Research-Technology Management

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COVID-19’s Impact on Globalization and Innovation

Tammy McCausland

To cite this article: Tammy McCausland (2020) COVID-19’s Impact on

Globalization and Innovation, Research-Technology Management, 63:6, 54-59, DOI:
10.1080/08956308.2020.1813506

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Published online: 06 Nov 2020.

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Resources

COVID-19’s Impact on Globalization and

Innovation
Tammy McCausland

We are more than six months into the Reconstruction and Development, sug- as well as the global economy.” A sub-
pandemic with no signs of the corona- gests in her Financial Times piece that sequent BofA study published in July
virus abating. In that short time our “the quest to find the most cost-effective 2020, notes that “companies in over
world has changed dramatically––how suppliers has left many companies with- 80% of global sectors have experienced
we live, shop, educate our children, out a plan B” and that businesses will disruptions in their supply chains during
receive healthcare services, and engage be forced to “rethink global value the pandemic.” Many stakeholders are
with others personally and profession- chains … [that were] shaped to maximize drawing the same conclusion—namely,
ally. Companies have had to adapt efficiency and profits.” She asserts that Browning writes, that “portions of sup-
quickly or risk going under; many are the coronavirus “will not end globaliza- ply chains should relocate, preferably
reinventing themselves and reshaping tion, but it will change it. Companies within national borders, and failing
how they operate. Experts offer differ- will have to adapt to succeed.” In a that, to countries that are deemed
ing opinions about the best path for- CoronaNomics podcast episode, journalists allies.” And while reshoring will come
ward for companies, especially those Ben Chu and Lizzie Burden discuss with higher costs, she says the costs will
with global operations: some advocate deglobalization with Harvard economist be manageable.
reshoring and bringing operations Dani Rodrik and Penelope Goldberg, for- Reshoring is a “complex proposi-
home; others encourage companies to mer chief economist of the World Bank. tion,” writes Michelle Comerford in
open up and collaborate; yet others sug- Rodrik and Goldberg offer their perspec- “‘Reshoring’ in the Age of a Global
gest using data to help companies pivot tives about what a less globalized world Pandemic,” because it requires site
more quickly. might look like. selection planning, defining the opera-
The decades-old global supply chain Since the pandemic caught Europe tion’s scope, determining project financ-
was created during the push to global- and North America with their prover- ing and incentives, and careful planning
ize; companies moved manufacturing bial pants down, businesses are evalu- and execution. Sara Brown notes,
offshore because it was cost-effective ating their supply chains. According to “Many companies are looking at
and efficient. But in the early days of an April 2020 Thomas survey of 878 restructuring their supply chains, trying
the coronavirus, as countries scrambled North American manufacturing and to balance resilience with efficiency and
to source scarce personal protective industrial sector professionals, “64 per- reduced costs—a process either started
equipment (PPE) and ventilators, prob- cent of companies across the manufac- or accelerated because of the pan-
lems with relying on only a few players turing and industrial sectors ‘are likely demic.” But in her article, “Reshoring,
in the supply chain became glaringly to bring manufacturing production and restructuring, and the future of supply
obvious, especially given tensions with sourcing back to North America,’ to chains,” Brown quotes MIT professor
China and the global competition for avoid similar difficulties in the future.” Yossi Simchi-Levi, who says restructur-
these supplies. Beata Javorcik, chief COVID-19 has “exposed fault lines in ing plans vary by industry and reshoring
economist at the European Bank for global supply chains,” writes Candace doesn’t guarantee resilience, and MIT
Browning in a recent Barron’s commen- professor David Sheffi, who says, “While
In this space, we offer a series of summaries on tary. Browning, head of global research some companies have been leaving
key topics, with pointers to important resources, at Bank of America (BofA), cites a China over the last decade as costs go
to keep you informed of new developments and
help you expand your repertoire of tools and
pre-coronavirus BofA study in which up… most can’t and won’t, move their
ideas. We welcome your contributions, in the the authors noted that “companies in supply chains out of the country com-
form of suggestions for topics and of column half of all global sectors for North pletely.” Brown also points out how
submissions. America were reshoring their pilot proj- both professors agree that overall, the
DOI: 10.1080/08956308.2020.1813506 ects… the first signs of reversal in a supply chain has held up well.
Copyright © 2020, Innovation Research
Interchange.
multi-decade trend that could have pro- The pandemic hasn’t been all bad
Published by Taylor & Francis. All rights reserved. found implications for manufacturing, news. COVID-19 spurred the rapid

