From one globalization to the other : Lost in translation

Experience is a lantern that you carry on your back and that illuminates only the path traveled,” said Confucius. Will Nicolas Dufourcq’s fascinating book ” The Deindustrialization of France” prove this proverb wrong? And, more importantly, do we really know how to “read” globalization today better than yesterday? And failing to achieve “happy globalization,” why not be less naive and more ambitious and try to achieve “a balanced interdependence”?

Closer to a thriller than an economic analysis, this backward look at 30 years of deindustrialization sheds light on the multiplicity of causes… and the French specificity. Among the more than forty very enlightening testimonies from those who experienced it, including business leaders, a statement and a lesson from Pascal LAMY are particularly striking. The observation on deindustrialization, which began in the 2000s: “No, [I wasn’t surprised], but I recognize that we experienced it as a fuzzy phenomenon, an unclear moment. We didn’t understand the figures. I saw a phenomenon but I didn’t measure its scope, its dynamics, its slope.” A lesson: “It is fundamental to measure global trade in value-added more than in volume. […] [It is] value-added that should, in my opinion, be the true guide for industrial policy.”

Does the observation of the time still hold true today?

One thing is certain, no player in the global economy can decipher globalization and its mechanisms alone. And the tempting tendency to read through the prism of “blocks” that would reconstitute themselves obscures many phenomena at work – such as the painful awakening of certain countries that were seduced by the Chinese model -, the brutal impact of climate change on the habitability of certain areas – and consequently the resulting migrations – or the aspirations of a global civil society for more social justice and shared value. In addition to the major impact of technological disruptions on our societies.

The end of what has been called “happy globalization” calls for two urgent measures:

• The importance of agreeing on the observation to be made today regarding the failures of globalization;

• The need to define the economic model that we want to build, not only within our European borders but especially for, and vis-à-vis, the rest of the world.

Returning to more sovereignty does not mean the end of economic interdependence. Failing to achieve “happy globalization,” why not be more ambitious and try to achieve “balanced interdependence”?

“One thing is certain, no player in the global economy can decipher globalization and its mechanisms alone.”

In this context, what about “value added” in global trade? And more specifically, what is the expected role of companies in this context? The definition of the role and place of companies everywhere they operate will depend on the interpretation they make of the economic, social, environmental, geopolitical and technological upheavals at the global level. The sustainable development model promoted by the EU must, ultimately, help companies define their foreign policy and the new terms of public/private cooperation wherever they operate.

How? By clearly defining how companies take their fair share of a sustainable global economy, particularly in the renewed social contract that they will be able to propose and build with all stakeholders wherever they operate. But they cannot bear the burden alone.

Last but not least: short-term thinking. It is often the greatest enemy of sustainability and value sharing. The experience of French deindustrialization shows how much financialization (especially at the SMEs level) played a role in the decline and how, on the opposite, “family” capitalism or the German-style social contract anchored in territories and concerned with the long term have been shock absorbers.

What if the big problem of globalization in the last 30 years has been short-term thinking? And what if the real revolution tomorrow was shareholder-driven, to finally think about the medium and long term? This could set up the advent of shared value instead of volume.