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  • Writer's pictureBartley Joseph

SHIFT IN GLOBALISATION: A HUGE THREAT TO SOUTH AFRICA?

McKinsey's provides a fascinating discussion on the future of globalisation. The gist is that companies focus on speed to market; to achieve this, they need tight control of supply chains and partner relationships.

The shift to regionalism started with the 2008 meltdown in global financial markets and is intensifying. By way of example, China now produces and sells more of its products and services within its region than abroad. The US is on the same path.

Countries that want to stay in action and have a piece of the pie must demonstrate access to excellent and reliable infrastructure and highly skilled engineers, legal, and sales personnel. Trade in low-knowledge activities such as offshore call centers and data processing work will be performed by technology, seeing a rapid decline in offshoring to countries that offer low-cost labour intensive solutions.

South Africa will need to get its act together fast: Rapidly deteriorating infrastructure, a shortage of engineers and the like, and an over-dependence on broking labour-intensive call centers do not bode well for its future.


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