On reflection, the theme of the event “The Cultural Dynamics of 'Globalizations' among the Asian Nations”
seems ever more timely for exploring how the many changes sweeping our world affect us as multinational
companies and as global players, but also as individuals, and as members of our own societies and cultures.
For Mars, it is especially important to think about how we can make a difference in engaging emerging
markets by deploying our unique way of doing business and our values in geographies that are likely to
follow specific modernisation paths -- or, more simply put, different ways of being modern.
In this document, we wish to share with you what we believe are the most valuable & salient insights from
the meeting and our discussion.
As agreed during the meeting, a small delegation, including Catalyst, Kash Rangan and Fabien Simon (S&F
Staff Officer) – will go to meet with Paul Michaels on May 13th for a couple of hours to discuss the output
of our discussions and the potential implications for Mars.
The current form of Globalization is ... truly global in its structure
“Every society is going to be more connected to globalization more than ever,” said Parag in his introductory
speech
The current Globalization that we are experiencing is not the first one (there have been many globalizations
in the past), but this one ...
 is truly global, impacting for the first time in history all parts of the world, even the most distant ones).
It is leading to the eventual opening-up of isolationist regimes – like what is taking place in today's
Burma, and what is likely soon to be seen with Cuba and North Korea.
 occurs in a generation that is going through a demographic explosion: the world population has
doubled over the last 4 decades.
 is happening at an unprecendeted speed, facilitated by Infomration Technology and ease of travel, and
is thus affecting an unprecedented number of people, across large geographies, at the same time.
As such, it is an unprecedented phenonmena that will have unprecendetd consequences on how people
and business will live and shape the modern world.
The current form of Globalization is ... irreversible
The foundations of this ultimate form of modernization make it a unique and irreversible phenomenon
(unlike the globalizations of the past, which were limited in scope and declined over time) and will further
enhance individualization (i.e. independence of the individual over & against traditions & collectively)
The fundamental reason why this ultimate form of globalization will most likely not revert lies in the
irreversible nature and the strength of its two fundamental drivers — communications technology and
urbanization.
Communications Technology
IT revolution has reduced the geographical constraints to communication and, as a result, speeded up the
pace of the global economy -- making large parts of the economy truly inter-dependent across national
borders & economic sectors.
More interestingly perhaps is that, while the rapid evolution of communications technologies and social
media has enabled many individuals to have their own media “platform,” one of the key insights and
advancements stemming from this area will emerge from group dynamics, as opposed to individual content
contributions.
In that context, the social media world itself leads to new behaviors that are changing how individuals make
decisions. "There has been a tectonic shift of trust", said Maria Ressa one of the MDRU speaker, "where the
age of authenticity” has eclipsed the age of authority.”
In parallel, social media tends to act as a new “opiate of the masses,” acting like a "narcotic," tapping deep
human emotional levers and triggering the release of dopamine. Social Media consumption will therefore
continue to grow in importance, use and scope.
The importance and broad appeal, meanwhile, of any individual content carried within social media or
other information technology will decline. The trend here is “more and more about less and less.” As the
importance of individual content declines, the significance of the communications medium itself is rising; it
is changing and evolving human behaviour.
Urbanization
Urbanization is not a new phenomenon, but the breadth of its current footprint and its sheer scale today
are. Historically, urbanization has changed people’s life style, family structures (smaller family size),
consumption habits (more CPG / Industrial products) etc.
By way of illustration, China recently crossed a critical point in the urbanization stakes, and now more than
half of the country's 1.3 billion people live in cities. Putting it into perspective, that figure represents more
than the combined populations of the United States, the United Kingdom, Italy and France.
Within the larger trend, we find more happening under the surface.
During the MDRU we discussed the emergence of ‘diplomacity,’ or how the economic, political and
demographic role of megacities will continue to increase.
We also focused on a pair of related trends—ones that, combined, contain the ingredients for widespread
potential instability—concerning inequality. On the one hand, as a result of the globalisation trend the
inequality across countries worldwide is decreasing; however, within each of these countries we also see
inequality among the inhabitants on the rise.
