Kickstarting a Global Startup Revolution
Many think globalization is well advanced but there are still many challenges to connecting the world; increased economic integration is expected to significantly improve global gross domestic product for all countries, including the most advanced.
Globalization began in earnest during the 20th century as countries turned to more outward-oriented trade. Countries that embraced the global marketplace experienced an improving standard of living. The most obvious example is Japan and, more recently, China. Singapore is now considered the most deeply connected country in the world, according to DHL Global Connectedness Index. In the Middle East, Lebanon is ranked sixth with the United Arab Emirates climbing the rankings each year. In Southeast Asia, Malaysia has been moving up in the rankings over the past several years.
Keys to Global Competitiveness
According to the Milken Institute, there are five key areas that must be present for a country to have and expand its global connectedness:
- good economic fundamentals
- developed financial services
- positive business perceptions of the country
- good institutional framework
- international standard policies
Downsides of Global Interconnectedness
Of course, globalization and interconnectedness have challenges and downsides. For example, regular financial crises can infect an economy, throwing it into recession. The South Korean currency crisis of 1997 is a case in point. At the same time, some countries, notably the U.S., experience capital outflows and increasing unemployment as companies take advantage of lower wages, fewer regulations, etc. This has led to the recent backlash in the U.S. toward a more isolationist stance.
Upsides of Global Interconnectedness
Outside of these problems most observers of the past 25 years acknowledge that the world has become more multipolar and that hundreds of millions of people from Japan, to China, to India have entered the middle class. While wars have not been eliminated, there are fewer wars now than at any time in recent history. It is expected that projects, such as One Road One Belt, will increase the interdependence of the Middle East, Europe, and China, ultimately making wars too economically and politically disruptive to be a viable option in most cases.
Some argue that globalization and global connectedness help create entrepreneurial spirit, opportunity, and, in the end, faster growth and better technologies. Attempting to sell into the global marketplace requires companies to look beyond local markets to global markets. If companies can cater to the needs of foreign markets, high-value outcomes are usually the result.
Creating Startup Ecosystems
According to Startup Genome there are eight factors that influence the success of startup ecosystems, which help entrepreneurs capture local and international markets. These include:
- market research
- global connectedness
- technical talent
- startup experience
- resource attraction
- corporate involvement
- founder ambition
Improving Global GDP
Buckminster Fuller described synchronicity as the process by which the energies of people and organizations could be a win-win situation rather than a zero-sum game. For those countries that realize they have more to gain than to lose from intergration, the 21st century is likely to be very positive. And for the world economy, better integration is likely to lead to better output, improving the lives of more of the world’s 7.6 billion people.