Globalization and Your Career by Eric T-S

Globalization and Your Career by Eric T-S. Pan, California Beta ’84

CONOMIC GLOBALIZATION HAS INCREASED dustrial trends in domestic and international markets in the flow of money, goods, services, people, and terms of hot spots, where regions experience above-aver- jobs across national boundaries. The trend of age economic activity, and soft markets, where supply of globalization is accelerating. Undoubtedly, glo- certain skills or resources exceeds demand. balization requires an environment of geopoliti- ecal stability and a macroeconomic system to enable GLOBALIZATION TRENDS growth. However, the full impact of economic globaliza- Stable macroeconomic and political environments are tion goes beyond national trade surpluses or deficits. Glo- necessary to encourage economic development and balization has had tremendous impact on supply and growth through globalization. Other equally important demand as customers and suppliers can now transact conditions are a country’s industrial focus and infrastruc- with each other from opposite sides of the world. On the ture, prevailing business practices and strategies, sophis- other hand, globalization has also resulted in displace- tication in financial systems, workforce education and ment of jobs and communities and has had significant en- skills, governmental policies, and cultural conditions. vironmental impact. Given this backdrop, this article These factors constitute the whole environment in which aims to: a country’s business enterprises compete and create • Identify key trends of globalization, and socio-economic advancement and prosperity. • Identify how globalization impacts market and Consequently, the advancement of a career opportunities for technical professionals, country’s wealth depends on politi- positively and negatively.

EuEEuropeEuropEurEurou “It is also about “Technical mastering the professionalism principles behind is not just about business strategy, having technical process, and competencies.... people.”

AN INCREASING MARKET FORCE Never before in history has there been such rapid change cal and macroeconomic reforms along in people’s lives. Because of the lowering of trade and in- with microeconomic improvements. vestment barriers and the rise of telecommunication and Consider countries in a two-dimensional field with transportation technologies, companies can set up or one axis representing population density and the other outsource manufacturing, research and development, ser- axis representing gross national income (GNI) per capita, vice delivery, or other business activities practically wher- as illustrated in Exhibit A on page 32. Developed coun- ever the costs and wages are the lowest and capabilities tries are at the highest income per capita bracket, and and resources are aligned with business strategy. underdeveloped countries are at the lowest income per The waves of globalization fueled by continually more capita bracket, with developing countries in the middle. sophisticated and efficient means of communication, fi- The block areas in the diagram approximate the actual nance, trade, and transportation have brought the world distribution of countries with respect to wealth and popu- closer together. Correspondingly, globalization has re-land- lation. Although not shown in the diagram, there are dis- scaped the supply and demand of products and services in parities with respect to wealth and population density globally competitive markets. Indeed, accompanying new within individual countries as well. global sources of customer demand and product supply are The general trend of globalization suggests that many new competitive threats and choice of resources. products and industries go through a cycle during which The message here is to think about and leverage global- developed countries (i.e., high income, mass consumption) ization. Technical professionals should keep abreast of in- are initially exporters, then lose their export markets,

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BENTSP05_p31_FeatGlobal 31 3/9/05, 10:57 AM and finally become importers of the product. ECONOMIC IMPACTS ON PROFESSIONALS Several prevailing rules about the directions of gaining What are the impacts of globalization to technical profes- global advantage are summarized below. sionals? As discussed, globalization is creating unprec- • Companies should develop networks of intellectual edented uncertainties in the outlook for any career amidst properties, capital, people, and market insights across increasing corporate access to a global labor market and regions for business agility and efficiency. the commoditization of intellectual property. The knowl- • Companies should gain control of foreign distribution edge-based global economy puts pressure on businesses to channels to access foreign customers directly. pay for knowledge wherever it is available. Farming out • Firms in developed and developing countries gain ad- R&D, licensing technology, transferring knowledge, and vantage by selling unique products and services to acquiring product lines are common strategies for many less-developed economies and less-populous regions. businesses that can no longer depend on their own re- • Firms in underdeveloped and developing countries sources to stay competitive. For example, businesses in gain advantage by: many developed countries, including the U.S., are shipping – Selling products to developed economies produced skilled jobs to less developed countries to reduce costs in a with low-cost labor or low-cost natural resources, trend known as off-shoring. The dichotomy between pro- low pricing, or market niche products; business and pro-labor government economic policies has a patchwork effect on the quality of jobs in specific industries. Technical professionals with once- valuable knowledge and experience are left with limited choices. $100K Furthermore, other financial factors have affected the technology business U pan DEVELOPOPED environment and, by extension, the ca- CanadaCaan Finland COUNTRRIES reers of technical professionals. The 10K orea Asia-Pacific monetary crisis in the mid- 1990s, caused by irregularities in finan- DEVELOPPING cial practices, led to many bankruptcies R COUNTRRIES and withdrawals of foreign investment. 1K The burst of two technology bubbles —

