1.1. Globalisation

The world of business has undergone significant changes in recent years. Kotabe and Helsen (2017, p. v–vi) explain 4 more than extraordinary changes. First of all, the landscape of the global economy has changed drastically, the main reasons being the global financial crisis and the ensuing lackluster global market environment. Secondly, the growth of information technology tools, including the Internet and e-commerce, has had significant influence on the way we do business internationally. Thirdly, there is always a desire to be different when there are economic and political forces of convergence (often referred to as globalisation). From the supply-side, globalisation has brought us more products from all corners of the world. However, from the demand-side (marketing-perspective), customers have a much broader set of goods and services to choose from. Fourth of all, if not last, we have become increasingly aware of the various consequences of corporate action, from environmental pollution to global warming with rising sea levels around the world, and from food safety to unsafe work environments around the world (Gálová & Horská, 2013). Many other authors (e.g. Beck, 2004; Ghemawat, 2007; Goldin and Reinert, 2007; Hennis, 2005; Hollensen, 2017; Paul & Kapoor, 2008; Svatoš, Smutka, & Rosochatecká, 2011) deal with the topic of globalisation and internationalisation. Globalisation, in comparison to internationalisation, is much younger as a concept. At a macroeconomic level, globalisation is treated as the phenomenon of increasing globally diverse ties between economies, following the increasing size and diversity of transactions regarding goods, services and international financial flows, as well as technology transfers as a result (Daszkiewicz & Wach, 2012, p. 8). Globalisation can be seen as a summary of changes from 3 global aspects: culture, economics and environment. It can be described as deepening the relationship and broadening interdependence among people from different parts of the world, and especially among different countries (Daniels, Radebaugh, & Sullivan, 2017). Globalisation reflects the trend of firms buying, selling and distributing products and services in most countries and regions of the world (Hollensen, 2017). Thanks to market globalisation, we have become more receptive to new things, while we also have a much wider, more divergent “choice set” of goods and services to choose from, which shape our own individual preferences and lifestyles (Kotabe & Helsen, 2017, p. 11). Nonetheless, from a marketing point of view, it is becoming more difficult—not easier—to pinpoint consumer preferences in any local market around the world, the more globalised the markets become (Nowak & Kochkova, 2011). There are 4 major categories of potential globalisation benefits: cost reduction, improved quality of products and programmes, enhanced customer preference, and increased competitive advantage on a global basis (Kotabe & Helsen, 2017). Sethna (2008) reviews 2 books by the authors Pankaj Ghemawat and Thomas Friedman, offering differing opinions about whether the world is flat—in terms of influences which have flattened (or levelled) international business conditions. Friedman (2007) believes that technological innovation has removed many of the barriers that limited lots of businesses to a local playing field. But Ghemawat (2007) argues that the differences between countries are still significant. The right business strategy is neither local customisation nor global standardisation, or the one that proposes a compromise between those 2 extremes. Instead, he believes that companies must compete in an integrated way. These 2 publications are recommended readings for those who are interested in learning more about rather opposing viewpoints on globalisation in business. For 3 main reasons, national markets continue to exist while being part and giving way to the extending global market. The first explanation is innovation of technologies, which enabled declining prices for transportation and telecommunication services substantially; therefore, companies have the possibility to minimise production costs by moving some of these activities overseas. Secondly, globalisation is supported by international trade liberalisation, where the reduction of tariffs contributes to the growth of trade and investment. Thirdly, the continuous change and development provided additional incentives for global integration. Certainly, there are other various reasons for going global, such as avoiding dependence on the domestic market and economies of scale (Czinkota & Ronkainen, 2012, p. 4). 1.2. Climate changes In 2010, the World Business Council for Sustainable Development (WBCSD) launched Vision 2050, a landmark study that laid out a pathway to a world in which 9 billion people will able to live well within the boundaries of the planet by mid-century (WBCSD, 2020). Created with 29 WBCSD members from 14 industries, and including insights from more than 200 companies and external stakeholders in some 20 countries, it was declared that doing business as usual was not sustainable (WBCSD, 2010). Although many of the concepts at the core of Vision 2050 have largely outstood the test of time, inevitably, a number of topics have either increased in importance or emerged as critical new areas within the sustainable development landscape and beyond. Furthermore, the world in which businesses are operating continues to change: social tension and environmental impact are on the rise, fundamental questions are being asked about the role of business, and the economy as a whole, while the COVID-19 pandemic has brought a level of global disruption unprecedented in modern times—hence the WBCSD’s Vision 2050 Refresh project was introduced.

