BPP Blog

A few years ago Thomas Friedman’s “The World is Flat” took the world by storm: it described the minutiae of globally distributed supply chains; parts of laptops being designed in some countries, shipped to others, assembled elsewhere.   It has become the common sense in political thinking that globalisation is (a) here already, with deep economic integration proven and evident (b) inevitable whether we like it or not, and (c) transformatively a good or a bad thing depending on whether you are pro or anti.

Services too, are becoming globalised, financial services perhaps the most extreme example. Some of you may [have watched / be watching] the [recent / current ] series ‘All watched over by machines of loving grace’ on BBC 2,  which described linked the Asian financial crisis of 1997 with the recent financial crisis in the West, the hollowing out of US manufacturing through the recycling of cheap US money and the supposed abdication of policy making from political to financial elites.

Indeed, in BPP’s sector, education, there is continued evidence to support a globalisation hypothesis. Three million students, a 40% increase since 1999, study outside their home countries. There are global rankings of colleges, or even, as Ben Wildavksy puts it (“The Great Brain Race”) a ‘free trade in minds’ (but try telling that to the UK Boarder Agency!). Companies such as Laureate, Kaplan and Apollo (BPP’s owners) have acquired education assets worldwide. There is a rise in global tests and credentials: the GMAT test, for example, or professional qualification in accounting, often English language based.  BPP supports many of these, through classroom and online courses, as well as learning materials (and so, in my BPP Learning Media role, I sell books in over 150 countries).

It is however refreshing to read people who robustly challenge the conventional wisdom. By some measures, the world economy before-1914 was considerably more integrated than it is now and furthermore, whilst we make the salient point that money flows everywhere,  the flow of people is far more restrictive now than it was 100 years ago.

More recently published  is a comprehensive review of the globalisation hypothesis by Pankaj Ghemawat (World 3.0 Global Prosperity and How to Achieve It). And he offers some stark statistics:

• Students studying overseas account for just 2% of all university students
• …”global exports account for only 20% of the value of world GDP…far below the roughly 90%…if borders and distance did not matter at all”
• On a host of other measures – internet traffic, fixed investment (90% domestic) – the rate of cross boarder traffic is far less than what you would expect
• Quite stunning is a description of trade between USA and Canada, the longest undefended boarder in the world, where trade ought to be five times higher

However, executives at all levels, when surveyed, routinely overestimate the extent to which their countries and industries are globalised.  We live in a semi-globalised world at best, so why the tendency to exaggerate?  There may be an element of wish fulfilment, and significant opportunities tantalisingly available, if investors can be persuaded to cough up. We all love growth.

Ghemawat says that data that paints an integrated picture is hard to get hold of, and it is easy to be mesmerised by the glorious exception. Perhaps psychological factors are at stake: ‘everyone believes very easily what they fear or desire’ (La Fontaine), and, yes, there is something exciting about being the Cassandra on the one hand, or , on the other, strutting the global stage, and getting the experiential kick of pioneering in a strange place. (Even so, you don’t have to read J G Ballard to know that the true cultural signifier of a globalised world is, perhaps, the blandness of the airport lounge.)  Perhaps it is simply a matter of class or taste or intellectual fashion: the professions which are most globalised (academia, perhaps, business) not surprisingly talk most about it. So perhaps, just as the Russian aristocracy before the 1917 revolution who spoke French at home, we live in a  bubble that distorts the real picture and blow out of all proportion what is a minority interest.

Well, I sell learning materials in over 150 countries, in large quantities (at low prices!), and I have a map of the world on my office wall. Colleges want to work with us. Professional bodies want to work with us I know that thousands of students travel to the UK to study, and thousands more value a UK degree, if they can afford it.  I read consultants’ and government reports on the demand for UK educational services globally. I

Once in the bubble, escape is difficult.   Food for thought, anyway.