Some people believe that manufacturing goods in low-wage countries raises those countries’ standards of living; others argue that globalization is to blame for a loss of jobs and job security in the United States. Although opinions tend to be heated and opposed, both sides turn out to be right.
“Globalization means a world of opportunity and a world of danger,” writes Suzanne Berger, director of the MIT International Science and Technology Initiatives, in her new book, How We Compete: What 545 Companies around the World Are Doing to Make It in Today’s Global Economy. The book is the culmination of a five-year study conducted by the MIT Industrial Performance Center (IPC). With professor of nuclear science and engineering Richard Lester (IPC’s founder and director), Berger and a team of 13 professors and students visited more than 500 companies – some of them twice – to gain insight into how companies are responding to globalization.
The MIT group observed firsthand a wide range of companies – integrated-circuit designers in Silicon Valley, auto-parts makers in Mexico, even a balloon manufacturer in Minnesota. After witnessing a great variety of practices and asking hundreds of managers the same questions about how they were adjusting to globalization, the group concluded that there is more than one way to succeed in the global economy.
“What makes globalization so frightening to people is the thought that we’ve lost all control,” says Berger. “If there’s a single point the book tries to make, it’s that even with these pressures, there are very different ways of responding. It’s about the existence of space for choice and action and the importance of leadership within companies.”
The study found that even within industries, companies have found vastly different paths to success. Dell, for example, does design and marketing in-house but outsources almost all manufacturing to a Taiwanese supplier. Samsung, by contrast, retains internal control of everything from initial product development to manufacturing.
Visiting 500 companies in five years was no easy task, especially on days that involved “getting multiple people to a hot, dusty location in the Guangdong province,” says Lester. But Berger and Lester agree that there’s much to be gained from doing bottom-up research. Berger hopes that by providing readers with a trove of examples, the book will help move the discussion of globalization from general principles toward specific realities – and ultimately “make it possible for people whose positions are really opposed to have a thoughtful discussion.”