The term ‘globalization’ has become increasingly divisive in the recent past. It is high time to redefine it and make globalization a term that emphasizes local opportunities on a global scale, instead of scaling globally in just a few locations.

When globalization is seen to disproportionately benefit Palo Alto, Amsterdam and Shanghai, it will inspire skepticism and resentment. Instead, it surely can and should spur growth and improve living standards everywhere, from Youngstown, Ohio, to the banlieues of Paris, and the rural provinces of China.

Local responsibility of global business is the key principle we must adopt to realize this vision. And it will rest on three pillars:

1. Designing for local impact

Global multinationals must look beyond scale and economic efficiency. Local communities have a stake and must accrue a fair share of the benefits global businesses create. Communities expect companies to respect local values and preferences.

Running accommodation is a truly local business: the facilities are local, the staff are local, and the guests have to be physically present. The vast majority of benefits accrue locally: revenue from guests, salaries, and taxes paid on this local value creation. While Booking.com takes a commission for its intermediation services, essentially we are a partner for digital transformation, especially to small businesses. Small properties become visible to guests all over the world and our platform levels the playing field for partners large and small.

2. Inclusiveness and diversity

Everyone deserves a fair chance to share in the benefits of globalization. But some have benefited more than others. That is why we need to double down on diversity and inclusiveness. A diverse and inclusive business is also better suited to recognize local needs and will, thus, be more successful in the long run.

The CEO of Booking.com, Gillian Tans, wrote: “There is still a strong under-representation of women in tech. This needs to change. Not only do we need more women in technology, we also need to see more of these women in leadership roles.”

Diversity is a business necessity and a source of competitive advantage. The more that innovation-driven enterprises compete on a global scale, the more they realize how valuable a diversity of opinions, experience, and perspectives is. There is still plenty of room to grow and improve, but the journey starts with a realization of the value of inclusiveness and diversity.

3. Intercultural understanding and exchange

Creating opportunities is about more than just creating jobs. It is about enabling people to develop the skills to succeed in a globalized, interconnected world. A better understanding of other cultures will reduce biases and prejudices, and foster a more tolerant society.

There is an increasing divide between those that feel at home in the world and those that feel threatened by globalization and migration. To address this gap and get more people exposed to other cultures, policymakers should make it easier for young people to embark on “work and travel” programmes.

In contrast to Erasmus-like exchange programmes, which serve those in higher education, these would be open to everyone. The EU could take the lead with a Blue Card programme, streamlining visa and social security requirements in the 27 member countries.

The Risks-Trends Interconnections Map 2018
Image: World Economic Forum Global Risks Perception Survey 2017–2018

There is little doubt that some of the most complex and intractable problems are global. Profound societal instability has been identified by the World Economic Forum as a linchpin in the The Risks-Trends Interconnections Map, linking issues such as increased polarization of society, changing climate, unemployment/underemployment, and rising income/wealth disparity.

Societal instability is serving no one’s interest, least of all the interests of global business. Acting with responsibility towards local communities is not just the right thing to do, it is an essential business necessity.

Gran Lindahl, chief executive of ABB, wrote about a new role for global business almost two decades ago. “Enlightened self-interest alone is reason enough for business to behave responsibly because good social practices help our bottom line.”

I’d like to believe that this is a view shared by an ever-growing contingent of multinational corporations. When we act with responsibility on a local scale, we can truly be globally successful.