It was now over ten years ago when the cargo ships stopped moving. The Global Financial Crisis reached Asia causing the Singapore Strait, one of the biggest arteries of global trade, to come to a standstill. In fact, Singapore was the first Southeast Asian country to fall into a recession as a result of the calamity. At the time, it seemed the only businesses doing well were the bars and restaurants filled with brokers and traders who had nothing to sell.
In January of 2009, Singapore acted fast and launched a $20.5b “Resiliency Package” that effectively stimulated domestic growth.
The ships started moving soon enough, but global trade, at least what everyone was used to, never fully recovered. From 2007 to 2017, world-wide exports declined from 28% to 23% of global gross output. In other words, the world is shipping fewer products such as computers, electronics, vehicles, and chemicals.
Which means the globalisation party has ended. Or has it?
Whilst headlines focus on trade wars, protectionism and the overall decline of globalisation, something else is going on. Over the same period starting with 2007, global trade in services has grown more than 60% faster than global trade in products. Service sectors include telecommunications, software and cloud solutions, business services, and intellectual property.
People might be shipping fewer items globally, but they are shipping more data and ideas than ever before. Trade, in other words, has gone digital and this is something that is harder to measure than how many containers pass through a port. Globalisation is not dying, it is shifting from products to services.
Singapore’s strategy to grow its services sector and not rely solely on its geographic endowments has been smart. This diversification will continue to help the city-state to grow within this shifting global economy. Will fibre optic cables replace Singapore’s shipping lanes? Not entirely, but digitally savvy cities will fare better than those who continue to focus on traditional global supply chains.
This will not be an easy shift. The globalisation of services faces one massive challenge. People. It turns out, human beings are complex, opinionated and approach work in very different ways. So, whilst the future of globalisation will no doubt be digital, the secret sauce behind its success and failure will be based on how well organisations upgrade the people behind the data.
For example, virtual teams are growing in popularity, but how well do these teams work together remotely? How do they overcome cultural working style differences? How do employees stay engaged? Companies have been rushing into ‘digital transformation’ strategies, but often ignore the changes required from the people who are expected to perform within this new services-based environment. In this fast-growing digital landscape, what is being done to upgrade the human software?
LinkedIn recently published findings on the top soft-skills organisations are looking for in 2019 and beyond. The top four were creativity, persuasion, collaboration and adaptability. These are the kinds of skills that will keep the new fiber optic trade lanes flowing. And whilst companies believe these skills are in short supply, the good news is they can be learned. Singapore continues to encourage organisations to invest in leadership development to make sure the country is future-ready, but more is needed. For Singapore, it may be time to launch a new “Resiliency Package” this time focused on the under-appreciated soft-skills organisations of all sizes need.
A services-driven global economy will require enhanced international communication skills. From crafting and delivering a localisation strategy to managing remote teams across disparate cultures and time zones. Just because telecommunications technology has improved does not mean actual communication has become any better.
Hopefully, the cargo ships won’t stop again but as the global economy continues to go digital, it is important for Singapore to invest time and energy on the human skill sets that will likely define wherever globalisation takes us next.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.
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Kyle Hegarty is the Managing Director for TSL Marketing Singapore. A seasoned sales, leadership and communications trainer and coach, Kyle focuses on building sales pipelines for his clients and working with executive teams to develop localized leadership strategies across APAC and the globe. He researches and writes about the realities of business globalization in a post-globalization world.
A frequent speaker at worldwide business and management conferences, Kyle's work has been covered in The Straits Times, MSNBC, CNN, Dispatches Europe and Fortune.
Kyle is currently using his communications skills to persuade his family to allow him to train for his 5th IronMan distance triathlon. He graduated Magna Cum Laude from Bowdoin College where he majored in International Relations and Economics.