What Is the Future of Globalization?

By Jonas Ryberg Chief Globalization Officer
London skyline

Globalization is alive and well. And it is becoming more multi-cultural and digital. That was one of the major take-aways from the annual meeting of the World Economic Forum known as Davos.

In two different sessions, thought leaders assessed the state of globalization during a time of tumult and disruption caused by the pandemic, an ongoing supply chain crisis, and the war in Ukraine.

In the session “The Future of Globalization,” Loic Tassel, president of Procter & Gamble’s European operations, asserted that globalization is not only vital but is also important. He said, “If you are buying our products, you are part of a global community. Globalization is a great thing. It connects 5 billion consumers to get access to high-quality, trustworthy, innovative products that they could not have had otherwise. Leaders need to make sure globalization progresses. It is in the core interest of consumers.”

But he acknowledged that getting products to those consumers on a global stage is getting more complicated. Businesses will need to rethink, for instance, their reliance on a global supply chain whose fragility has been exposed. An interruption to supply chains in China can disrupt economies across the world. Businesses may operate globally, but they’ll need to adapt regionally with more nimble supply chains that source and deliver products locally.

Pamela Coke-Hamilton, executive director at the International Trade Centre, stressed that statistically speaking, globalization is holding its own. She noted that the global trade of goods has reached a record level $28.5 trillion in 2021 despite shocks to global economies caused by the pandemic and the supply chain crisis. She also pointed out that the percentage of trade as a percentage of global gross domestic product has remained stable since 2016.

But she said the nature of globalization is changing. The digital economy is changing the way goods and services are developed and delivered in industries ranging from tourism to higher education to healthcare. For example, because people can work more remotely, they can travel anywhere while they do their jobs, which will have a long-term effect of globalizing the travel industry especially as restrictions are lifted in a post-pandemic age. And online delivery of higher education happens anywhere now, connecting students conceivably from all over the world.

Tarek Sultan, vice president, Agility, added that globalization is becoming more multicultural especially as a middle class emerges around the world. This will happen with the help of digital. He said that in Indonesia, 90 million people still lack access to bank accounts, but the uptake of digital banking apps will change that situation, adding 90 million more people to the economy – which will make it possible for Indonesia to participate more actively in the global economy. And emerging markets are accounting for a greater share of global trade. As those markets assert more influence, their coalescing middle classes will also make them more active participants.

In a separate session, Thomas L. Friedman, author of The World Is Flat, noted that globalization has gotten stronger despite occasional threats such as the rise of terrorism, recessionary conditions, and the current war in Ukraine. But the rise of digital keeps connecting societies even amid these threats. “People want to connect,” he said. “The world is not flat. It’s spiky, it’s curvy, it’s bumpy.”

Our Take

Globalization remains vital. The next great challenge for businesses is to be more responsive to its multicultural nature. For instance, they need to better understand the nuances of doing business in different regional cultures and adapt to them rather than the other way around. And the good news is that people will respond when they do.

Pactera EDGE partnered with Nimdzi Insights to research the role of digital technologies such as artificial intelligence (AI) in meeting the needs of people around the world. For example, we found that:

  • 44% of Indian users surveyed believe they are very likely to purchase a product based on recommendations by their preferred shopping website/platform.
  • 86% of Chinese users surveyed claim they prefer to see personalized search recommendations.
  • Tellingly, 9 out of 10 people will ignore a product if it’s not in their native language.

When you consider these data points together with the rise of a middle class around the world, the message to businesses is clear: they need to connect with people in context of their own cultures if they wish to operate globally. And indeed, more businesses are trying to operate globally. 46 percent of the top 50 websites offer more than four language choices to their overall audience to enable a localized and native experience.

But adapting to the needs of local markets is enormously challenging, and the issue goes beyond language translation. A voice-based product, e-commerce site, or streaming service must understand the differences between Canadian French and French for France; or that in China, red is considered to be an attractive color because it symbolizes good luck. 

So, how can businesses become more responsive? We believe AI can help – if it’s applied correctly in context of local cultures. We call this AI localization.

The Role of AI Localization

AI localization is about creating lovable experiences for your customers around the world through AI-based products that are authentic to their local cultures. AI localization is especially important as more businesses incorporate AI into their products and services. (To wit: 80 percent of marketers in 2020 already had chatbots as part of their customer experience strategy.) As the thought leaders at Davos pointed out, the digital world knows no boundaries. Digital creates new opportunities but also challenges as companies adapt AI-based products and services locally.

AI localization is connected to personalization, the holy grail for businesses ranging from retailers to multimedia streaming services. AI is the most effective way to quickly achieve personalization at scale from one country to another – and continuously. For example, as our research pointed out, Spotify offers a global service by making itself available to 80 markets, and in some 36 new languages. Spotify uses AI to create customized music playlists based on your listening experience. Those playlists differ by global location. Spotify is another example of localizing content and an experience beyond translating language. If you want to present a list of products that will resonate with someone in Germany, that list should be different from a list you present to people in Sweden, India, or the United States. Localizing the product recommendation has little to do with language.

Such personalization can only be achieved when the underlying AI model is trained on the nuances of local cultures including market-specific music preferences and spoken languages.

Generic, non-localized AI-powered products and services don’t know these things unless people train them using fair, unbiased, and locally relevant data. And enterprise-level AI engines require training data on a far greater scale. (For example, for one of our clients, Pactera EDGE delivered over 80 million localized data units within eight weeks.) Consequently, more people are needed to train AI to deliver better results.

The payoff for AI localization is enormous: according to the research released by Pactera EDGE and Nimdzi Insights in 2020, companies that localize the user experience see a 100-percent-to-400-percent increase in sales, and by localizing into just 10 languages, a brand’s message will effectively reach 90 percent of online customers.

Success Factors for AI Localization

  • Design with people at the center. It is extremely important to design AI with humans at the center with a global perspective. Don’t let people be an afterthought. Don’t make AI localization an add-on.
  • Keep humans in the loop. Have humans in the loop through the entire design process for AI to be lovable. You need to have humans in the loop to provide the right data for each culture and each type of user.
  • Be inclusive. If you start with designing AI with people at the center, you have a good sense of who will be using the AI product. From there, you must ensure that the data sets you use to train AI also correspond to user groups. You cannot use a generic persona to meet the needs of those user groups.  You need data sets that do not have bias; that cover all ethnicities, genders, ages, communities, nationalities, and so on.  And that should be tracked and tested with metrics to ensure bias is not introduced.
  • Unlock the power of partnerships. No single company can master AI localization by itself. This process requires an ecosystem of experts who possess the scale, reach, technology, and expertise – and, importantly, a partner who understands how to reduce and even eliminate bias in AI. For example, AI localization requires the right technology to collect and curate hundreds of thousands of data assets; and a framework to manage accuracy and quality.

How Pactera EDGE Can Help

At Pactera EDGE, we provide AI localization services to clients around the world by combining our OneForma platform with a global talent pool who possesses in-market subject matter expertise, mastery of 200+ languages, and insight into local forms of expressions, such as emoji on different social apps. We collect and localize billions of data units across a wide range of domains every year, enabling multilingual virtual personal assistants, locale-relevant search engines, enterprise-grade and machine translation engines, and automated image, text, and speech recognition solutions. 

We provide AI localization services to the world’s largest corporations. We understand our clients’ needs and expectations and offer mindful and secure custom AI data solutions at scale. To learn how we can help you, contact us.

Photo by Fas Khan on Unsplash