54  |  Research-Technology Management  •  November—December 2020

mobilization of scientists worldwide and
has fostered unprecedented global Resources
cooperation to develop a vaccine. The
World Health Organization (WHO) cre-
ONLINE
ated the R&D Blueprint, which has
Andrea Alexander, Aaron De Smet, and Mihir Mysore. 2020. Reimagining the post pandemic
“facilitated a coordinated and acceler-
workforce. McKinsey Quarterly, July 7. https://www.mckinsey.com/business-functions/orga-
ated response to COVID-19, including nization/our-insights/reimagining-the-postpandemic-workforce
an unprecedented program to develop
Bank of America Global Research. 2020. Tectonic shifts in global supply chains. https://www.
a vaccine, research into potential phar- bofaml.com/content/dam/boamlimages/documents/articles/ID20_0147/Tectonic_Shifts_in_
maceutical treatments and strengthened Global_Supply_Chains.pdf
channels for information sharing Bank of America Global Research 2020. The USD 1 trillion cost of remaking supply chains:
between countries.” Artificial intelli- Significant but not prohibitive. https://www.bofaml.com/content/dam/boamlimages/docu-
gence (AI) and advanced computing ments/articles/ID20_0734/cost_of_remaking_supply_chains.pdf
power have facilitated the unparalleled Sara Brown. 2020. Reshoring, restructuring, and the future of supply chains. MIT Sloan
rapid development and testing of poten- Management, Jul 22. https://mitsloan.mit.edu/ideas-made-to-matter/reshoring-restructuring-
tial vaccines. The PPE shortage also and-future-supply-chains
sparked a wave of innovation as com- Candace Browning. 2020. Supply chains on the move as global pressures mount. Barron’s,
panies large and small and entrepre- Aug. 7, https://www.barrons.com/articles/supply-chains-on-the-move-as-global-pressures-
neurs began to create and manufacture mount-51596825253

face masks, face shields, and parts for Henry Chesbrough. 2020. To recover faster from Covid-19, open up: Managerial implications
ventilators to help solve the shortage. from an open innovation perspective. Industrial Marketing Management 88: 410–413.
https://doi.org/10.1016/j.indmarman.2020.04.010
3D printing, as I outline in “3D Printing’s
Time to Shine,” has played an important Michelle Comerford. 2020. ‘Reshoring’ in the age of a global pandemic. Supply & Demand
Chain Executive, July 8. https://www.sdcexec.com/warehousing/article/21131159/
role in this innovation.
reshoring-in-the-age-of-a-global-pandemic
Adi Gaskell offers other examples of
Luis Dahlander and Martin Wallin. 2020. Why now is the time for “open innovation.” Harvard
positive innovations that have hap-
Business Review, June 5. https://hbr.org/2020/06/why-now-is-the-time-for-open-innovation
pened during the pandemic in his article
Adi Gaskell. 2020. How the coronavirus is transforming innovation. Forbes, June 4.
“How The Coronavirus Is Transforming
https://www.forbes.com/sites/adigaskell/2020/06/04/how-the-coronavirus-is-transforming-
Innovation.” Gaskell mentions “low- innovation/#52313a88c73e
hanging fruit” innovations, like plexi-
José Guimón and Rajneesh Narula. 2020. Ending the COVID-19 pandemic requires more
glass installed by grocery stores and international collaboration. Research-Technology Management 63(5): 38–41. DOI:
other retailers; he also discusses more 10.1080/08956308.2020.1790239
radical change, like robots in hotels and Megan Hart. 2020. Remote work after the pandemic. Journal of Accountancy, July 13.
digital transformations in education and https://www.journalofaccountancy.com/news/2020/jul/remote-work-after-coronavirus-
health care. Gaskell writes, “while inno- pandemic.html
vation is a fundamentally disruptive Beata Javorcik. 2020. Coronavirus will change the way the world does business for good. Financial
affair, the process of innovation itself Times, April 2. https://www.ft.com/content/cc2ff3f4-6dc1-11ea-89df-41bea055720b
can be disrupted. We’re already seeing Lynn Kier. 2020. Remote work: The ultimate equalizer for talent acquisition and employee
the early signs of that in the initial experience. Forbes, Aug. 10. https://www.forbes.com/sites/forbescommunicationscoun-
months of the pandemic, and it’s a cil/2020/08/10/remote-work-the-ultimate-equalizer-for-talent-acquisition-and-employee-
transformation that is likely to have sig- experience/#3fa117327986
nificantly further to go yet.” Tammy McCausland. 3D printing’s time to shine. Research-Technology Management 63(5):
Henry Chesbrough, the father of 60–62. DOI: 10.1080/08956308.2020.1790290
open innovation, asserts that innova- Sudneesh Nair. 2020. 5 data-driven solutions to the global disruption of supply chains. Fast
tion will have an important role to play Company, May 27. https://www.fastcompany.com/90508657/5-data-driven-solutions-
to-the-global-disruption-of-supply-chains
in the recovery from the pandemic. In
an article published in Industrial Thomas. 2020. Supply chain dive: 64% of manufacturers say reshoring is likely following
pandemic survey. May 14. https://business.thomasnet.com/press-room/news-highlights/
Marketing Management, he writes,
supply-chain-dive-mfg-reshoring-is-likely
“Opening up mobilizes knowledge from
many different places, causing our World Health Organization. 2020. R&D Blueprint. https://www.who.int/teams/blueprint/covid-19

