GLOBALIZATION = EQUALIZATION  

As much as Europeans and North Americans fear the result, today's reality is that globalization brings greater equalization to the planet. In wage rates, standards of living, health standards, equalization of opportunities and technological balance. Industrialized countries that previously held an upper hand, will become uncomfortable, to see other countries that once languished in a second or third world backwater, catch up and overtake them. To ignore this fact is to be blind to the opportunities that come with approximately equal standards in all countries.

The main problem for already-industrialized countries is accepting the fact that developing countries are growing rapidly ahead and constantly, while we appear to be standing still or moving forward ever so slightly. The answer is relatively simple. A 10 percent growth rate in a country that has a per capita income of $500 means only an extra $50 income that year. In countries as the U.S. or Canada, a 10 percent growth on $20,000 means $2,000. Conversely, we only need a growth rate of one-quarter of one percent to increase our income by $50 annually. A country suffering limited growth after rapid development for years is reminiscent of slowing your car down on the freeway from 100 kph to 25 kph. Then driving seems parking.

Until Japan moved into the modern world, no country had ever increased annual per capita income 10 times in one generation. Now many are doing it. India has created a strong middle class of about 250 million people during the last five years. Korea, along with the other three tigers, Hong Kong, Singapore and Taiwan, with a total population base 70 percent less than Japan, last year exported more goods and services than did Japan, the world leader in manufacturing technological innovations. Japan has recently slowed down a bit because they are putting so much into future research and development, that they have switched immediately income-productive forces to work on advanced technologies in preparation for their next major economic move.

Even Germany, which led in scientific fields and precision manufacturing since from prior to WWI has had to serve notice on their workforce that high salaries have been responsible for loss of jobs. Some 20,000 workers in the engineering industry lost employment last year because labor costs were not competitive. In North America neither labor union executives or corporation bosses have been able to summon the strength to "tell it like it is" here.

Even in Italy, where for decades the scala mobile, or escalating wages were a given, almost as if granted by God directly to the workers, is now under fire. Increasingly, the Italian public is beginning to get the message: l a b o r c o s t s a r e t o o h i g h. Regardless of fluctuating currency exchange rates, only competitively-priced products sell. West Germans and Italians among others are taking corrective action.

Canadian industries complain about the "high Canadian dollar". High by just five percent, most say. Three years ago the Japanese yen doubled in value on the world market. Did they complain? No, they cut production costs by almost 50 percent in six months. So overseas sales, with dramatically lower costs, resulted in enormous profits in foreign dollars. This provided fantastic funding to invest even more in research and development to handle changes in the global marketplace. Today with 144 jobs available for every 100 applicants in Tokyo and with an ageing population, they realize they will have to swing even more into robotics. They are doing that. Last year Japan introduced more robots into industry than North America has ever installed since robots became available in industrial quantities. Once a robot covers its cost, production costs drop even more.

Unless we learn to compete in this changing world, our standard of living will decline precipitously until Canada reaches the world average. This will not apply to all. Those who comprehend the concepts of change can experience a golden future. In Canada costs will be constantly dropping and profits increasing for these types of companies. The foundation for the wealth created in America during the past four decades came mainly from the sunrise industries created during the depression of the 1930s. Entrepreneurs in oil, automotive ventures, railroads, aerospace industries, broadcasting, publishing and shipping who survived the depression found it a piece of cake to make money in the growth years. The same can and will happen in the 1990s.

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