From Shanghai to Davos
Author: Admin

Manager's Journal

By Jack Ma (02/20/2001)



The Asian Wall Street Journal

As an entrepreneur from China who founded a business to facilitate global trade, I recently had the opportunity to participate in the World Economic Forum in Davos, Switzerland. I recall thinking it was ironic that entering an event with the stated goal of "improving the state of the world" felt more like entering a prison. Participants were greeted by riot police and armored vehicles, and each night I watched reports of violent clashes outside the conference site.

Just five years ago, to create a global business from an apartment in a small city in China would have been unthinkable. Without the benefits of a globalizing economy and technology, we would have had no chance to compete against dominant players from more developed countries. So it's because of globalization that in the two years since Alibaba.com was founded the company has grown its business-to-business marketplace to include more than 500,000 importers and exporters from more than 200 countries.

Establishing a company like Alibaba.com before China opened its doors to global trade might have once seemed like the riskiest of ventures. But, in fact, high tech companies like ours are springing up all over China, invigorating local economies, creating jobs and bringing skills to workers in all regions.

It used to be that globalization brought a disproportionate amount of benefits to the big and strong. But technology has changed that. Internet and telecommunications advancements are redistributing power and bringing economic benefits deep into developing countries at the grassroots level. The experience of Alibaba.com's members is proving that this is not just a nice-sounding economic theory. This is the new reality.

For example, our 500,000 members are mostly from small- and medium-sized companies in developing countries around the world. They are located in rural areas, as well as large cities, in countries such as Kyrgyzstan, Sierra Leone and Brazil. For the most part, these are not "high-tech companies." They are low-tech companies using technology to expand their market reach and grow their businesses. Before the Internet, global trade was limited to those companies who could afford to attend expensive trade shows and publish expensive brochures. Now we are consistently hearing from our members how the Internet has provided a cost-effective way to compete with larger companies.

We recently learned of an inspiring story from the township of Quzhou, one of the poorest areas in China's Zhejiang province and a place where farming is still the dominant way of life. Seeking to promote enterprise, the local government piloted an e-commerce initiative. Although farmers in the area didn't have Internet connection and did not know how to use computers, the local government established an Internet center in every big town to help farmers post trade offers on sites such as ours.

Individuals and governments have criticized globalization on several fronts. Some would like to protect local industries. Some fear exploitation of workers abroad. Some fear environmental harm. While some of these fears are valid, the problem is not globalization itself. The real issue is how we should properly participate in the processes of globalization. We need to insure that workers' rights are protected and the environment is preserved. We need to insure that the benefits of technology are made accessible to all. But we should not close the door on global trade.

Most visitors to China today cannot believe how different the China they see is from the China they imagined. Global trade has resulted in rapid modernization and the emergence of a large and growing middle class with access to educational and economic opportunities they had never thought possible in their lifetime. There have been bumps along the way, but most Chinese and observers agree that opening China's doors to the global economy has brought incredible benefits to a majority of China's population. Most of China's companies are preparing for the World Trade Organization with a sense of optimism. While aware of the risks, they are preparing for the challenge with the understanding that in the long run China's entry will benefit consumers, workers, importers and exporters.

I had a great experience at the World Economic Forum and appreciated the chance to meet business, government and community leaders from around the world. Participants were from developing and developed countries, and of varying ages and socioeconomic backgrounds. My experience was that most of them were at Davos for the same reason I was: to share ideas and learn from each other. For me, the exchanges were invaluable; I returned to China with a better idea of how Alibaba.com can serve its members and their communities.

I sincerely believe that most of the protesters at Davos, Seattle and elsewhere have good intentions. But to argue that globalization is the root of the world's problems does more harm than good to people in developing countries. Indeed, history has proven that economies closed to world trade are usually the least developed. And if anything, globalization means bringing the world's economies closer together in a responsible way that ultimately benefits people.

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