What do you think the future of globalization looks like?

Populism and protectionism are rising in several OECD countries. This explains in part the Brexit vote in the United Kingdom, the election of Donald Trump in the U.S., and political debate in several EU countries such as in France, where INSEAD, the global business school, was founded in 1959. Not surprisingly, emerging countries which rely on the export engine are calling for openness of markets. If hundreds of million of jobs have been created in emerging markets in the past thirty years, one cannot deny that, in OECD countries, part of the population, mostly unqualified, have not benefited in terms of growth in real income. The debate on the origin of real wage stagnation—international trade or technological progress—goes on, but it is likely that political pressure to raise barriers on trade in goods and services and movement of workers across borders will increase. Until a political solution is found to deal with this part of the population with costly educational programs and/or social subsidies, the trend of ever-increasing globalization is being put to an end, at least for the coming ten years, in my opinion. 

How will this affect the economy in your country or region? 

INSEAD’s three campus are located in France, Abu Dhabi, and Singapore. Restrictions on trade and movement of people will have the following effects. For corporations, it puts constraints on efficient production and economies of scale, and it reduces competition. This therefore reduces real income. Impact on economic growth is uncertain. The creation of the 1992 single European market and the 1999 single currency with the euro were promoted with prospects of rapid economic growth. This did not materialize. A step backward with globalization has, in my opinion, uncertain effects on economic growth. For export-led countries, this requires adjustment in exports, investment in import substitution, and research.

How is your school preparing students for this world?

With its international faculty and student body, INSEAD is training “enlightened” leaders who must understand that value creation for their firms—private, NGO, or public—requires not only excellence in the management of a firm, but also an understanding of the functioning of the world economy and the ability to communicate on the benefits of competition, free trade, and technological progress. The latest example is the application of artificial intelligence. In the MBA Fintech elective course, attention is paid not only to the sources of digital disruption in financial markets, but also to the role of firms in shaping the public policy responses that must accompany technological progress.