There’s a lot of talk about the downside of global trade agreements, and the globalizing of jobs. But some of globalization’s upsides are striking - and rarely discussed.
for both individuals and small companies, we no longer live in a world of “haves” and “have nots,” but of “haves” and “have mores,” according to , a director at McKinsey & Company and the Vice Chairman of President Obama’s .
His recent book,examines how globalization has given a major boost to people around the world in the past decade.
“One of the impacts of digital technologies is that they’ve actually made it a lot easier for many many more people to innovate and participate in the economy,” he says. “It’s no longer a question of do you have access or do you not… I think from a participation standpoint, the overwhelming effect has been actually to broaden the range of participation.”
Widespread access to the global market by individuals and small companies means per capita GDP is on the rise.
But even Manyika admits that it’s not all sunshine and roses.
“While we may have reduced global disparity… you find that within countries there are actually widening disparities or inequalities.”
The solution may come, in part, from immigration. Immigrants are generally working-age, and pay taxes to support the social safety net of their new country. And Manyika argues that immigrants are desperately needed to address a rapidly aging population in the developed world: in 2050, there will be twice as many people over the age of 65 as there are under 18.
“Think about what that does to the working-age population. We forget that in fact, the economic engine for most countries and productivity relies on having a large group of working-age people participating in the economy.”
Manyika fears that with so many of us nearing retirement, productivity would take a major blow.
“If we flip that to a point where there are more people who are not working, that can be a huge burden for countries, especially at a time when in fact we’re promising more in terms of benefits and social transfers as people live longer and get older,” he adds. “We’re leaving that whole benefit to just the working-age population.”
This makes Manyika cautious about the global economy going forward.
“We’ve relied on these two ‘engines’ to keep economic growth happening for the last 50 years. If you look at the next 50, one of those two engines is about to go out.”