Saturday, June 22, 2019

Isolationism or Globalization? Anyone Know What the Right Approach Is?

There are arguments to be made for isolationist policies as well as engagement policies. The problem is that over the long run choices create outcomes that don't often have the most value. Isolationism means a country stays out of the policies of other countries while a more engaging strategy seeks to influence the outcome of policies. While politics is one thing the economy is another. Getting connected to other nations leads to growth over a longer period of time.

It isn't wise to isolate for too long because economies become less competitive. Once they lose their market position they may not be able regain it quickly. Isolation limits the influx of new money and ideas.

The best economies put themselves at the center of the information and resource chain. It is where everything else sort of gravitates toward. Resources, ideas, people, money, etc... come to the center of the supply chain. 

With more and more data being collected it is possible to track how resources are moving around the globe. That can tell you a whole lot about where the value in the chain resides. It may be in the extraction of natural resources, conversion to working material, in the development of ideas or the manufacturing of the final product.

They only way the supply chain will gravitate toward certain regions is if the most value is being produced there. The resources are moving because people/nations are profiting at each of the supply chain stops where raw resources are refined into new things.

When all of the elements come together to create the most value through the general of a new product or service is where the high investment possibilities are found. This is even more true if we design and manufacture the highest value and quality products. The greatest value occurs where there is the greatest synergy.

Leading the market means create the most value. Regions that can do that become known for their local abilities. Establishing a product allows the region to capitalize on it. This will not happen unless treaties are made and information and resources flow.

The case against isolation is a strong one. There should be a balance where new resources and ideas flow in while the highest value products flow out. Manufacturing these products in the U.S. helps secure local clusters  maintain their knowledge and abilities here. Thus some isolationist strategies may be helpful in the short run but the long term game goes to the person who can draw resources and sell products while capitalizing on retaining abilities.

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