learning to advance and our progress

PODCASTS
against the disease to accelerate.”
Chesbrough argues that opening up Ben Chu and Lizzie Burden. 2020. Covid-19 & deglobalization: What will the post-pandemic
world look like? Project Syndicate: CoronaNomics, July 9. https://www.project-syndicate.org/
“will create more experiments, generate
videos/covid-19-deglobalisation-what-will-the-post-pandemic-world-look-like
more knowledge, and explore more
ways to apply that knowledge for

Resources November—December 2020  |  55

customers’ businesses. And it is a good must put data to work intelligently to remote employees. Teleworking will
business practice in other times as well.” help us all be better prepared for the inevitably impact how companies engage
He encourages open innovation despite next major disruption.” in innovation globally.
nationalist trends that have arisen Due to the coronavirus, more people The world eagerly awaits news of a
during the pandemic. are working remotely than ever before. coronavirus vaccine. International col-
“While concerns over intellectual “Once the pandemic subsides, many laboration will be needed for the global
property, return on investments, and companies will explore the long-term manufacturing, distribution, and rollout
various unforeseen consequences of potential of working remotely,” writes of any approved vaccine. However, in
open innovation are all valid, what we Lynn Kier in Forbes. “A Gartner survey “Ending the COVID-19 Pandemic
are experiencing now is an opportunity of 317 CFOs and finance leaders Requires More International Colla­
to innovate through and beyond the revealed that three-quarters will move boration” published in RTM, José
crisis,” write Linus Dahlander and at least 5% of their previously on-site Guimón and Rajneesh Narula argue,
Martin Wallin in their Harvard Business workforce to permanently remote posi- “limits to the global innovation system
Review article. The authors share lessons tions, and nearly a quarter intend to are apparent as governments jockey for
learned that companies can use to move at least 20% of their on-site preferential access to potential vaccines,
embrace open innovation now and employees to permanent remote posi- and commercial priorities such as pric-
post-pandemic. They suggest companies tions.” Remote work, she writes, “fos- ing and intellectual property rights place
forget about intellectual property for the ters increased productivity, enhances the pharmaceutical sector at odds with
time being and “focus more on creating flexibility, contributes to cost savings globally optimal outcomes.” While sev-
value than capturing value.” Dahlander around office overhead, reduces (or, in eral vaccine candidates are currently in
and Wallin recommend that companies most cases, eliminates) commuting phase 3 clinical trials, researchers do not
leverage two-sided motivation by “rely- time.” She suggests remote work’s yet know how effective any approved
ing on a combination of hard and soft greatest advantage is “its power to vaccine will be, how many shots will be
incentives to motivate internal and become the greatest equalizer in busi- required, or whether, long-term, vacci-
external collaborators.” They encourage ness, talent acquisition and employee nation will be annual like the flu shot
companies to embrace new partners experience today.” Remote work rem­ or more like the tetanus booster shot
amid the pandemic and beyond it and oves geographic boundaries, allowing (once every 10 years). Further global
to plan for the new normal, not how to employers to seek talent outside the collaboration may be needed for an
get back to the old one. They conclude, typical commuting area without having effective, long-term solution.
“Smart companies will seize this oppor- to worry about relocation costs. It levels What has COVID-19 done to global-
tunity to rethink their innovation the playing field between companies ization and innovation? The virus has
infrastructure.” competing for top talent by offering exposed supply chain issues and fired up
In a Fast Company article, Sudneesh “remote work” as an attractive benefit. proponents for reshoring while simulta-
Nair writes, “The weaknesses exposed Remote work can also enhance neously inspiring innovation, collabo­
by this crisis are not brand new, but employees’ experiences and career rative problem solving, international
they should be a wake-up call that cur- achievements. collaboration, and entrepreneurialism.
rent strategies are not sustainable.” He Andrea Alexander, Aaron De Smet, The “same-old, same-old” is no longer
suggests that while the limits of the and Mihir Mysore, suggest many compa- feasible, which may not be a bad thing.
modern global supply chain were nies post-pandemic may use a “hybrid Post-pandemic, we will find a new bal-
already being tested by the US-China virtual model” of employees working at ance, and it is at least possible that the
trade war and Brexit, the pandemic home and onsite. In their article positive experiments will continue and
exposed the danger of becoming overly “Reimagining the post pandemic work- be harnessed to tackle other global issues.
dependent on a few distant suppliers force,” the authors write, “The new
for necessities like medical equipment. model promises greater access to talent, The Amazon Management System:
Nair says the solution is “better visibility increased productivity for individuals and The Ultimate Digital Business Engine
and the ability to pivot quickly when a small teams, lower costs, more individual That Creates Extraordinary Value for
crisis arises. The key to achieving this is flexibility, and improved emp­loyee expe- Both Customers and Shareholders
to use data in smarter ways to spot dis- riences.” “Even as offices reopen, organi-
ruption sooner, accurately gauge its zations shouldn’t expect everything to Ram Charan and Julia Yang, Ideapress
impact, and make intelligent decisions return to normal,” writes Megan Hart. Publishing (December 2019)
about alternative sources of supply.” He “Although some employees may be eager Ram Charan, the best-selling author
proposes five data-driven strategies: to return to in-person collaboration with of several business books, and Julia
incorporate third-party data, acquire their colleagues, others may prefer to Chang, an adviser to entrepreneurs and
real-time data for real-time insights, continue working from home.” In her executives, distil the Amazon manage-
look beyond logistics to pricing, encour- article “Remote work after the pan- ment system in their book The Amazon
age suppliers to digitize, and prepare for demic,” Hart shares experts’ tips for tran- Management System: The Ultimate Digital
the future. He concludes, “Businesses sitioning to a long-term strategy for Business Engine That Creates Extraordinary

