The cycle of small to big and back again

It occurred to me this morning that the dance of globalisation that countries are being lead in by mega corporations closely parallels the dance that businesses of all shapes and sizes go through.

Shouldn’t be a surprise really, when you think about it.

Over the course of my working life, the last 30 + years or so, I have seen businesses go through the stages of being small, growing (rapidly or otherwise) and getting just big enough they can see there are deals they are missing out on because they are not quite big enough to take on the work.

So they are enticed by the prospect of joining up with other companies to take on bigger projects, bigger deals.

Sometimes those collaborations are formalised and the smaller companies become one much larger entity. So now they can truly play with the big boys and get the deals they were so enticed by.

But after a while (maybe a few years or more), the cracks start to appear. They realise the big business isn’t as agile and flexible as the small companies were.

It’s often harder to get things done because there are more cats to herd, more people’s views to align, and often there are clashes of culture between the original companies and their staff, who reminisce fondly about the good old days.

Their costs are higher, because a bigger team means more overheads, more support staff, just more. And they start missing out on work because they are more expensive than the smaller, more flexible businesses.

So at some point, almost inevitably, the large entity starts to fall apart. Companies might spin off complete, or else leaders in the business walk away and staff follow them, to set up a new business.

And so the cycle starts again.

In the world of the mega corporates of course, they have managed to just get bigger and bigger, swallowing other companies through mergers and acquisitions, till the majority of large manufacturing brands who produce fast moving consumer goods are in the hands of less than 100 global corporations.

Those corporates are larger and worth more than the GDP many of the world’s nations.

And they have far more power. The power of threatening to move jobs to other countries where labour is cheaper.

Power to drive things like multi-lateral trade agreements — TPPA and TTIP for example.

So what is the pattern we see in countries of the world?

Small countries like New Zealand realised very early on that we needed to trade outside of our own shores to thrive. In fact, the British colonists who landed on our beaches had something along those lines in mind all along — providing that our soil was fertile and our climate friendly. We became a food basket for the United Kingdom, even developing refrigerated shipping to send our meat half way around the world.

We did a mini merger of a sort with Australia under the name of CER — closer economic relations. Which was supposed to provide this wonderful new opportunity for NZ businesses to trade easily with Australia and capitalise on the larger population.

And then we lost much of our existing trade arrangement with the UK when they joined the EU and had to place priority on produce from the continent, not the colonies.

The EU is a perfect example of the big corporate that many nations joined in the hope that things would be better for them. The concept of being able to trade across borders, in a common currency and have freedom of movement is naturally very attractive.

The reality of governments losing their autonomy while many decisions are made in the EU parliament was less so.

And now we see the first cracks appearing. The UK brexiting. Other countries going to their populations to see if they too wish to exit the EU. Greece tanked, Italy going down rapidly too, all with massive debts to the EU.

I don’t think it is the end of the world, although the markets might.

The mega-corporates must be a little stressed that their pawns are starting to move themselves again after they were so carefully placed on the board.

Politicians with any kind of nous are realising that this might be the chance to take back some of the power countries have lost, the opportunity to put people before profits that will never trickle down, to start holding megacorp to account for their taxes, for being decent corporate citizens, for putting the wellbeing of people and the environment first.

The god of the free market is falling and the concept of open borders and “free trade” that is in reality very expensive for our wellbeing and only beneficial for the few is also starting to be seen for the sham that it is.

We need to see beyond the lies and manipulation. We need to open the curtains and bring our own values back to the fore — “do unto others” is a great place to start. Call it empathy if you prefer.

Every politician should walk in the footsteps of those you are legislating about, experience first hand the effects of the decisions you are making. Don’t be afraid to get down from your lofty perch and join the rest of us mere mortals.