This mantra has been a steady refrain from multinational companies for about a decade. Is it still relevant?
Thinking just about Europe for a start, I think the concept has run its course. I recall international market research studies of 20 and 25 years ago when the national market characteristics were brought out regularly, with slight shading for the different industrial sectors.
In IT, the Scandinavians were always the early adopters, the willing buyers of advanced technology. The Germans were committed to technology but expected a high level of performance. The Italians only bought from Olivetti or IBM. The French wanted regional suppliers. The British bought from anyone as long as it was cheap. Eastern Europe, of course, was primitive and two generations behind the West.
The motor industry in Scandinavia was less interested in style than in ruggedness. The Germans expected high quality. The Italians only bought from Fiat – unless they were wealthy when they bought Ferraris. The French preferred practical cars. The British were petrol heads and paid more for their cars and the bits that went on them than anyone else in Europe. Eastern Europe went by tram or trolleybus.
In consumer electronics and office equipment, there was a similar pattern of customers in northern Europe seeking better quality with advanced features and prepared to pay higher prices. Further south there tended to be a preference for local suppliers. Customers in the UK bought on price while the opportunities in Eastern Europe were limited by political considerations.
Even services saw different approaches. Germans expected the original suppliers to maintain and support products. Because of uncertainty due to industrial unrest and limitations of infrastructure, Italians wanted pragmatic arrangements through small, local providers. In France there was a contrary desire for corporate delivery of service. In Britain, the search for lowest cost, saw the development of leasing and third party maintenance – later to spread across the continent.
Today, these individual national differences – except at market edges - have all but disappeared. Despite the undoubted cultural differences, the same products that sell in Sweden, sell in Spain. The same service delivery available in Liverpool is available in Lublin.
Factors that have caused this are international sourcing and supply, supported by local partners who are expected to perform in standard ways. The aspirations of partners to grow from silver level to gold and platinum – or whatever grading system is used – means that the same standards are maintained across national boundaries.
The impact of European Directives aimed expressly at getting a Europe-wide market without national hindrance, have had powerful effects. The breaking down of barriers to labour movement and consequent transfer of workers from one country to another, has also removed the need for a ‘local face’.
Will these effects spread wider? Without a doubt. The commercial imperatives alone will see to that.
As Willem Buiter has pointed out (Economic Internationalism 101, Maverecon, May 5), nothing can be done to halt the diffusion of “knowledge, skills, technology, management systems”. There is much more evidence of these inexorable trends at the Globalisation Institute [http://www.globalisation.eu/blog/ ]
In the future it will be more a case of ‘localisation with a global face’.