In just a few months, COVID-19 travelled from China to more than 200 other countries and has now killed more than 200,000 people. Some claim the pandemic sounds the death knell for globalization – but in fact, it reveals the disasters that can arise when nations try to go it alone.

Covid-19 will not kill the process by which businesses or other organizations develop international influence or start operating on an international scale. Rather, it will accelerate underlying trends, compressing into 2020 a transformation in flows across national borders that would have taken years to emerge. As individuals and companies move online, national borders become less relevant. Virtual meetings are substituting for travel and physical meetings, with their greater efficiency leading to higher levels of engagement. This increased digital connectivity facilitates the rapid flow of ideas, the most influential dimension of the process by which businesses or other organizations develop international influence or start operating on an international scale (globalization). The scientific race to stop Covid-19 and find a vaccine has encouraged unprecedented collaboration. Greater global awareness is evident in the intense interest in the march of Covid-19 and spread of the Black Lives Matter protests to five continents. Not all flows are good, and the spread of bad and fake ideas is also accelerating, from meddling by foreign powers to anti-vaccine fears that undermine the fight against the pandemic. Covid-19 will also accelerate and transform financial flows. With more than 100 countries requesting emergency financing, those from the IMF and other multilateral groups will far exceed any previous era of cross-border capital flows. Holdings of overseas currencies are also rising. The pandemic is also likely to precipitate a new wave of cross border mergers and acquisitions, including higher rates of investment in and from the growth markets of East Asia. Travel has been curtailed by the pandemic, but personal travel will rebound sharply, as soon as a vaccine or medicine allow, thanks to pent up demand in China, the world’s largest source of international tourism. Business travel growth is likely to be permanently lower, since the pandemic has revealed the advantages of remote meetings. Trade was already declining for reasons that preceded and are unrelated to the pandemic. Overseas supply chains were built on outsourcing repetitive tasks to lower labour-cost countries. But artificial intelligence, robotics and 3D printing are changing the model: automated processes require machines and skilled labour, which are more abundant in richer countries. Demand for individual customization and rapid delivery encourages manufacturers to return home. For services, banks, insurers and law firms are putting their back-office functions on servers or in the cloud, rather than relying on far-flung, labour-intensive call or data processing centres. The politics of protectionism and nationalism reinforce these trends. The transformation of work is being accelerated by the pandemic. Machines do not get sick or spread viruses. Now that office workers are logging in from home, it begs the question as to why they need to be anywhere specific. Increasingly we will see the globalization of professional services. Many essential services cannot be done in another country. But banking, law and design can, often at a far lower cost. East Asia has been the principal beneficiary of globalization and remains an enthusiastic supporter. The region’s assiduous containment measures have allowed its economies to rebound toward pre-pandemic levels of growth. Meanwhile, US protectionism and its disastrous handling of the pandemic is accelerating its relative decline. The UK is less significant than it has been in centuries, with similar self-inflicted wounds hastening its slide. Covid-19 has accelerated the rise of east Asia as the centre of gravity of globalization. but it would make matters worse. The world, especially the countries devastated by Covid-19, need cross-border flows of vaccines, clean technologies and investments and trade that create decent jobs. Business as usual is not an option. We need to redouble our efforts to create a healthier, greener, better regulated and more inclusive globalization.

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