Why national borders still matter

With KFC selling fried chicken in Tiannemen square and new multinational companies from emerging markets playing a major role in global commerce, the idea of a traditional border is often seen as something as dated as the monarchy. But Pankaj Ghemawat, author of “World 3.0” tells BNN that dismissing borders and local culture is a dangerous misstep.

“The lion’s share of cross-border activity occurs between countries that proximate to each other—geographically, culturally, politically,” he says. “This is very inconsistent with a world view in which borders don’t matter because differences have allegedly been ironed out.”

Pankaj says companies looking to capitalize on the rise of the new middle class in places like India, China and Brazil will have to accept that the world is not flat, as one influential commentator believes.

“Unless they [companies looking to do business in China and India] start off by thinking about what’s going to be very different in these environments and how they’re going to address this in their strategies, they’re likely to be as disappointed as many of their predecessors,” he says.