In BriefRoberto Azevêdo, Director General of the World Trade Organization, speaks about the future of small businesses in the era of globalization and the internet. The portrait he paints doesn't leave room for much hope.
A Rose by Any Other Name
Small businesses, we are told, are the lifeblood of America. In reality, they are far more than that. They are vital to the economic survival of billions worldwide. In a recent interview with Futurism at the World Government Summit in Dubai, Roberto Azevêdo, Director General of the World Trade Organization, emphatically outlined the significance of local entrepreneurs. “In the world, around sixty to ninety percent of the workforce is employed by small and medium enterprises,” Azevêdo said, “so we have to help them.”
And they do need our help because they are dying.
Foreign corporations that are not held to America’s environmental protection, worker rights, or intellectual property laws have caused the cost of goods to plummet. Wages and profits in the U.S. plunged in near parallel.
“In the world, around sixty to ninety percent of the workforce is employed by small and medium enterprises, so we have to help them.”
When asked what he would say to small business owners about globalization and the future (the untimely death?) of their business, Azevêdo said that (somehow, inexplicably) these developments are actually a good thing for the little guy. “Globalization is the future of small and medium enterprises. They are the ones who stand to gain the most.”
This is a little hard to believe. Giants like Walmart, Amazon, and Alibaba are such massive powerhouses they threaten to drive all competitors, no matter how big or small, into early graves. Let’s take a look at just one. Amazon isn’t just selling products for your home. They sell clothes. They sell books. They stream movies and television shows. And now, they sell your food both locally and online (Amazon recently bought Whole Foods for $13.7 billion). It’s not too hard to imagine a world in which, in the very near future, Amazon is virtually the only one who sells anything.
For decades now, small businesses have been shut down by competitors both foreign and abroad. Of course, some small businesses have thrived, but these are generally not the small mom-and-pop shops that once dotted the landscape of the United States. They are the startup apps made by your college roommate — not exactly the “economic lifeblood” that one thinks of when they think “small businesses.”
Still, it does little good to debate the benefits or shortcomings of globalization because it is already here, and we can’t stop it. “You know, Amazon and other competitors will always be there. The big guys will always be there. The small and medium enterprises, they want to grow and become Amazon. What’s important is that they are ready to compete. We have to make sure they are in a position to compete,” Azevêdo said. And he is right. The question, then, is how to help them.
A Lending Hand
Alright then, globalization it is. How do we ensure that we all make it in the future? Azevêdo doesn’t have the answers, “It is tough. It is difficult to be ready because the world is changing in so many unpredictable ways,” he said, “so you have to be in a constant examination of your own practices, of your institutions, of your infrastructure.” That seems obvious and sensible, but what does it mean, practically speaking?
“It is tough. It is difficult to be ready because the world is changing in so many unpredictable ways, so you have to be in a constant examination of your own practices, of your institutions, of your infrastructure.”
If the world truly is changing as fast as Azevêdo say it is, what hope do we have even if we are at our most vigilant? It takes months, if not years, of deliberations to get legislation passed. By then, it will be too late for many industries and for the many people whose livelihoods depend on them.
“It’s okay. There is room for everyone,” Azevêdo told me. But I am not convinced. Our policies need to be able to evolve alongside technological developments, but this is simply not how our nations are structured, and it’s not how our legislation bodies operate.
If our policies can’t adapt fast enough to keep up with the changes wrought on society by technological developments and increasing globalization, perhaps we can train our people to adapt. Having a highly skilled and knowledgeable labor force is an alternative option Azevêdo provided. But that doesn’t save small businesses, that just allows displaced workers to find other employment (probably working for Amazon or Walmart).
Of course, the solution likely isn’t trade barriers. Neither is it isolationism. But are we really supposed to believe that, when faced with the questionable ethics and dictator-like dominance of global conglomerate, the solution is simply to educate the populace and “be vigilant” as Azevêdo suggests?
I doubt it, but perhaps there is some other answer. Let’s hope so because international influence is the future. “Globalization is not a choice. Globalization is a reality. It is not going to disappear. It’s like breathing,” Azevêdo proclaimed.
Many, it seems, are doomed to suffocate.