28.10.2011 08:59

Economic butterfly effects

Globalization has both accelerated the pace of our daily lives and made the world seem smaller. A large, common market for the trading of commodities and services has altered the way we do business. As a result, the meaning of concepts such as innovation, price competitiveness, R&D and customer satisfaction is evolving. The presence of a shared market has sped up the innovation race, especially when it comes to technology – if you buy the latest mobile handset today, for example, a more advanced and price-competitive option will already be available tomorrow. Products today have a short shelf life, and new ones have to get to customers quickly; this is where air cargo comes in.

In an ideal environment, the world would be a shared marketplace that would offer businesses an equal opportunity to compete on the same platform, under mutually agreed rules. Not all nations are on the same level of technological advancement, however, and larger economic dynamics are affected by the way in which individual nations conduct business and grow. In recent times we have seen that when economies become integrated, mishaps in one corner of the world can affect the pace of global growth; in other words, economies are now exposed to a risky butterfly effect.

Concerned about vulnerabilities of their industries at home, developing economies used to be reluctant to open up to global markets. Recently, though, they have been left with no choice but to try and keep up with the pace of global economic growth; their populations also demand better products and infrastructure. The position of developing countries is further evidence to why common parameters and rules are required in a global economy. The WTO is trying to establish shared rules, but still has a long way to go before any consensus is generated.

The airline industry has to bear a major brunt of global economic swings, which will continue to be impacted by politics, natural disasters and financial mishandlings. In order to make the most of these changing times, airlines have to structure themselves in a cost-effective manner, motivate employees and be quick to respond to change. Beyond all of these factors, company leaders have to demonstrate a willingness to understand the market in a social and cultural context so that they can make decisions in a way that corresponds with the state of the world economy.

Globalization presents its own challenges to many different businesses. In air cargo, airlines and forwarding agents play a key role in which they can help the end customer (shippers and consignees) to adapt smoothly to continuous changes in the economy. Thus I believe that seamless cooperation and know-how between cargo professionals across different geographic areas and cultures brings significant added value to our customers.