries like his “will have less stake in each other’s well being” and will operate in a “less prosperous world” in the future.
This isn’t a great sign for globalization. However, as the article below points out, international markets have become so integrated that even the significant impact of COVID-19 seems unlikely to completely disconnect countries and unwind the globalized economy. Put another way, the pandemic may be a “bend but won’t break crisis” for globalization.
If we’re in the “bend” phase now, what does a post-pandemic future hold? Recovery will certainly take time, but even the World Bank’s bleak outlook for 2020 contained a glimmer of hope for 2021, when GDP is projected to grow by 4.2 percent.
The Harvard Business Review notes that what companies are doing amid the pandemic could play a key role in shaping what that future looks like:
“…many pandemic-induced shifts could also strengthen globalization if they are not curbed by protectionist policies. Cross-border e-commerce expands export opportunities, especially for smaller companies. Forced experimentation with remote work, where successful, could spur more services offshoring. And even 3D-printing sometimes leads to more rather than less trade.”
For those of us in mobility, all of this could present plenty of opportunities, especially as travel restrictions are lifted. If 2020 is a low point for both globalization and the world economy in general, then the next few years could be marked by growth and expansion.
A volatile world of partially connected national economies expands possibilities for global strategy even as it complicates the management of multinational firms. Now is the time for global corporations to show their value by harnessing the best of the world’s capabilities to end the pandemic and bolster the recovery.