Going International? Not So Fast

Introduction

It’s one of the most iconic scenes in the history of movies. In the 1967 movie, “The Graduate,” a very young Dustin Hoffman is taken aside at a cocktail party by a middle-aged, successful looking businessman. The elderly gentleman takes it upon himself to give the very young central character career advice. The tip for the young graduate to lead to a successful career, riches, and yes, a good life is simple: “one word...plastics.”

We are a society that loves buzzwords, and certainly, “plastics” had its heyday. Now that prescription for career success from almost a half-century ago certainly seems dated, but the simplicity and succinctness of it made it one of the more memorable scenes from that classic film. We can debate what today’s equivalent “can’t miss” career buzzword might be - from longer-standing tech trends like artificial intelligence, robotics, and nanotechnology to more trendy, coronavirus’-inspired concepts such as epidemiology, telehealth, and yes, plexiglass and that old-standby, toilet paper! However, one thing is for certain, everyone in charge of anything - even administrators in the officially not-for-profit world of colleges and universities - want to know what the “next big thing” will be so as to be able to capitalize on it.

Globalization and U

If there is one word that has characterized much of not just business higher education over the past few decades - and indeed much of higher ed in general - that word would certainly be “globalization.” All one has to do is peruse the website of your son or daughter’s prospective college, your alma mater, your local university...or basically any college in the United States, and you will quickly and quite obviously see just how invested those institutions are in the prospect of globalization - and the idea that it will pay huge dividends both for the school and for their students. I can guarantee you that if you look at almost any four-year university’s website - even two-year schools - you will find “Exhibit A” (and likely even exhibits b, c d…) of this trend. Simply take one selection from words like “international,” “global,” “world,” and then pair it with academic words that translate to “money,” like “center,” “initiative,” “institute,” “outreach,” etc. and it is more than likely that your favorite university has 1, 2...7 of these “things” - staffed with professors, researchers, and of course, lots of administrators.

And no, higher education institutions don’t establish - and fund - these entities out of the desire for just greater world peace and understanding and more opportunity for all. They do it for one reason: Globalization - and the belief that international trade is a hallmark of the 21st century economy - is a “winner” in terms of attracting students, faculty, media attention, prestige, and of course, more money - through donations, sponsorships, partnerships, endowments, etc. Evidence of such is that no such center or institute for world trade. global business or international affairs would be complete without that third element - the name of the donor who paid enough to get that entity - and if really enough, the building it is housed within - named after him, her, his family, her father, or the company they founded or acquired in a buyout.

But what if globalization has peaked? What does this mean for higher education and for its consumers - i.e. the students. A recent report from no less an authority than the World Trade Organization revealed the fact that international trade - and all the opportunities for companies and for yes, American jobs - may have reached its peak over a decade ago at the time of the global financial crisis in 2008! And now, with new “ill winds” - from the COVID-19 pandemic to rising nationalism to trade wars - posing significant - and likely lasting - new threats to global trade, business, travel, tourism and more, one must ask a fundamental question: Is it time to stop selling the “myth of globalization” to students across America’s colleges and universities.

The Numbers on Globalization: It's Not Just the Pandemic

I must admit that even as a professor of management and active consultant - one who teaches students and advises companies on international business matters, when I first saw this chart I was like, really? However, this chart and the numbers behind it are very, very real - not #fakenews! It came in one of the way too many daily email alerts that I, like you, have subscribed to over time, but one of the few that I actually open every day. Statista, a data analytics firm, created the chart that you see below. It tracks the percentage of overall global gross domestic product (GDP) attributable to international trade from 1970 (when the World Trade Organization began tracking this measure, the source of the data for this chart) to the present day.

Now for those of you needing a refresher from that macroeconomics course you took back in the day to realize exactly what we are looking at, a country's GDP is defined as:

“Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of a given country’s economic health.”

So then global GDP is the cumulative measure of - yeah, you got it - the gross domestic products of all countries around the world.

And right now, absolutely no one would be surprised that the share of global GDP that comes from the movement of goods and people and the provision of services and expertise would be suffering a sudden and severe decline in the wake of the current pandemic. As Roberto Azevêdo, the Director-General of the WTO analogized with the release of his organization’s global trade outlook for the year, the coronavirus outbreak effectively “cut the fuel line” to the global economic engine.

The impact of the pandemic was indeed sharp and severe, as global trade, travel, and shipping were effectively shut down in an instant, with the WTO itself projecting a decline of somewhere between 13 and 32% on a worldwide basis. And since there’s really no precedent for the modern, global economic engine to have been stopped, it is really anybody’s guess as to how severe the downturn may be globally, let alone on a country-specific basis, the same can be said as to the projections as to how quickly and how robustly the drivers of the global economy can be restarted and thus, the shape that the recovery will take. Of course, this has not stopped experts from making their projections on the impact of the coronavirus on global trade, on the supply chain, and on global travel. However, at this point, it is fair to say that the shape and speed of the economic recovery is basically anyone’s guess - no matter their title or their credentials - with the wild card in the mix being the much talked about, and yes sadly, almost certain, second wave of the pandemic to come later this year.

So yes, we are dealing with an immediate, profound economic, social and yes, political crisis involving all of the roughly 7.5 billion people who call the earth home. As Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) was recently quoted in Forbes as stating: “This is a crisis like no other. Never in history...have we witnessed the world economy coming to a standstill.” How - and how well - each country’s government deals with both the immediate public health, economic, and yes, social and political crises that are occurring simultaneously will have profound and lasting impacts on all of our well-beings. And in the United States unfortunately right now, we know all too well how these converging crises are impacting not just the macroeconomy, but indeed each and every one of our own “personal economies.”

Analysis

To me as a business academician, this is a moment in time to not just deal with the immediate crisis as it affects higher education, but how the stalling - and yes, the almost certain decline in the importance of international trade in not just the global economy, but in the U.S. economy specifically, will impact all the emphasis that we in the “college business” have been putting on globalization and internationalization. And so it is time to ask, is it time to stop selling the buzzword of globalization to our constituencies - and most importantly, the students who are our “customers?”

From my perspective, I certainly believe that the day has come to reexamine the priority that all of us in the higher education industry have placed on globalization and internationalization. This is not to say that studying and teaching in areas like international business, global affairs, and ancillary fields is in any way bad. To the contrary, we need such research and knowledge more than ever before, especially in the wake of the sudden realization of just how fragile the global economy really is in the wake of the pandemic. However, what I would like to see is a serious look at just what it means to be offering - and yes, “strongly encouraging” vast numbers of students to be majoring in fields like international management, international marketing, international finance, international accounting, international economics, etc.

Yes, there will always be the need for business education and research in these areas and there will also be students who will be attracted to major in these fields. But, is it time to stop selling the myth of growing globalization - and the attendant lack of growth in jobs and opportunities in international trade - and instead deal with a more domestic, even localized future - one that more matches the real economy and the real prospects for our students today and in the future.

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David C. Wyld ([email protected]) is a Professor of Management at Southeastern Louisiana University outside New Orleans. He is a noted business consultant and speaker/writer on contemporary management issues.