Global Problem Solving Without the Globaloney

Believing that the world is “flat,” many organizations attempt to solve pressing social and environmental problems on a global scale. All too often, these efforts flounder because the problems that seemed global in scope could have been more effectively solved at the regional, national, or even local level.

There is widespread belief not just that globalization is on the rise, but that it is already (close to) complete. Fed by books such as Thomas Friedman’s The World is Flat, and by heightened awareness of truly global problems such as climate change, large numbers of people believe that many, if not most, of today’s social and environmental problems are the result of global trends and that their solutions must also be global in nature. I refer to such overstatements about the extent of...

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1 For a detailed discussion of the consequences of globaloney and how to do better,
see Pankaj Ghemawat, World 3.0: Global Prosperity and How to Achieve It, Harvard
Business Review Press, 2011.
2 Jeff Tollefson and Natasha Gilbert, “Earth Summit: Rio Report Card,” Nature,
no. 486 (7401):20–23. doi: 10.1038/486020a. Available at:
4 Eli Malinsky, “Bill Drayton’s Five Trends for Social Entrepreneurs,” Forbes, Dec. 12,
2012. Accessed on June 18, 2014, at
5 Pankaj Ghemawat and Steven A. Altman, Depth Index of Globalization 2013. Available
6 Kenneth W. Abbott and Thomas Hale, “Orchestrating Global Solution Networks,”
7 Although nominal exports add up to 32 percent of global GDP, if you remove doublecounting,
only about 23 percent of value added around the world gets exported.
8 Mail (international share of letter-post items, 2012) is based on data from Universal
Postal Union; University students (students enrolled in degree programs outside
their home countries as share of total tertiary education enrollment, 2011) is based
on data from Euromonitor Passport, UNESCO Institute for Statistics, and Ministry
of Education of the Republic of China (Taiwan); Immigrants (immigrants’ share
of total world population, 2012) is based on data from United Nations Department
of Economic and Social Affairs, “Trends in International Migrant Stock: Migrants
by Destination and Origin
,” 2013 (United Nations database, POP/DB/MIG/Stock/
Rev.2013) and World Development Indicators; Telephone calls (international share
of total telephone call minutes, including calls placed over the Internet, 2013 estimate)
is based on data from International Telecommunication Union and Telegeography
(note that this estimate includes calls between telephones using voice over
IP technology, calls between telephones and computers, and calls directly between
computers via Skype but does not include calls directly between computers using
other services); Co-invented patents (share of patents with at least one foreign coinventor
in OECD member countries, 2009-2011) is based on data from OECD Science,
Technology, and Industry Scoreboard 2013: Innovation for Growth
; Direct investment
(Outward Foreign Direct Investment Flows as percentage of Gross Fixed
Capital Formation, 2012) comes from UNCTAD World Investment Report 2013; Private
(share of grants from US foundations to non-US based charitable organizations,
2007) comes from Global Geneva; Tourists (international share of total
international and domestic tourist arrivals, 2012) taken from United Nations World
Tourism Organization, “UNWTO Tourism Highlights,” 2013 edition; Facebook
(share of Facebook friends located in different countries, 2011) comes from
Jason Ugander, Brian Karrer, Lars Backstrom, and Cameron Marlow, “The Anatomy
of the Facebook Social Graph
,” arXiv:1111.4503, [cs.SI], Nov. 2011; Internet traffic
(international share of total Internet traffic, 2012) is an estimate based on data
from Cisco Visual Networking Index and Telegeography; Twitter followers (share
of Twitter followers located in different countries from the people they follow, 2012)
comes from Yuri Takhteyev, Anatoliy Gruzd, and Barry Wellman, “Geography of
Twitter Networks
,” Social Networks, vol. 34, no. 1, Jan. 2012; Mergers (international
share of total M&A transactions both in number of transactions and in value based
on the 40 percent of transactions with values reported, excluding spinoffs, 2013)
comes from Thomson Research; Public debt (foreign debt share of total public debt,
2012), based on data from Euromonitor; Exports/GDP (gross exports of goods and
commercial services as percentage of world GDP, 2012) comes from World Trade Organization
and World Development Indicators; Portfolio equity stocks (inward portfolio
equity stock as percent of market capitalization of listed companies, weighted
average across 88 countries, 2012) comes from IMF Balance of Payments and International
Investment Position Statistics and Euromonitor.
9 Harvard Business Review online globalization survey launched on April 25, 2007.
10 Jason Ugander, Brian Karrer, Lars Backstrom, and Cameron Marlow, “The Anatomy
of the Facebook Social Graph,” arXiv:1111.4503 [cs.SI], Nov. 2011. Available at:
11 Yuri Takhteyev, Anatoliy Gruzd, and Barry Wellman, “Geography of Twitter Networks,”
Social Networks, vol. 34, no. 1, Jan. 2012: 73-81. Available at:
12 Pankaj Ghemawat and Steven A. Altman, “DHL Global Connectedness Index
2012,” Report, Deutsche Post DHL, 2012. Available at:
13 Pankaj Ghemawat and Tamara de la Mata, “Globalization and Gravity,” unpublished
working paper, IESE Business School, Sept. 2013.
14 N. Gregory Mankiw and Michael D. Whinston, “Free Entry and Social Inefficiency,”
The RAND Journal of Economics, vol. 17, no. 1, Spring 1986: 48-58. Available at:
15 It has even been suggested that “While social entrepreneurs are driven by an ethical
obligation and desire to improve their communities and societies, egoism can drive
them to follow unethical practices. Egoism is especially relevant because the identity
and passions of social entrepreneurs usually compel them to create and lead social
ventures.” Shaker A. Zahra, Eric Gedajlovic, Donald O. Neubaum, and Joel M. Shulman,
“A Typology of Social Entrepreneurs: Motives, Search Processes, and Ethical
Challenges,” Journal of Business Venturing, 24, 2009: 528. Available at:
16 Kenneth Andrews, The Concept of Corporate Strategy, Richard D. Irwin, 1971.
17 Luigi Guiso, Paola Sapienza, and Luigi Zingales, “Cultural Biases in Economic Exchange,”
working paper, National Bureau of Economic Research, Dec. 2004. Available
18 On the first three flows, see Guiso, Sapienza, and Zingales, “Cultural Biases in Economic
.” On venture capital investment, see Laura Bottazzi, Marco Da
Rin, and Thomas Hellmann, “The Importance of Trust for Investment: Evidence
from Venture Capital
,” ECGI - Finance Working Paper No. 187/2007; EFA 2007 Ljubljana
Meetings Paper; CentER Discussion Paper Series No. 2010-49 (Revision of
No. 2009-43); TILEC Discussion Paper No. 2010-023. Available at SSRN: