Globalisation: a force to be reckoned with
The recent call centre boom in South Africa with world leaders such as Asda, Amazon.com and IBM making an entry into the country is an example of how globalisation as a mega-trend, is a force to be reckoned with.
Goods, services, capital and even people are able to move more easily across national boarders than ever before.
Business Process Outsourcing (BPO), which is facilitated through globalisation, has been integral in meeting the goal (to achieve 6% annual economic growth and halve poverty and unemployment by 2014) of the Accelerated Shared Growth Initiative for South Africa (AgiSA).
Globalisation drives competition, which in turn propels innovation and advancement. Global competition is a stimulant for the process of rapid and continuous change which is further propelled by the speed of modern communications and transport systems.
"It is often viewed as a danger and a threat, but globalisation is also a positive force that allows for the diversification of risk. South Africa also offers opportunity for local companies in that it is difficult for 'outside' organisations to rapidly gain critical mass- a ready example is the introduction of Virgin Money to this country, where the answer lay in partnering with a local company, ABSA. Recent economic currents have also highlighted the fact that South Africa is viewed as a developing economy subject to some volatility and dependent of foreign direct investment (FDI); confidence in the country tends to be fickle with FDI disappearing overnight," says Derek Engelbrecht, Director for Retail and Consumer Products at Ernst & Young.
"China, for example, has transformed itself from the worlds greatest opponent of globalisation into a committed advocate. China has been able to capitalise on its vast labour force to manufacture goods cost effectively, resulting in the export of enormous quantities of products to the developed world- it has effectively become the factory for the world," adds Engelbrecht.
He says that globalisation is not just a product-oriented force. "Look to India for a services perspective. The nation is focused on bringing Western business into India, in the form of outsourced services. India has combined its strong IT base with its large labour force to offer outsourced services to many developed nations and has grown into one of the most dominant offshore call centre players in the world, with South Africa gaining ground," says Engelbrecht.
"Be that as it may, there are effectively only two ways for South African companies to deal with the globalisation mega-trend- ignore it at their peril, or get involved by becoming globally competitive and making use of the infrastructure that can easily connect them to markets worldwide," concludes Engelbrecht.
