May 7, 2009

Economists have endlessly debated the phenomenon of decoupling--the theory that, even in an age of globalization, the world's economies are not so linked that the downward motion of one, particularly of The Big One (that is, the U.S.'s), is guaranteed to bring the rest tumbling down with it (here's a primer, courtesy of The Economist). From what we've read, many economists have actualy been surprised at the extent to which decoupling has not taken place during the present recession, with even China's economy--the ultimate powerhouse of the past decade or so--going roughly stagnant.

Even so, as far as small businesses are concerned, it appears that the more globablly integrated you are, the more confident you are right now, according to a UPS report. Inc.com brings the news that in a survey taken last September (which, admittedly, came before the financial crisis began in earnest, but was taken in the middle of what we now know to be a year-plus-long recession), 56% of surveyed small business owners whose firms trade internationally expected to be in a better position one year from then; only 41% of owners of wholly domestic firms felt that way. And in a follow-up survey conducted last December--after the financial crisis hit, and hit hard, that is--the disparity remained, and in fact widened: 62% of the global business owners expressed confidence, compared to 39% of the domestic ones.

The fact of the widening, with the trends only exagerrated as the U.S. economy grew worse, is especially telling. It strongly suggests that, at least as far as perceptions are concerned, the advantage is with being globally integrated, and the disadvantage with not. If nothing else, after all, being globally integrated is one more way of diversifying your business and your customer base.

Think about it. There's a whole world out there. It might be time to start exploring.

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