For decades, globalization has been a transformative and powerful force driving the world economy by breaking down barriers to information and resource sharing, leading to a greater interconnectivity of ideas, markets, and opportunities.
Technology innovation plays a prominent role in reducing barriers to globalization; globalization, in turn, fuels tech innovation.
But after years of this pattern of progress, some skeptics believe we have hit peak globalization—and that we are now beginning to see an undoing of cross-border collaboration and connectivity.
Such a reversal would be devastating for tech innovation. Luckily, we see no such trend. On the contrary, tech innovation remains—and always will be—a global endeavor.
History shows innovation continues to spread. Like water, most good ideas find a way.
The Perseverance of Cross-Border Innovation
There is undoubtedly some evidence of emerging decentralization and fragmentation across the globe. Recent years of intensifying geopolitical tensions have renewed pressures on international trade, expected to grow at a mere annual rate of 2.3 percent through 2031, according to a Boston Consulting Group recent report.
But some of the largest stressors—including trade tensions between the West and Russia or China’s prohibitions on foreign businesses in favor of domestic, state-run operations—have existed for decades. And some are expected to ease over time. For example, China’s recent appointment of Premier Li Qiang suggests a friendlier environment for foreign businesses.
What’s more, despite the above, history shows innovation continues to spread. Like water, most good ideas find a way.
The volume of information traveling across borders continues to climb by multitudes: In 2020, 5.3 billion gigabytes of data moved internationally every single day. Launching a business remotely is more affordable than ever. A startup founded in India today can still pursue the US market, even if its team is not based in the US.
A look at startup funding data signals just how global innovation continues to be. Non-US startups accounted for more than half of all funding and about two-thirds of all deals in 2022. Although the US continues to boast the largest number of highly valued startups, they can also be found in 45 other countries in the world.
Tech Innovation Depends on Globalization
The ability to expand globally unlocks a literal world of potential growth for today’s emerging tech innovators.
The value of an international mindset is undeniable: More than 70 percent of the world’s purchasing power exists beyond US borders, according to the US International Trade Administration.
But tech innovation relies on globalization for reasons that go beyond dollars and cents.
Cross-border supply chains, international distribution models, and global talent pools are not only helpful in bringing a product to market or broadening market share but have become essential to diversification and promoting resiliency amid market uncertainty.
Perhaps most important to recognize is that the world’s largest problems—the problems being tackled by tech innovators—cannot be solved at the local or national level alone. Global challenges demand global solutions.
Take climate change, for instance. If startups were to work towards reducing carbon emissions in one country alone, the fight to Net Zero would fail. Decarbonization cannot be achieved by one innovator: It will take a team of global collaborators to find success.
When we empower tech startups to connect, build, and diversify across borders, we open the door to larger market opportunities, more effective innovation, and more impactful progress.
Embracing the Global Mindset
At B Capital, a global approach to supporting tech innovators is cornerstone. We believe that transformative companies can come from—and grow to—anywhere in the world, and we’re committing to helping their founders access the capital, resources, and support they need to reach their dreams.
For example, Nektar.ai, which uses artificial intelligence to optimize B2B sales teams, started off in Singapore and India. It has since then grown to have a large customer base in the US, where there was a clear need for the product.
Connecting the most talented minds with the necessary capital and resources, regardless of their location, is key to driving technology innovation. And when innovation thrives, it generates positive effects for our communities and economies, promoting growth, job creation, and ultimately improving our quality of life.