56 | Research-Technology Management Resources

Value for Both Customers and Shareholders. Charan and Chang, Amazon’s central scattered, fragmented, and analyzed
The authors wrote the book using idea is to “imagine a new customer extensively by data scientists and algo-
mostly publicly available information, experience that could become a very rithms to glean insights. Since all data
including Bezos’ yearly shareholder let- large market space and an enormous belong to Amazon, not to any individ-
ters and interviews with some current economic opportunity, and imagine a ual or any division, the transparency
and former Amazon executives. new way to provide and personalize dismantles silos and enables end-to-
Since Jeff Bezos founded Amazon in this end-to-end experience through end accountability.
his garage in 1994, the company has the use of digital platform and con-
been innovating and disrupting estab- struction of digital infrastructure that Building Block #4: Groundbreaking
lished industries beyond anyone’s imag- processes data via algorithms and invention machine
ination. Amazon generates significant orchestrates physical distribution by
revenues every year while competing parties within the ecosystem.” Charan Amazon’s invention machine is contin-
aggressively and churning out disrup- and Chang discuss Amazon’s business uous. It aims to generate groundbreak-
tive innovations with profound impacts model and underlying logic, and how ing, game-changing, and customer
in online book sales, platforms, logistics, the company executes its business behavior-shaping inventions that create
retailing, cloud storage, entertainment, model by building platforms, ecosys- new market spaces and enormous eco-
and web services. Amazon’s two decades tems, and infrastructure to deliver nomic opportunities.
of phenomenal growth is a result of its more value to its customers than any Amazon has relentless drive to
strict adherence to several guiding of its competitors. invent by daring employees to learn
principles outlined in Bezos’ letters new skills and being bold enough to kill
since 1997, including “14 Leadership Building Block #2: A continuous, its own businesses and fail in a big way.
Principles” and “9-Point Management bar-raising talent pool There’s inherent long-term thinking
and Decision-Making Approach.” that comes from exploring probing
Bezos understood that the internet Amazon carefully defines, meticulously questions: Who are the customers? How
would change customers’ shopping expe- documents, and rigorously chooses its will they use products? What are the
rience. He pioneered digital technologies talent. In addition, the company uses benefits from the customer’s perspec-
so that Amazon could treat each cus- “end-to-end follow through and feed- tive? What are the goals? What are the
tomer individually to take advantage of back to ensure continuous bar-raising hurdles? Amazon is open to ideas from
the internet’s innate advantages such as for the talent pool and for the self-rein- everyone and continuously seeks dis-
unlimited selection, unfiltered customer forcing mechanism of talent acquisi- tinctly differentiated big ideas. The com-
reviews, and ultimate personalization. tions and retention.” The most pany is not afraid of “multi-billion
Amazon has become an indisputable important element of Amazon’s success, dollar” failures and believes “failure and
leader and is the largest bookseller in the the authors contend, lies in hiring the invention are inseparable twins.”
US. The company established an online right talent by setting the bar high. Charan and Chang highlight 18 such
everything store, an unstore-online plat- Amazon defines the right talent based major failed inventions during the last
form that facilitates complex transac- on “builders” who make things happen, 25 years. Amazon encourages failures
tions, an infrastructure business “owners” who never say “that’s not at an early stage and embraces iterations
“Fulfillment by Amazon,” and Amazon my job,” and the “mental toughness” until they get it right.
Web Services (AWS). Amazon has also required to face failures, reinvent,
sold more than 100 million Alexa- relaunch, start over, and repeat again Building Block #5: High-velocity and
