World 3.0: Global Prosperity and How to Achieve It
It may seem we’re living in a borderless world where ideas, goods and people flow freely from nation to nation. But this widely held belief isn’t even close to reality, says Pankaj Ghemawat. In fact, more than 90 percent of all phone calls, investments and charity are local. Backed by a wealth of compelling data and drawing from his recent book “World 3.0,” Ghemawat presents his theory that our world is semi-globalized at best, and discusses how businesses must – and can – capitalize on opportunities to be “globally local.”
Ghemawat strongly advocates for a global economy where greater prosperity is created from more market integration. Although contrary to powerful human instincts, increased integration leads to increased prosperity and safety, broadening circles of cooperation. He illuminates the mindset shifts and policies needed to reap the rewards of a connected, interdependent and diverse World 3.0.
No Place Like Home: Realities of Global Expansion
Companies routinely overestimate the attractiveness of foreign markets. Dazzled by the sheer size of untapped and emerging markets, they often lose sight of the vast challenges of pioneering new and very different territories. Many companies, according to Pankaj Ghemawat, have failed globally because the deep local market immersion required to succeed is often sacrificed for commercial expediency. By basing his research on real-world case studies and with a mastery of economic data, he offers CEOs and business leaders refreshing and effective strategies for sustained business development in today’s economic climate.
Ghemawat maintains that the key to successful global expansion is to adopt a “cosmopolitan corporate strategy,” driven first by understanding and then adapting to local differences across geographies. He contends that the most critical ingredient is a diverse management team at the top: a team steered by a cosmopolitan leader who knows where the company is anchored and how dramatically different our world is in each locale.
Management and Market Failures
Much of the recent discussion by management thinkers of the problems of capitalism has tended to focus on management failures—the notion that managers fail to act in their companies’ best (long-term) interests. But it discounts the well established point that market failures may also play an important role in generating poor outcomes. A similar imbalance seems to characterize the business sector in general, at least in the U.S. says Pankaj Ghemawat. In fact, a survey suggests people with higher degrees in business administration and finance are likely to take market failures less seriously than people with equivalent degrees in other fields. Ghemawat delves into why taking both management failures and market failures seriously does more than simply stretch the mind: it also exposes an interaction effect in that management failures are likely to matter more in the presence of market failures than in their absence.