Many are calling for the end of globalization. This is based upon the fact that the world seems to be breaking apart and more "nationalist" sentiment is taking over.

This brings up the question of whether this is accurate or not. Many take it for granted based upon what was typically called "globalization". Hence, it makes sense if what took place years ago is reversing.

Is that all there is to the equation?

In this article we will review it.

The Reversal Of Globalization

When people use the term globalization, they are mostly talking about manufacturing. About 40 years ago, we saw a lot of American manufacturing starting to move offshore. The same thing happened in Europe and Australia. Much of this headed to China which was, by far, the low cost producer.

This process accelerated into the 1990s. We saw a lot of jobs lost in the developed world as China quickly become a major player on the global scene.

For a variety of reasons, this is starting to reverse.

One of the keys is that, simply, the cost of labor in China has increased. Being the low cost leader works fine until the country starts to gain some wealth and people want more. This allows other nations to surpass them.

Another challenge is technology. We are moving towards a time when more is going to be produced closer to where it is consumed. This is going to cut down on shipping costs. The key, labor, is reduced since technology mostly means automation.

The final piece of the puzzle is the recent realization that we cannot rely upon supply chains spread throughout the world. Companies that have some sense are going to tighten them. This means trying to have as much produced as local as possible.

All these factors lead to the end of globalization.

Is that truly the case?

Here are 3 areas which negates this concept.

Financial

While the production of goods is going to reverse what we saw over the last few decades, there is little doubt that the financial sector is not going to change back.

Financial matters are now global in nature. There are many reasons for this but the bottom line is trillions of dollars is moved around the world. The average person, due to the Internet, can invest in areas they never dreamed about. Accessing this is done through most of the major stock platforms. It is the same as buying a stock in an American company.

Of course, the banking industry is completely international. They entities operate in a global fashion, simply moving where the capital is. The major investment banks are just as likely to fund a project in Cyprus as Chicago.

Wall Street products are sold all over the world. Pension along with hedge funds are all buying in. It does not matter whether the address is Shanghai, Tokyo, or London. If Warren Buffett can get a hold of it from Omaha, so can these other funds.

This is one industry that is not de-globalizing.

The Online World

Go online and you enter the realm without national borders. Obviously there can be some limitations but most of what takes place is not based upon country.

Today, a kid with coding skills in Nigeria has the same opportunity to get an application on ITunes that reaches 100 million people as one from Silicon Valley. Where one is physically located means little.

This is going to keep expanding. As the talent spread throughout the world, opportunities will arise that will be taken advantage of by those in nations that are presently overlooked.

Ultimately, geographic location will mean nothing in this realm.

The concept of the Metaverse captures the imagination of many. While it might be overhyped at the moment, it does emphasize what can take place within the VR world.

While we do not know exactly how things will unfold, the bottom line is that, as the digital world expands, we will be interacting more on a global scale.

The Globalization of Real Estate

This is a theory that I laid out some time ago. Basically we are looking at a process that is going to operate in three phases over the next 20 years.

The extent to this is still to be determined. However, we can presume that remote work is only going to grow over the rest of this decade. The technology is only going to get better in this area, leading us to the point where it is far easier for companies to operate.

What happens is suddenly geographic location is less important for work opportunities. This could be helped along by Web 3.0. As people get more involved in cryptocurrency, we will see how much is going to change.

Ultimately, we could end up with a large number of "digital nomads". These people essentially are going to be free agents when it comes to where they live. Do not be surprised if we get to the point where nations are having to "compete" for citizens. With the ongoing demographic issues with the developed countries, this might come sooner than we think.

At the end of the day, people will be moving based upon many factors, with cost of living as one of the main priorities. Of course, a key to this is real estate pricing.

In the end, we could see the more expensive areas losing out as hundreds of thousands of people leave.

When we put this all together, we get an outcome whereby globalization is not ending. Instead, while the production of goods could be reverting back to like it was decades ago, there are other areas where it is accelerating forward.

Keep this in mind the next time someone says we are seeing the end of globalization.

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