This dynamics is also starting to impact big cities, and, as expected, we observe that within these new and
growing cities, people are creating new structures to replace the waning, traditional family structure.
The current form of Globalization is not entirely global ... yet
"Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."
Churchill, 1942
While the barriers to globalization are undergoing a final and irreversible reduction, the process is still in the
early stages. This is not the beginning of the end, or even the end of the beginning. We are witnessing the
“beginning of the beginning.” It is likely that Globalization is at a tipping point. With the underpinning
structure of globalization solidly established -- driven by IT & Urbanization trend --this phenomenon can
now grow in depth.
What makes us say that?
Some key points: Only approximately 250 million people live outside their home countries, or 3.5% of the
global population. Only 2% of all phone calls are international. Even online, only 18% (less than one-fifth)
of messages are sent across national borders.
However, we believe the process will continue to grow, gain momentum, and shape the sociology of the
emerging ruling class. At the moment, this phenomenon is indeed marginal to some extent and it is
impacting a marginal proportion of the population -- that James Hunter calls "parochial cosmopolitans" (i.e.
people who move with the greatest of ease from country to country while remaining in a protective
"bubble" that shields them from any serious contact with the indigenous cultures on which they impinge).
But it is indeniable that we observe the emergence of a new 'ruling class' culture, trained for and exposed to
dealing with global issues, that will grow in importance and in number in the years to come. And that means
the changes we have witnessed to date—as significant as they may be –are likely to be small relative to
those that are yet to come.
The role of multinational companies
Concurrent with increasing globalization is the declining authority of national governments and even the
functions of nations themselves. Multinationals, large NGOs, and to a lesser extent the international
institutions that emerged out of Bretton Woods are assuming more responsibilities that once were the
domain of governments.
This is evident in the emergence of the "corporate diplomacy,” e.g., the emerging concept of the
“independent republic of supply chain,” and it has significant implications for how companies operate, and
how they are judged (e.g. people judge more & more on MNC's products and they treat their people, not
only their employees but also the people who work in their eco-system)
Beyond the realm of corporate social responsibility, we also see an interesting trend in personal identity—
people are starting to see themselves as belonging to their company first, country second (e.g. people refer
to being part of McKinsey or Goldman Sachs first, before referring to their national identity).
Globalization is not uniform. Globalization does not equal Americanisation nor Westernization.
Globalization is not a single or harmonious process—there are multiple globalizations.
This has significant implications for multinationals, particularly as they seek to expand further into emerging
markets.
The first is that MNCs cannot only trust “generic” data for emerging markets—instead they need cultural
intelligence, or an understanding of local cultures and how the globalization processes are unfolding within
those cultures and economies 'don't trust the data collected outside ; look at people,' noted delegate Gary
Knight.
In a similar vein, global corporations will need to re-consider their governance structures, taking steps to
move away from a centralized HQ model to, for instance, a network of regional ones.
So too a “one size fits all” business model approach to new global markets will not work.
For evidence of this, we can look at urbanization rates: China (an exception in Southeast Asia, albeit a big
one) will reach 70% shortly, while India is not expected to hit 30% for another 20 years.
This idea also applies to the economic status of consumers. It’s easy to target the “top of the pyramid,” but
it’s more difficult and complex to navigate to the “middle of the diamond.” The needs of the middle are not
the same and their values are often different. The concept by which poor people need a smaller & cheaper
version of the products & services consumed by the rich is fundamentally flawed (e.g. rich people need big
bank, poor people do not need small banks, they do not need any bank at all actually, they just need
secured forms of payment). “Let's not assume that everyone along the pyramid need the same product, but
understand the needs of the people,” said Kash Rangan, indicating the importance of understanding the
ecology of each market segment. He put the spotlight on the informal economy as a business opportunity.
Finally, we were reminded that poverty does not equal misery—a valuable insight in managing our
assumptions within these emerging nations. The vivid illustration of this truth is that big business can be
built in medium size and poor countries (e.g. M-Pesa in Kenya) although, as one delegate reminded us, the
growth expectations from many MNCs may exceed local countries’ potential.