Rethinking Europe in the light of 'glob-alone-isation'
10 November, 2017
The US elections, Brexit, the German elections and tensions in Spain are among a series of events in recent months that demonstrate a self-centred discontent with globalisation. This rise of what some now call 'glob-alone-isation' is not going away any time soon. The tendency for nationalism is correlated with a perception among many Europeans that their countries are losing influence in the world.
The rhetoric about unfair competition in trade of goods and services has now expanded to include the risks of human flows and migration. While refugees make up only 10% of all migrants, their number has nevertheless risen by about 25 million in 50 years. With income inequality on the rise in developed countries, those feeling the most pressure are twice as inclined to claim they are being adversely affected by migration and trade, and are thus eager to resort to nationalism.
But economically, globalisation matters. In spring 2017, we asked more than 2,000 C-suite executives in Europe which trends have the most important impact on their business performance and their will to invest and thus nurture the European economy. They told us that the pressure of anti-globalisation, nationalism and increased migration are among the top factors running counter to increased investment.
Moreover, a majority of businesses want “more Europe”. The EU has delivered 60 years of peace and prosperity, with faster GDP per capita growth than the US over that period. Today, most companies (53%) think EU membership has been good for their businesses, with only 15% disagreeing while the rest feel neutral.
Globalisation is changing rapidly – and it's all about the rise of data flows. Every day, around 25 million cross-border Google searches lead to e-commerce. Those flows have grown by a factor of 45 in the last 15 years, and are projected to grow another nine-fold in the next five years. Their contribution to our economies is today as large as the ones of traditional trade in goods and services.
Perception never goes away if not managed; we need to do more about migration. A recent Eurobarometer shows that 38% of EU citizens think of migration as one of the two most important issues facing Europe, just behind terrorism at 44%. Multiple experiments provide evidence that migration can be managed – and best practice could be scaled across Europe.
Last but not least, you can only fight fear with trust. Europe, like much of the world, is facing a crisis of institutional confidence, in an era of fake news, authoritarianism and populism. Just 42% of citizens now say they tend to trust the EU, down from 57% ten years ago. As a consequence, there is a sense that democracy is no longer sufficiently effective. To rebuild trust, European citizens need to be more engaged in the European project. In addition to creating a more attractive European narrative and improving government service delivery, Europe may aspire to directly engage citizens in policymaking decisions. (abridged)
The author is Director of the McKinsey Global Institute. The article is based on a speech delivered at Friends of Europe's annual State of Europe conference.