Dr. Xiao Feng, vice president of China Wanxiang Holdings, attended the 7th Investment and M&A Summit in Shanghai, according to local news on June 5th.
Dr. Xiao’s main comment on digital economic reform revealed speculation that globalization would shift from the physical to the digital world. He believes that blockchain and other explosive technologies will be the tools with which we realize this digital globalization. He explained that:
“Blockchain is a digital trust mechanism. Due to their irrevocability characteristics, […] immutability, when we move this data to a blockchain, it cannot be falsified. ‘
Digital globalization is there
Xiao believes that before the pandemic, globalization benefited many people, including China, Wall Street and multinational companies. However, it also left casualties like the middle class and industrial workers in many developed countries. He explained that:
“Because the middle class and workers cannot be globalized, this is called ‘non-tradable goods’ in the economy.”
However, he believes that after COVID-19, boundless digital globalization will benefit both developing countries and already developed countries. He clarified:
“With the help of digital technology, the workforce can be traded from now on, and employees do not need to move from the United States to China, even though the industry is moving there. [Let’s mention] education. Internet teaching in English has turned non-marketable things into marketable things … ”
Trends in globalization
According to Dr. Xiao, digital globalization will affect the organizational management systems of many companies, with more companies moving their operations online.
The initial ways in which companies measure their results will become less important, and a new framework for setting goals may replace them as the most important management structure. He says such a framework would be called “Goals and Key Outcomes” or OKR. Xiao says:
“Because we have to do one thing together in different time and space. We need to be transparent and align our goals, so we need OKR tools. “
He also argues that another impact of digitalisation will be seen by businesses that are undergoing a complete overhaul of the way they conduct their practices. He says the industrial revolution has reached a level of diminishing marginal utility.
In economics, the law of diminishing marginal utility states that the marginal utility of a good or service decreases as its supply increases. Economic actors set aside each subsequent unit of a good or service for less and less valued purposes.
As previously reported, venture capital investor Tim Draper also believes that digital financial innovations such as Bitcoin , smart contracts and artificial intelligence will lead a more globalized world.