*{A New Look at Globalization and Asian Business [http://www.weforum.org/site/knowledgenavigator.nsf/Content/A%20New%20Look%20at%20Globalization%20and%20Asian%20Business?open&topic_id=300250000&theme_id=300] 29.10.2001 East Asia Economic Summit 2001} Azizan Zainul Abidin, Chairman, Petronas (Petroleum Nasional Berhad), Malaysia, indicated at the session over lunch that the topic, A New Look at Globalization and Asian Business, "may not agree with your digestion." Behind his light-hearted remark was a stark realization in the wake of unfolding economic and political events. It is now evident that globalization cannot yield the new economic order it seeks to create, he cautioned, without a "more enlightened, unilateral version" accommodating the needs of developing countries. "This is the challenge facing the world community." The first panellist to address the issue was John Kay, Economist, United Kingdom, who lectures at Oxford University, the London School of Economics and London Business School. He is also the author of The Invented Market, due out next year. Immediately after 11 September he remembered being asked whether or not global business and economies would change forever. Objectively, he said the events were not sufficiently momentous to steer global business on a completely new course. Subjectively, however, he is convinced the answer is "yes". The dates 2000-2001 signal "the end of a 20-year era." Globalization, he reminded participants, comprises a complex combination of liberalized markets, a new "world trade order," round-the-clock capital markets, reduced trade barriers, economic interdependence and global branding. "But a lot of what has happened is coming to an end." He argued the market liberalization process that began in the early 1980s with the election of British Prime Minister Margaret Thatcher and the Ronald Reagan presidency in the US reached its "triumphant climax" in 1989 with the fall of the Berlin Wall, only to be followed by the new technology bubble between 1996 and 2000 when "millions of Americans believed they could wish themselves richer by buying and selling pieces of paper at ever increasing prices." Today, he suggested, the world painfully confronts the reality that "it was all fantasy." Indeed, Kay argued that yet another fantasy still persists: the so-called V-shaped recovery with the "party starting all over again in 2002". "But that’s not true either," he said. "We have lived through one of the great speculative bubbles of history and we are all going to have to live with the consequences. We are not in for an easy time." The consequences of today’s burst economic bubble will be "protracted and unpleasant." He believes the world must now develop a "more sophisticated understanding of how market economies work." The vital message is "understanding that market economies don’t function by encouraging people to be as greedy as possible." Rather, they are embedded in a "complex and sound social, political and economic context." What they require is an "integrated social, political and economic system." Yet Kay is convinced long-term prospects for Asia "remain good," with numerous institutions in place enabling Asian countries to operate across frontiers and "great opportunities for growth and development." Growing demand in the Asian economies themselves will be the "engine of growth," he said, and the key is taking competitive advantage. "The key to business success is essentially unchanged," he added, citing niche carmakers BMW and Hyundai as examples. "Competitive advantage means doing things better and continuing to do things better than others." Vernon J. Ellis, International Chairman, Accenture, United Kingdom, countered Kay’s "apocalyptic" vision by insisting, "Globalization is here to stay." But he added that now that fragilities have been exposed, changes are inevitable and business has an important part to play. The rich-poor divide and trade inequalities are valid concerns. But is globalization really to blame for all the world’s ills? Underwriting inefficient corporations was behind the 1997 "Asian Meltdown," he noted. The answer is to continue along the road to institutional reform and sound economics, Ellis insisted. The danger is that "necessary economic reforms will be put off" and become a casualty. Governments still have an important role to play, he said. New technology still has "huge power to unleash change" -- not least through health and education. The context of globalization will change, he agreed, with complacency and triumphantalism consigned to history, replaced with "more value on goodness," "more sensitivity to local cultures" and more localization. Multinationals must become more involved in local business cultures and, above all, "we need to take a long-term holistic approach to markets." Nowhere is this more evident than in Asia, he noted, where China is one example of a country with "huge opportunities." Globalization is with us to stay, he added, "but it needs to be handled with more sensitivity and care in this very fragile world." *{Contributors: Ellis Vernon J. Kay John McLean Charles Zainul Abidin Azizan}