A few days ago, I was in a hospitality sector zoom conference, when the keynote speaker said: “I genuinely believe we may be witnessing the beginning of the end of globalisation.”
I am not sure if I was more surprised by the statement itself or the fact that his presentation moved on to other matters in the blink of an eye. The catalyst to his comments was the news that the UK has now placed 33 high risk countries on a so-called “red list”.
People who have been in these countries in the 10-days before travelling are not currently allowed into the UK. British and Irish nationals, long-term visa holders and residents can enter from these countries, but they must quarantine for 10-days. In the past week many have called for the red list to be expanded, some even for it to become a blanket ban.
The trigger for this has been the realisation that new variants pose a major threat to vaccination programmes, which in turn appear to be the only viable option to long-term lockdown as a means of virus suppression.
On the assumption that what we mean by globalisation is the process of interaction and integration among people, companies, and governments worldwide – driven mainly by advances in transportation and technology – then we may already be in the middle of a fundamental shift in how it affects our lives.
There has been an extraordinary growth in international trade over the last century. Global exports today are more than 40 times larger than they were in 1913. The sum of worldwide exports is now close to 25% of total global output.
Up until around 2015 the removal of barriers to trade in the form of tariffs, quotas and export/import bans felt like an irresistible tide, but critics of globalisation in more recent years have changed that liberal political landscape.
In the so-called rich nations, the benefits of trade have not always flowed that evenly, leading to many poorer parts of their population feeling left behind – in turn creating major change in trade and immigration policies, such as Brexit. These changes are also having a dampening effect upon international travel and tourism volumes, both to and from the UK.
The hospitality sector has yet to see the impact of new EU trade arrangements now that the transition period is over – as it has been in lockdown. But all the early evidence points toward reduced cross-channel trade, less reliable product availability and higher priced imports. UK food inflation will certainly make a return in the year ahead as a result.
Combine these trade challenges with the impacts of Covid-19 and the improvements we are now implementing around sustainability, and we may see a major correction in the trend of increasing globalisation in the years ahead.
It is clearly too early to say what the long-term effects of Covid-19 will be, but the pandemic and its aftermath will certainly be driving a more domestic trade and industrial strategy in the UK over the next few years. In our home hospitality market this is of course a double-edged sword, whereby domestic vacation markets will thrive whilst those dependent upon international tourism and business will struggle.
Food production and distribution around the world has been disrupted by Covid, and international container trade has found itself in disarray, with large cost increases commonplace. The airline and air-freight business has been particularly heavily hit by Covid. Fleet numbers have shrunk dramatically and will take time to recapitalise and grow back. As a result, both demand and capacity in these markets will be weak for some time.
It is also becoming increasingly obvious to consumers that we are depleting the planet’s resources too quickly, and seriously damaging biodiversity. The link between globalisation and our sustainability problems is a strong one and is starting to impact consumer thinking and more importantly, behaviour.
The measurement (and labelling) of the carbon impact of food/drink ingredients/products is coming to the fore currently. It would be trite to suggest that carbon is the only problem, but I do feel that it will likely become a major driver of consumer demand change. In particular, it will draw attention to two big contributors of high levels of carbon – deforestation, and distance from field to plate (especially when air transport is involved). When coupled with the impact of Brexit we may well see a welcome renaissance of home grown, and perhaps seasonal eating returning to our nation in the years ahead.
Mark Twain, when rather ill, was quoted in a telegram saying: “Rumours of my demise have been greatly exaggerated”. The same may well be true of globalisation – this is probably not the beginning of the end, but a serious correction may well be well under way.
David Read: Is globalisation unravelling?
A few days ago, I was in a hospitality sector zoom conference, when the keynote speaker said: “I genuinely believe we may be witnessing the beginning of the end of globalisation.” I am not sure if I was more surprised by the statement itself or the fact that his presentation moved on to other matters in the blink of an eye. The catalyst to his comments was the news that the UK has now placed 33 high risk countries on a so-called “red list”.