[per capita (US$)] [per capita telecommunication and Internet dot- a UNDER-R DEVELOPPED coms — in the late 1990s, because of COUNTRNTRIES irreconcilable costs versus returns, dis- GROSS NATIONAL INCOME NATIONAL GROSS $100 sipated tremendous amounts of wealth. 0.001 0.010 0.100 1.000 10.000 The corporate accounting and corporate governance scandals of the early 2000s POPULATION DENSITY [per sq. km.] have also adversely affected investor

represents a country Data source: UNICEF 2002 confidence. These trends demonstrate how com- Exhibit A: Wealth distribution versus population density for different countries. plex and unforgiving the business environment can be. People might argue that the competitive – Improving operational efficiency and effectiveness knowledge economy and globalization provide the base for and widening capabilities in other activities, such lasting economic value to consumers and raise the living as marketing, logistics, and service; standards in developing countries. They may also argue – Leveraging regional infrastructure (including that monetary crises, technology bubbles, and corporate neighboring countries) and resources to develop scandals are only temporary and the economy will recover geographic value chains and specialization; and from these valleys to reach new, higher peaks. Perhaps, – Building unique brand identities. but the fact remains that the aforementioned trends and • Firms competing within developed countries gain ad- events do create sudden imbalances between human capi- vantage by: tal supply and demand, function by function, industry by – Selling through enhanced product differentiation, industry, and region by region. refined segmentation, distinctive branding, effi cient knowledge management, or extended distri- PROFESSIONALS MUST BUILD BUSINESS ACUMEN bution channels; and The commoditization of knowledge, the lure of lower labor – Investing to build true innovation capacity and up- costs elsewhere, and the miscalculations of the technology grade the knowledge and skills of the workforce. bubbles are real threats to technical professionals and the labor force in general. In addition, the life cycle for techni- Another key trend as a result of globalization is the cal skills is getting shorter and shorter; any specialization supply and demand of the global workforce. The highly in technical knowledge will not last a career span. In times computerized modern technical industry is a good ex- of bankruptcy, downsizing, mergers, outsourcing, and off- ample of the various outcomes of globalization, shown in shoring, businesses frequently offer outplacement assis- Exhibit B from the different perspectives of business, tance, but rarely career re-training. Where is career economists, and professionals. security to be found?

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BENTSP05_p32_FeatGlobal 32 3/9/05, 11:11 AM velopment. An improved understanding of business prac- Globalization Trends tices and management decisions will yield more career choices and options to enhance your livelihood. Yes, pro- BUSINESS PERSPECTIVE fessional isolation can be a consequence of corporate cul- ture, interdisciplinary communications may not be the Shrinking profit margin ▼ best, investment can be a gamble, knowledge can become Need to reduce labor costs obsolete, employees can be replaced, businesses can be ▼ folded, and intellectual property can be duplicated. But Outsourcing the purpose here is not to instill fear. It is to encourage ▼ acquisition of new knowledge and understanding of busi- Leveraged workforce of global regions where workforce ness principles to expand your career prospects. Techni- is qualified and available, wages and costs are low, and market conditions are favorable cal professionalism is not just about having technical ▼ competencies, but also about mastering the principles be- Improved business competitiveness hind business strategy, process, and people. ▼ Participation in emerging markets like China, India, and CONCLUSION Latin America ▼ The acceleration of globalization has produced unprec- Opening of global offices, multinational status edented opportunities, threats, and uncertainties for technical professionals and for business in general. The effect of globalization certainly feels like the ground is ECONOMIC PERSPECTIVE shaking as the traditional strengths of many businesses and careers are moving out of place. It can be very dis- Leveraged global workforce ▼ concerting when knowledge, productivity, and money are Lower product costs no longer sure competitive advantages. Don’t be discour- ▼ aged. For technical professionals to become effective in Increased product demand their contributions to and participation in business, con- ▼ stant self-development, interdisciplinary knowledge, and Increased product supply ▼ cross-functional and intercultural teamwork are the es- sential qualifiers. It just takes a while to find value first Increased labor demand ▼ and realign oneself and/or one’s business into a new value Increased labor supply profit chain! Ultimately, national prosperity will be deter- ▼ mined by a country’s business enterprises, its citizens (in- Higher incomes cluding its workforce), and the governmental policies and ▼ institutions that organize and manage the economy. Improved regional economy Excerpted with permission of the publisher, Meridian Deployment Corp., from Perpetual Business Machines: Principles of Success for Technical Pro- PROFESSIONAL PERSPECTIVE fessionals. Copyright ©2005 by Eric T-S. Pan. This book is available online at www.mdc-learning.com. Leveraged global workforce ▼ Displaced home workforce Eric T-S. Pan, California Beta ▼ ’84, is the president and Lost jobs founder of Meridian Deploy- ▼ ment Corporation—a con- 1) Migration to emerging markets sulting, publishing, and training 2) Need for new career or venture firm in the Silicon Valley for 3) Competition in shrinking job market technical professionals that also provides technical management services to early Exhibit B: Different outcomes of globalization. growth technology companies and international indus- Businesses have also become far too complex for uni- trial manufacturers. dimensional information analysis, resource allocation, and Mr. Pan received a bachelor’s degree in applied phys- management decisions. To compete, businesses need to ics from the California Institute of Technology and a facilitate multiple interactions among functions, profes- master’s degree in electrical engineering and computer sional disciplines, customers, and suppliers. Such an envi- science from the Massachusetts Institute of Technology. ronment requires not just inter-organizational leadership He began his career in research and development at and teamwork, but cross-functional, intercultural, multi- IBM, Caltech, and Hughes Electronics. He held senior site, multi-level, and multi-disciplinary leadership and operations and product management positions at Net- teamwork. However, many technical professionals are ill- work Device, Inc., Spectrian Corporation, and Samsung equipped for playing key business roles. Semiconductor, Inc., and was a director of operations at Skyworks Solutions, Inc. He has authored 20 technical The fact of life is that it is up to individuals to cross- papers and holds several U.S. patents. breed themselves through education and professional de-

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