It’s a Small World After All (mostly.)

I first heard the song at Tokyo Disneyland in 2004. To small I was to comprehend the deeper meaning behind the ride and why I was seeing animatronic penguins in Japan, but the song has stuck with me since then.

“the best of all possible worlds” – Voltaire

Years down the road, a little older and a little wiser, I’ve become keenly aware of the realities of the world beyond theme-park rides and puppetry, and understand my position as a person of privilege relative to many others in the world. Centuries ago, it wouldn’t have been possible for individuals to fly at a moment’s notice to countries around the world, nor would it have been possible for corporations like Disney to expand their influence beyond sunny California.

As posited by Thomas L. Friedman in The World is Flat, 1492 to 1800 saw the advent of Globalisation 1.0, the dynamic force in which was countries globalising, shrinking the world from a size large to a size medium. The grobalisation (a cheeky combination of ‘growth’ and ‘globalisation’) of Disney was spurred by the subsequent dawn of Globalisation 2.0 from 1800 to the late 20th century, the dynamic force in which was companies globalising. With developments in transport, communications and technology, Globalisation 2.0 shrank the world from a size medium to a size small, in the sense that flavours and elements from other countries, from various sectors of society (like culture, cuisine, politics, goods and services)  are right at our doorstep. This is even more so in the current age of Globalisation 3.0, spurred by the internet age that gave newfound power to individuals to collaborate and compete globally. Companies, both large and small, have been newly empowered in this era – Disney shakes in its boots at the ever-present competition faced in the entertainment industry from incumbents like Comcast or Viacom, or even at rising competitors in the theme park industry like Universal Studios and Legoland.

Multinational enterprises (MNEs) have certainly benefited from a shrinking world – the available consumer base has (ironically, despite ‘shrinking’) expanded to a global scale, with the most strategic companies constantly innovating to create products that can appeal to specific international markets. But where MNEs expand, shrinking (very unironically) consumer choice becomes a very real concern. On one hand, when Disney movies first hit Singaporean shores, we were spoilt for choice between our existing local offerings, and colourful storytelling through Disney’s signature animation style (after acquiring Pixar. Which in itself is evidence of Disney’s rise to market dominance.) On the other hand, as Disney continued to expand its influence, it drove out local producers as more and more people changed their tastes and preferences towards Disney films, leading to fewer and fewer local film productions.

Globalisation has always been touted as a real boon for developing economies and local firms. In theory, increased global flows of labour, capital and knowledge would lead to technological and developmental spillover effects, which are essentially positive externalities from the presence of MNEs on the local economy. However, emerging economies may be too poor to purchase the capital goods, and local firms may not stand to benefit from the trickle-down of technology due to crowding out effects, if MNEs possess comparative advantage over their host-country rivals and drive them out of the market. Disney, with years of film-making experience, and with the acquiring of animation comapny Pixar, had a comparative advantage over up-and-coming local producers, and as expected, dominated the animated-film industry worldwide. In many ways, the rise of MNEs has benefited the consumer – the smaller world we live in gives us access to products from all over the world, and as in the current wave of Globalisation 3.0, foreign individuals and small-and-medium enterprises have the ability to bring us products too. YouTube, for instance, has enabled the rise of the homegrown entertainment producer, not only allowing individuals to be their own bosses, but also allowing them to earn an income from advertising revenue when their videos are broadcasted to viewers worldwide. However, with winners come losers – many industries have become so much more competitive, and as big firms get bigger, smaller firms have no choice but to leave in this twisted, seemingly zero-sum game.

For individuals like you and me, the zero-sum game continues. In economies that have quality legal, governmental and economic institutions, globalisation has certainly brought economic prosperity – careful management of globalisation, in slowly opening up one’s market for imports, and ensuring the fair and equitable distribution of new wealth, allows all to benefit. However, the way globalisation has been managed by international institutions like the IMF or the WTO has taken away much of the developing countries’ sovereignty. In undermining democracy, and the ability for governments to make decisions in key areas that can affect citizen well-being, the benefits of a shrinking world become unevenly distributed to forward political and personal agendas. The rich and powerful have a stake in expanding MNEs and stand to gain the most, getting richer at the expense of the poor in developing countries who do not enjoy the trickle-down benefits of economic growth, or even worse, face greater exploitation by MNEs that force workers to work harder at the same low income. Where a shrinking world has lead to the average Singaporean like me to enjoy a higher standard of living, and greater access to global goods and services (like a holiday to Tokyo), in other parts of the emerging world, MNEs appearing right at the doorstep of rural Bolivia and India have only made the divide between the rich and the poor more apparent, rather than closing it.

It’s a world of laughter
A world of tears
It’s a world of hopes
And a world of fears
There’s so much that we share
That it’s time we’re aware
It’s a small world after all

In the words of Joseph Stiglitz, I find that it is hardly a question of whether globalisation is good or bad: globalisation is a powerful force that has brought enormous benefits to some. By blurring the lines between local and foreign, ‘international’ has become common knowledge nationwide, and we’ve been able to enjoy goods, services and economic prosperity like never before. But this is in Singapore, and even then, globalisation hasn’t been all rosy for our little island nation either – xenophobia has only become more apparent with the threat of overcrowding and the spread of opinions via the internet, so much so to the point where we’ve had to stymie the flow of foreign labour into Singapore. Imagine other economies which are still developing – without proper management and quality institutions, globalisation can and has created social divide and exacerbated income inequality. As we ride the wave of Globalisation 3.0, we must never assume the journey will be as safe and as guided as that in Disneyland’s child-friendly boat rides. We are the arbiters of our own destiny, and as the world keeps shrinking, it’s up to nations, both people and governments, to rise above and expand, else remain trapped and limited by global economic forces.