In a recent book, Richard Baldwin takes us on a fascinating journey to the past, and then provides a peak into the next great transformation. In The Globotics Upheaval, Mr. Baldwin describes a cycle that has played out multiple times throughout human history. The cycle of transformation, upheaval, backlash and resolution (Let’s call it TUBS) was experienced each time the world entered periods of major disruption. Mr. Baldwin introduces the Globotics Transformation as the third great economic transformation to shape our societies over the past three centuries. As he describes, the first was known as the Great Transformation started in the early 1700s, and it switched societies from agriculture to industrial and from rural to urban. The second started in the early 1970s, shifting the focus from industry to services – the Services Transformation. I take a different view of transformation in the context of Tipping Points – but the cycle is the same.
Globalization could be entering its third act. In a book titled The Great Convergence, Author Richard Baldwin describes the three constraints that have limited globalization: the cost of moving goods, the cost of moving ideas, and the cost of moving people. The first two acts of globalization occurred when the cost of moving goods and ideas dropped. While globalization raised the standard of living in several developing economies, the third constraint limited the breadth of impact.
In his closing chapter, Mr. Baldwin explores the possibility of a third act. This act is driven by dramatic advancements in areas that address the third constraint. If the cost of moving people were to drop, developing nations like South America, Africa, and others could be the beneficiaries of this third act. How will the cost of moving people drop? What advancements enable this third act? In his closing chapter, Mr. Baldwin touches on enabling innovations and their fascinating potential. Here is a brief look at these innovations: