The defining characteristic of the economy of the Northeast, starting with the leading companies, has always been international openness. In the past three decades, this opening has been expressed not only by commercial projection, but also by participation in production chains stretching on a global scale.
However, the Covid-19 emergency has seriously questioned this power factor: first by reducing traditional export channels, then with disruptions in supply chains and increased freight rates and international purchases, casting a shadow over the strength of the current. recovery stage.
Many believe that this circumstance will not last long, and therefore, will soon return to the pre-Covid state, when the global trade network between countries was able to transport more than 30 trillion dollars in goods every year.
However, there are less optimistic assessments. In fact, if we look at some of the trends that were already emerging before Covid, we can see how two important factors were already slowing down the dynamics of international trade.
The first is trade policy, which, for various reasons – from the need to pay attention to the internal inequalities created by globalization, to the goal of protecting strategic industries, to growing environmental concerns – has taken an increasingly protectionist orientation.
This change of perspective began with the United States under Trump, but in fact continued with Biden, then fatally spread to China under Xi Jinping, also effectively investing the European Union, the traditional bastion of free trade.
Despite the unrealism of a return to mercantilism, the skeptical attitude towards free trade has found a strong boost from the Covid experience and will therefore be destined to characterize trade policy for the coming years. The second factor affecting global trade is the joint development of digital technologies and new business models.
The impact of new technologies on world trade is actually contradictory. While the development of integrated automation and robotics systems on the one hand has reduced the need for companies to move more labour-intensive stages, thereby shortening some supply chains, on the other hand, digitalization has made it possible to coordinate operations remotely. and some services, which brings them closer to the final markets.
Thanks to the latest generation of digital technologies, international integration is increasingly taking place through the growth of information flows that tend in part to replace traditional material flows.
It is no coincidence that once international trade slowed and foreign investment declined, the volume of data exchanged monthly by mobile devices increased significantly. If we think about the acceleration of corporate digitization and consumption by the pandemic (according to McKinsey in 2020, digital investments were made 10 to 20 times higher than pre-Covid programs), it is easy to predict that these processes are destined to be boosted.
Some digital technologies have been adopted to handle emergencies—teleconferencing and telepresence software, remote training, remote collaboration platforms, virtual hybrid real estate, digital twins, automation and integrated robotics—allowing greater remote coordination of productive activities, when they are not Effective integration of operations on a global scale.
The use of blockchain technologies opens up new models for organizing commerce, ensuring that processes and components in the value chain can be traced. The possibility of using the cloud reduces the fixed costs of access and thus lowers entry barriers even for small businesses.
Advances in additive manufacturing (3D printing) will be more complex for the geography of production, making it possible to “materialize” the resulting product from a remotely generated information flow near the user.
Although some of these technologies are only in the beginning, their development tends to follow an exponential dynamic, driven by both technical and social learning processes, and network externalities.
By observing the effects of the pandemic from this perspective, a paradoxical case emerges: if the health emergency, on the one hand, has put traditional global supply chains into crisis, on the other hand, it is pushing companies and consumers towards adoption. of digital technologies and systems that are being prepared for a new and more advanced stage of globalization.
In the leading companies in the Northeast, well represented in the top 100, these changes have been underway for some time, and it is no coincidence that overseas mergers and acquisitions have resumed vigorously. To be present in the richest markets, such as the United States or Japan, or in those experiencing continued growth, such as China and other emerging economies, companies today need a direct presence, without which the “political” costs of access can compromise the competitiveness of products.
Digital technologies provide an essential infrastructure for these strategies. However, it is necessary for companies to know how to equip themselves with qualified human capital, without which no technology, not even the most advanced, can be used productively.
Here we face another important issue for future development: the region’s ability to keep pace with new global business models for leading firms, providing support for its competitive growth and an anchor for reinvestment of profits generated across borders.
Creating innovative ecosystems with leading companies to attract and retain investments becomes the main task of a forward-looking industrial policy. © Reproduction reserved
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