enabled devices. Charan and Chang note and again. Charan and Chang argue, high-quality decision-making
that data are the new equity in the digital “Amazon becomes a paradise for ambi-
age—customers’ data and behavioral tious individuals with high standards, a Amazon’s decision-making is high veloc-
analysis can identify new needs and dreamland for builders.” ity and high quality; it follows a set of
insights to create better services and clearly articulated principles and a
experiences for customers. Building Block #3: AI-powered data uniquely designed methodology enforced
Charan and Chang trace Amazon’s and metrics systems with striking consistency throughout the
journey from an online bookseller to an organization.
industry leader by distilling Amazon’s Amazon’s data and metrics system is Amazon’s decision-making mecha-
management system into six interwo- ultra-detailed, cross-silo, cross-layer, nisms are divided into Type 1 and Type
ven and interdependent building blocks. end-to-end, real-time, input oriented, 2. In 2016, Bezos said Type 1 decisions
and AI-powered, so everything can be are “consequential and irreversible––
Building Block #1: A 100 percent tracked, measured, and analyzed in one-way doors” whereas Type 2
customer-obsessed business model real time to detect anomalies. Its sys- decisions are “changeable, reversible—
tem generates insights and automates they’re two-way doors.” Type 1 deci-
Unlike other companies, Amazon is routine decisions. Charan and Chang sions are made methodically and with
obsessed with customers. According to note that in most companies, data are consultation since a mistake could lead

Resources November—December 2020  |  57

to extinction. They’re limited in num- startup, and the continuous upgrade of they should invest time and energy to
ber, and destiny-defining decisions organizational capabilities. Amazon’s verify personally.
with no precedence and historical leaders genuinely believe that the com- Without algorithms and data at the
data; they’re made by finding the truth pany is still at the beginning of its center of their decision-making, the
from a “future-back perspective, growth, not the end. The company is authors argue traditional companies
thinking about how things will change committed to combining the size and cannot compete with today’s digital
going forward.” The Type 1 deci- scale of a big company with the speed giants like Amazon, Microsoft, and
sion-making process beats bureaucracy and agility of a startup. Amazon contin- Google. The authors’ present Amazon’s
and analysis paralysis, and over time ually upgrades its organizational core elements of building blocks in an
improves people’s judgment in deci- capabilities. easy-to-read format. The book is a
sion-making. In Type 2 decisions, Charan and Chang write that Bezos worthwhile read for people working at
where speed matters, the decision asked the head of customer service startups, business owners, front-line
could be digitized based on math-based about customers’ wait time. The exec- managers, senior executives, and CEOs
routines or made by the metrics owner utive replied that it was well under a who want to learn from one of the most
with about 70 percent of the minute without providing any evidence. successful and fascinating companies of
information. Bezos immediately called the 800 num- our time.
ber and tracked the wait time with his Seetharama C. Deevi is a past chair and
Building Block #6: A forever Day-1 watch. His call was picked up after a member of RTM’s Board of Editors. He
company culture 270 seconds. Through this action Bezos consults with diverse global companies on
demonstrated that no customers would innovation and the links between R&D
Amazon is committed to building a for- call Amazon’s call center except for an strategy and business strategy in chemical,
ever Day-1 culture that works to com- unpleasant encounter or a frustrating materials, and manufacturing industries.
bine the size and advantages of a big problem that triggered their call, and He can be reached at 804-496-0747 or
company, the speed and agility of a that no task is beneath an executive, so [email protected].

58 | Research-Technology Management Resources