Is There a Role for Localization in U.S. Foreign Policy?

Jeff Immelt, Chairman and CEO of General Electric (GE), recently gave the keynote address at New York University’s Stern School of Business convocation.  During his address, Mr. Immelt offered his opinion on what he considers to be ever-increasing attacks made on globalization by protectionist governments around the world and reminded his audience that globalization is still just as essential to growth as it was when it was still based on trade and global integration.  Mr. Immelt also warned that a pivot is necessary in order to compete in the new globalization framework and that GE will  lead a bold strategy of localization.

Mr. Immelt is certainly not the first, nor will he be the last, to talk about the state of globalization. A spirited discussion of globalization has historically made its way into just about every level of discourse. Some commentators regularly expound the phenomenon’s  evils, particularly in terms of negative impacts on the poor or the increased security threats it may pose, while other observers focus on the positive aspects of interconnectedness and simultaneously individualized nature of this new international development.  When globalization is talked about in terms of foreign policy in particular, at least one specific perspective encompasses both a security and economic focus on the movement of people across continents when local opportunities are simply lacking. As early as 2003, James Lindsay from the Council on Foreign Relations discussed the role of globalization in foreign policy and argued that effective international institutions can manage the downside of globalization.

Mr. Immelt’s announcement also leads to a somewhat obvious question—what exactly is localization? Localization can be defined a number of different ways, but it has typically been a strategy for businesses to deliver a genuine and tailored cultural experience that fosters customer loyalty.  And if globalization has been a driving force in U.S. foreign policy, does today’s political and economic climate suggest that the U.S. government consider a similar pivot to localization in order to be more effective?  Or is localization limited to a private sector strategy employed by a conglomerate like GE, which is focused propelling digital innovations like the Industrial Internet in order to build a competitive economic ecosystem?

These questions have no easy answer.  Perhaps though, they serve an important purpose if only to highlight the need for a hard look at the competitive aspect of foreign policy, whether that is strategic messaging or ensuring meaningful alliances and partnerships with foreign countries.  Mr. Immelt asserted in his address that GE’s innovation will make the world better because GE will solve problems with local capability.  We almost certainly have one of the first examples of this type of pivot to localization—GE is investing approximately $1.4 billion in new, local initiatives based in Saudi Arabia as the Kingdom seeks to diversify its economy from oil exports. As a global leader projecting a policy focused on shared investment in security and prosperity, democracy and progress, the U.S. should consider the lessons learned in localization by the private sector.

Image credit: Rajeev/Flickr.

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