For the better part of two decades now, the globalization of markets has moved steadfastly forward and for the most part, this has been promoted as a benefit to society. And globalization refers to more than just trade, it is about the spread of ideas. In his book Predictably Irrational, author Dan Ariely makes the case that globalization inhibits creativity and ultimately reduces innovation. His idea is that the concept of ‘one large market’ reduces the diversity of ideas and approaches to the problems of today.
To make his point, he uses a passage from The Lost World by Michael Crichton in which the chaos-theory scientist character named Malcolm goes on a pessimistic rant against one of the offshoots of globalization – cyberspace. Malcolm’s point is that in a world where everyone is connected, creativity, innovation and ultimately, evolution will suffer.
The idea that the whole world is wired together is mass death. Every biologist knows that small groups in isolation evolve fastest. You put a thousand birds on a ocean island, and they’ll evolve very fast. You put ten thousand on a big continent, and their evolution slows down. Now, for our own species, evolution occurs mostly through our behavior. We innovate new behavior to adapt. And everyone on earth knows that innovation only occurs in small groups. Put three people on a committee and they may get something done. Ten people, and it gets harder. Thirty people, and nothing happens. Thirty million, it becomes impossible. That’s the effect of mass media–it keeps anything from happening. Mass media swamps diversity. It makes every place the same–Bangkok or Tokyo or London: there’s a McDonald’s on one corner, a Benetton on another, a Gap across the road. Regional differences vanish. All differences vanish. In a mass-media world, there’s less of everything except top ten books, records, movies and ideas. People worry about losing species diversity in the rain forest. But what about intellectual diversity–our most necessary resource? That’s disappearing faster than trees. But we haven’t figured that out, so now we’re planning to put five billion people together in cyberspace. And it’ll freeze the entire species. Everything will stop dead in it’s tracks. Everyone will think the same thing at the same time. Global uniformity…
Here’s the takeaway: Multiple, independent markets are more likely to evolve over time – producing better ideas, more creativity and superior products.
Patrick Lefler is the founder of The Spruance Group – a management consultancy that helps growing companies grow faster. He is a former Marine Corps officer; a graduate of both Annapolis and The Wharton School, and has over twenty years of industry expertise.