As we progress further along the path of globalization, entrepreneurs must adjust their mindsets in order to take advantage of the benefits – and avoid the risks.
The entrepreneurial landscape is becoming increasingly internationalized. This globalization has resulted in nearly one-third of those working in U.S. startups being foreign-born. In Silicon Valley, the number rises to 45% of employees. On the other hand, 37% of all funding in the leading 20 startup ecosystems comes from foreign venture capitalists.
With an increase in interconnections between entrepreneurial ecosystems, greater cultural exchange, and the Internet as the sole, all-encompassing marketplace where businesses from all around the world compete, it’s worth asking if globalization is giving entrepreneurs more and better opportunities or getting them caught in a game they’re bound to lose.
Thriving at an international scale requires learning and making changes. Especially, changing your mindset.
In a 2016 Harvard Business Review article, scholar and author Michael Schrage proposed that nowadays, entrepreneurs don’t have to take their business global, but start their business with a global mindset. Innovative businesses should embrace the global landscape and evaluate their competition, value proposition, goals and options for growth with a global mindset from the get-go, the same way they don’t “go digital”, but are born digital.
Being born-global and born-digital goes hand in hand. During the last few years, we’ve seen the proliferation of SaaS options that allow teams to conduct their day-to-day activities remotely, attend meetings, manage workflows, collaborate and measure their results without ever being in the same building. This has allowed businesses to hunt for the best talent internationally and run on 100% remote, international teams.
A great example is language translation services leader Day Translations, which, besides having a network of dozens of thousands of freelancers and consultants to rely on for particular assignments, has a 100% remote staff.
As it’s been extensively shown, globalization fosters the sort of entrepreneurship that can bring sustainable growth to developing economies. So, when it comes to recruiting and, as we saw a few paragraphs above, funding, an increase in international communication has greatly benefited entrepreneurs. As pointed out in a recent study from Turkish scholars Prof. Dr. Ahmet Incekara and Ph.D. Candidate Mesut Savrul:
“When overall Global Entrepreneurship Monitor score of the countries compared with the globalization index, it can be said that the values almost overlap. In the last decade globalization index of the developed countries had no change at all and their entrepreneurship level had a little rise. On the other hand emerging markets and particularly developing countries gained too much from globalization phase in terms of entrepreneurship. While their globalization index increased 34%, their entrepreneurship approximately increased 238%.”
We can conclude that globalization is reaping benefits to entrepreneurs and to economies alike.
The main fear entrepreneurs might have regarding globalization is having to compete with the entire planet. The fear to sink in a sea of cheaper products or services that can be offered at those prices due to local advantages is not absurd. Legal incongruences might also jeopardize one’s chances for international growth: Censorship, trade protections, different legal standards for product approval, and a difference in patent laws can greatly jeopardize a business.
How do we solve this? Basically, by ensuring legal compliance as well as a deep cross-cultural understanding of the markets where our product could perform the best. Research, the aid of knowledgeable people, and a complete localization of our product, our brand and our message are the key to overcoming this challenge.
But not all the threats that entrepreneurs competing internationally face come from abroad. Poor conditions for entrepreneurship are the very worst, and they come from within the country or region of origin. Entrepreneurs in certain economies might be swimming against the tide, dealing with red-tape, corruption and inertia, while others have government-aid, flexible taxation, and a support system made up of institutions, accelerators and individual mentors.
As specialized scholar J. Ding concluded, in a 1998 essay on China:
“Globalization presents both benefits and risks for a nation. The extent of these benefits and risk depends on domestic policy.”