By Clay Chandler

Clay is an author, editor and fellow at Hult International Business School where he follows technology, economics and global business. He is a former Asia editor at McKinsey & Company, and has held senior editorial roles at Fortune, The Washington Post and the Wall Street Journal. Follow him on Twitter @claychandler

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Suddenly we’re having second thoughts about one of the 21st century’s biggest ideas.

Harvard Business School dean Nitin Nohria, who was born in Rajasthan, remembers that when he began teaching at HBS in 1988, nine out of every ten case studies focused on U.S. companies. “I don’t recall a case about an Indian firm, nor do I remember thinking that unusual,” he wrote in a collection of essays I edited a few years ago. By the time Nohria was named dean, however, more than half of the 250 cases produced by HBS examined non-U.S. examples.

These days, Nohria notes, Harvard expects students to “graduate with a thorough understanding of companies, ways of working, and business opportunities everywhere from India to Brazil, Turkey to Nigeria… If the twentieth century was an American century, the twenty-first century will be the global century.”

For the past two decades, few ideas have gripped the imagination of world business leaders with greater force than globalization.

Goldman Sachs economist Jim O’Neill helped spark the globalization debate with his 2001 report extolling the BRICs (Brazil, Russia, India, and China). In the new century, he suggested, most wealth would be generated in markets we used to think of as poor. New York Times columnist Thomas Friedman took the idea mainstream with his 2005 bestseller, The World is Flat. The opening of emerging markets, together with the collapse of the Berlin Wall and rapid advances in digital technologies, Friedman proclaimed, had spawned a new era in which distance, geography and national borders were obsolete.

In the aftermath of the Global Financial Crisis of 2007-8, investors and business leaders embraced the idea of globalization with new fervor, seeking salvation in the largest of the emerging markets, China and India. McKinsey & Co. heralded “the great rebalancing” of wealth to those two ancient markets as the first of five grand “global forces” redefining the modern age.

And yet, as the rich and powerful descended on Davos this year, the global consensus on globalization was coming unraveled. By almost any measure, emerging markets have had a rotten year. The economies of Brazil and Russia tumbled into chaos; India’s economic reforms fell short of expectations; China posted its worst GDP growth rate in a quarter century. Equity investors, spooked by slowing growth and rising debt in China, pulled a record $105 billion out of global mutual funds in 2015.

So dismal was the performance of the four BRIC economies that, in November, Goldman Sachs closed its vaunted BRICs fund altogether.

At Davos this year, it was hard to know whether delegates saw emerging markets as a remedy for the woeful state of global equity markets or the cause. Many agreed with billionaire George Soros, who singled out China as the “root cause” of global “disequilibrium.”

New Yorker columnist John Cassidy declared: “What was once seen as a historic transformation in emerging economies now looks suspiciously like a global bubble in commodities and credit, which will end the way bubbles usually end: by bursting.”

“What was once seen as a historic transformation in emerging economies now looks suspiciously like a global bubble.” 

That shift in sentiment raises fundamental questions for new graduates just starting their business careers. Business schools have gone to great lengths to recruit more international faculty and students, and have encouraged students to learn foreign languages, travel, and aspire to careers with giant transglobal companies. What to make of those efforts now? Was the idea of globalization all a crazy fantasy?

Certainly not. The idea remains valid and useful, but requires two important caveats.

The first is that the rhetoric about globalization vastly overstated the magnitude of its impact. Pankaj Ghemawat, Professor of Global Strategy at IESE Business School in Barcelona, has railed for years against what he calls “globaloney.” Companies and consumers, he argues, are far less cosmopolitan than we’ve been led to believe. Consider Facebook connections: in the US, Facebook’s largest market, only about 16 percent of users have ‘friends’ outside the US. Or telephone usage, where international calls account for only about two percent of total calling minutes. In commerce, similarly, cross-border trade accounts for about a third of global sales. Much of that is double-counted, while the remainder stays mostly within regional blocs.

As for companies, Ghemawat believes it is virtually impossible to find a large one that is truly “stateless.” He estimates only 14 percent of Fortune 500s CEOs come from a country other than that of corporate headquarters.

The bottom line: the idea of globalization isn’t wrong, but it has been hugely over-hyped. In charting a career strategy, it pays to remember that while national borders may be receding, they still matter – quite a lot.

The second caveat is that terms like ‘globalization’ and ’emerging markets’ are too broad to have much value. Morgan Stanley emerging markets strategist Ruchir Sharma has long argued that the differences between developing economies are more important than their similarities. How can one make meaningful generalizations about the economies of South Korea and South Africa?

That’s not to deny that a lot of developing economies posted impressive growth rates in the century’s first decade. But in hindsight, says Sharma, the simplest explanation is that their performance was the consequence of an ocean of cheap credit.

Sharma reminds readers that only a handful of nations succeeded in truly “breaking out” – making the long-term transition from low-income to high-income economies along the lines of Japan. The vast majority lurch through periods of high growth that give way to elite complacence, policy errors, and a return to stagnation.

One can marshal any number of compelling reasons why China and India won’t flame out like Russia and Brazil. But all have ample problems, and breaking out of what developmental economists call the middle-income trap is a tricky, uncertain thing. Which economies will succeed? The honest answer is that no one really knows.

With those qualifications in mind, this issue takes a closer look at several aspects of planning for a business career in the globalized world. We ponder prospects for Western multinational corporations, which have grown richer and more powerful than ever over the past decades – but may not be as attractive as places to work in years to come. We wonder about the fate of the ‘expat,’ and whether there is still an advantage to being multilingual and acquiring work experience in other countries. We’ve also included: an interview with a savvy globalist from Hult International Business School; a nuts-and-bolts guide to getting work visas in some of the global economy’s most attractive markets; and, just for fun, a quiz to test your knowledge of the nationalities of some of the world’s most famous ‘global’ brands.