Nativism, Technology, Markets, and You

As we ponder the effects of global trends which brought us the recent US election and Brexit, the theme of nativism continues to play strongly. Nativism is the urge to reject external influences, such as immigration, and focus upon one’s own country in a zero-sum game. The world is viewed as a continuous competition, in which only one “side” can ever win. It can lead to isolationism and aggression, creating mirroring responses throughout the globe.

Nativism in the US is powerful and influential with the current administration, but it has an important context. The world is changing rapidly and we are in the throes of an extraordinary technological revolution. Many of the reasons for the growth of nativism are related to adaptation issues with technology.

The Internet has blown the human conversation into a million shards of conflicting opinions and information with varying degrees of truth. Simultaneously, education and affluence have grown in countries around the world, particularly in India and China. While technology makes it possible to conduct business across vast distances, it also enables companies to move swiftly between countries for tax benefit, or to create overseas research capabilities.

These changes will be felt most particularly in technology markets themselves, as companies struggle to meet the demands of changing geopolitical influence and new business clusters emerge around the world.

For the IT sector, we can see:

  • Increased movement to cloud computing and digitization, fueled by the need to provide mobility and instant access to information, processes, and resources in locations around the globe.
  • Accelerating repatriation of Indian and Chinese technologists to their native countries, in response to anti-immigration policies and regulatory constraints (Baidu Adds xPerception to its AI/VR Stockpile). This is aided by improving home country conditions.
  • A continued rise in development of virtual and remote enablement technologies such as collaboration tools. This will lead to greater interest in AI, mixed with VR to perform the mechanics underlying real time conferencing across national borders (On the Intersection of AI and Augmented Reality).
  • Development of new re-headquartering protocols as companies hedge their bets and realize that they can now move more easily to tax havens such as Ireland or toward closer proximity to markets in Asia which are growing at a faster rate than markets in the West.
  • An increasing geopolitical benefit to countries which avoid nativism and embrace immigration, particularly with the huge numbers of engineers that are coming of age in China, India, and the European Union.
  • Development of overseas resources and research hubs for all international firms to hedge against immigration policies, as we have already seen with Intel and its recent MobilEye acquisition (Car Wars: Intel Bags Mobileye), which takes AI research to Israel.
  • An increase in automation and further support of AI and robotics in the workplace as US companies attempt to retain operations in America, where the cost of a human workforce remains high.
  • A growing uncertainty over markets in the US, leading to a wide range of effects overseas. The locus of innovation could move, and the structure of international finance could change due to the combination of Brexit and Trump.

There are likely to be a wide range of additional repercussions. The progress of these issues will remain obscured since technology is evolving swiftly, and creating so many fault lines and subordinate processes that it will be impossible to gauge the mid-term result.

We can expect an acceleration of global change. Just as nativism is in itself a result of disruption brought about by technology, it also tends to increase these effects. Political repercussions will inevitably follow. As countries withdraw from international cooperation to seek independent advancement, reaction will include political and military adventures, with uncertain economic results.

Ultimately, this could force even greater globalization and move technical concentrations around the globe. This will create in a flowering of technological innovation in diverse locations, with particularly interesting possibilities in China–which already leads the world in patents. Forcing China to be more self-reliant plays into its traditional strengths and can create surprises as Chinese technological firms develop in stealth mode and come into confrontation with Western firms.

Nativism is likely to increase in ferocity in the coming years, though it is faced with a strong resistance which could prevail as people react to negative effects on security and jobs. There is a tectonic shift underway that will create major changes; uncertainty is likely to emerge as a dominant theme. As with the age of Gutenberg, technology has outpaced the capacity to predict the future.

For businesses, it will be increasingly important to act locally but plan globally. National trends must be respected, but the context needs to be understood. Global markets and technology trends will persist. During this readjustment, maintaining balance between local and global demands will be critical.


 


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