We are increasingly witnessing the pendulum swinging away from globalization. The narrative of Francis Fukuyama’s “end of history,” which saw a linear, unidirectional evolution, is giving way to a more complex understanding of the forces at work and that economic modernization does not trump everything else.

There was an expectation that, as a result of economic progress and globalization, cultures would converge and the nation-state would matter less as it is superseded by global agendas. But, in fact, what we’ve seen in the last few years has been the rise of identity and culture politics and a new form of nationalism. Increasingly, there’s a recognition that the new divide is no longer that of left and right but rather those who favor an open system versus those who favor a closed one. There are those who see globalization not only as an economic imperative but as an important social construct toward global citizenry and a new set of institutions focused on issues of global importance—be it climate change, global security, health epidemics, or the mass migration and displacement of people. The other understanding is that globalization threatens traditional ways of life and that global institutions undermine local processes of democracy, and that its services the elite at the expense of hard-working blue-collar workers. The latter results in a renewed nationalism that focuses on the domestic and that desires the construction of walls, both physical and metaphorical, to protect the local from the other.

These are perilous times, because the outcome of this nationalism and protectionism would be a fall in international trade and capital flows, and would lead to an economic slowdown internationally and to zero-sum economic relations.

Both sides are partly at fault, and neither narrative is correct. Globalists have underestimated the importance of national identity and often belittled it, and have not paid sufficient attention to those who lost through globalization. While at a macro level, international trade may result in win-win scenarios, that is not true at a micro level, and we have ignored the plight of vast numbers of people. We need to increasingly recognize that globalization resulted in an insider-outsider phenomenon, both intra-regionally and inter-regionally. Within countries, it was very often the blue-collar workers in industrialized countries who saw jobs move to lower-cost destinations and saw real wages stagnate at the bottom, while the economy at the top prospered. Internationally, likewise, there was a process of insiders and outsiders of those who took advantage of globalization and those who became victims of it. Governments paid too little attention to putting policies and programs in place to create more inclusion and to provide workers with the skills required to operate in these new economies.

Smaller economies stand to be the biggest losers

These shifts towards a closed system will affect the smaller, less developed countries, such as those in Sub-Saharan Africa, disproportionately because they are more reliant on international trade and capital flows. Large economies will be better positioned to handle protectionism because of their large domestic markets. African countries have often been at the receiving end of the nasty consequences of globalization, but at the same time, it is the opportunities within the global economy that will provide them with the ability to grow into middle- and high-income status. Without access to international trade and capital, these countries are going to be the major losers in this process. In the high-stakes game of protectionism, it is the big players that are going to be at the table and drawing up the rules of the game, while the less developed are going to experience the consequences. Furthermore, many of the global problems that require international responses, such as climate change, will affect developing countries disproportionately. Scientists are in agreement that African countries are going to be disproportionately negatively affected by global warming. Many African countries in recent years have experienced positive growth through trade because of trade agreements with the European Union or with United States, and a rise in protectionism threatens this and closes one avenue to prosperity.

Emerging market thinking for the world: the ability to operate effectively in times of uncertainty, complexity, and inequality

We are increasingly moving into a world where volatility, uncertainty, complexity, and ambiguity are part and parcel of the new dispensation. The Graduate School of Business at the University of Cape Town is striving to pioneer a new model of business school based on the paradigm of the emerging economy. The GSB defines “emerging” as regions or economies that experience high uncertainty, high complexity, and often excessive inequality. As much as this is true for what classically are called the emerging economies (such as Brazil, India, Turkey, Indonesia, and Vietnam), uncertainty, complexity, and inequality are equally issues for companies in turbulent economic times. Emerging market thinking is therefore not solely a geographical construct. The whole world is operating in times of great uncertainty and complexity, and all business leaders and managers need to be able to adapt and learn to operate successfully in such challenging times and volatile environments. We want to train leaders who are equipped to operate in emerging markets as well as evoke their social conscience so that they can contribute to finding solutions to societal challenges.