The New Rules of Globalization

Until 2008 going global seemed to make sense for just about every company in the world. Since then, we’ve entered a different phase, one of guarded globalization. Governments of developing nations have become wary of opening more industries to multinational companies. They are defining national security more broadly and perceiving more and more sectors to be of strategic importance, taking active steps to deter foreign companies from entering them and promoting domestic, often state-owned enterprises. Indeed, the rise of state capitalism in some of the world’s most important emerging markets has altered the playing field. To factor globalization’s new risks into strategy, executives must consider their industry’s strategic importance to the host government and their home government. They can then choose among various approaches: strike alliances with local players, look for new ways to add value abroad, enter multiple sectors, or stay home.