The New Rules: Globalization’s Next Wave of Integration

The New Rules: Globalization’s Next Wave of Integration

Thanks to the recent global financial crisis, we've heard much talk about the coming "de-globalization," defined by some as the reversal of the now decades-long push to further integrate trade among national economies by disintegrating production and spreading its means across the planet to the cheapest sources. In the past, all forms of growing supply chain connectivity could be justified on price, buttressed by just-in-time delivery capacity. But the market woes of the last year-and-a-half supposedly threw all that logic into question.

Price risk is one thing, supply risk quite another. Specialization depends on supply: the greater the specialization, the more global firms depend on the reliability of supply. Thus our global economy's growing connectivity and efficiency in production makes us all more dependent on each other, and on the logistical chains that bind us.

The outsourcing of manufacturing over the last three decades has created enormous interdependencies and, as a result, commensurate uncertainties -- which many global corporations now seek to address through strategies of vertical integration. Similarly, we're witnessing a push on the part of emerging economies -- most notably China -- to secure access to key raw materials and energy reserves. Ditto for many vulnerable, but cash-rich states on the question of food supply, what the Economist has dubbed "outsourcing's third wave." Deals no longer seem to suffice: Direct ownership is now desired.

Keep reading for free!

Get instant access to the rest of this article as well as three free articles per month. You'll also receive our free email newsletter to stay up to date on all our coverage:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having your own personal researcher and analyst for news and events around the globe. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of 15,000+ articles
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday
  • Weekly in-depth reports on important issues and countries
  • Daily links to must-read news, analysis, and opinion from top sources around the globe, curated by our keen-eyed team of editors
  • Your choice of weekly region-specific newsletters, delivered to your inbox.
  • Smartphone- and tablet-friendly website.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review