Figure 1. Sustainable Development Goals Source: (UN 2020b).

The Sustainable Development Goals (Figure 1) are a universal call for action by the United Nations (2020c) to end poverty, protect the planet and improve the lives and prospects of everyone and everywhere. The 17 Goals (Figure 2) were adopted by all UN Member States in 2015 as part of the 2030 Agenda for Sustainable De-

velopment, which set out a 15-year plan to achieve these Goals.

Within the aforementioned 17 Goals, Goal 13 aims at tackling climate change and calls for urgent action to combat climate change and its effects. It is intrinsically linked to all the other 16 Goals. To address climate change, countries adopted the Paris Agreement to limit global temperature rises to well below 2 degrees Celsius (UN, 2020a).

The statistics are alarming. 2019 was the second warmest year on record and the end of the warmest decade (2010–2019) ever recorded (UN News, 2020b). Carbon dioxide levels and other greenhouse gases in the atmosphere also rose to new records in 2019 (UN News, 2020a). Although these emissions are projected to drop by about 6% in 2020 due to travel bans and economic slowdowns resulting from the COVID-19 pandemic, this is only temporary. Once the global economy begins to recover from the pandemic, emissions are expected to return to higher levels.

Figure 2. Sustainable Development Goals—overview Source: (UN 2020d).

The Paris Agreement (UNFCCC, 2020) adopted in 2015 is aimed at strengthening the global response to the threat of climate change by keeping a global temperature rise in this century well below 2 degrees Celsius above pre-industrial levels. The agreement is also aimed to strengthen the ability of countries in dealing with the impact of climate change, through appropriate financial flows, a new technology framework and an enhanced capacity building framework.

1.3. Poverty vs. unlimited consumption

The World Bank (2020d) publishes the revised classification of world economies annually, based on the income classifications by GNI per capita shown in Table 1.

Economies are currently divided into 4 income groupings: low, lower-middle, upper-middle and high (World Bank, 2020a). Income is measured using gross national income (GNI) per capita, in U.S. dollars, converted from local currency using the World Bank Atlas method. Estimates of GNI are obtained from economists in World Bank country units; and the size of the population is estimated by World Bank demographers from a variety of sources, including the UN’s biennial World Population Prospects.

Countries are immediately reassigned on July 1st each year, based on the estimate of their GNI per capita for the previous calendar year. Income groupings remain fixed for the entire fiscal year (i.e., until July 1st of the following year), even if GNI per capita estimates are revised in the meantime.

The World Bank (2020b) states that global extreme poverty is expected to rise in

2020 for the first time in over 20 years as the disruption of the COVID-19 pandemic compounds the forces of conflict and climate change, which were already slowing poverty reduction progress. The global extreme poverty rate fell to 9.2 percent in 2017, which is equivalent to 689 million people living on less than $1.90 a day. But many people who had barely escaped extreme poverty could be forced back into it by the convergence of COVID-19, conflict, and climate change. By most estimates for 2020, incorporating the effects of the COVID-19 pandemic it is projected that an additional 88 million to 115 million people will be pushed into extreme poverty, bringing the total to between 703 and 729 million.

Khan (2008) reports that poverty, environment and growth are in the centre of interest not only for politicians, but also academics and other scientific researchers. Erokhin and Ivolga (2012) claim that international trade can bring significant benefits to countries. It provides a scope for enormous and sustainable gains in economic growth and poverty reduction that is especially significant for developing countries.

Broussard and Joseph (2009) recognise 2 common poverty measures: absolute and relative. The first one, absolute poverty, refers to the minimum amount of money needed to meet basic human needs (food, shelter, clothing), while relative poverty is based on comparison to other members of the society where people live–where household income is a certain percentage below median incomes.

In January 2002, Prahalad and Hart urged leaders to imagine the world’s 4 billion poorest people as potential consumers—and described precisely how they could engage them profitably (Prahalad & Hart, 2002). This challenged many longheld assumptions about the role of both government and business in addressing poverty. The article was followed by the best-selling 2004 book “The Fortune at the Bottom of the Pyramid”. In 2019, Deepa Prahalad updated a portion of the argument in strategy + business (Prahalad, 2019). She presents some interesting statistics as well. In 2017, there were fewer people at the bottom of the pyramid (3.5 billion, compared to 4 billion in 2002). Income tiers had also risen so significantly by 2017 that it is now difficult to directly compare them. By 2017, there was a new concentration of wealth at the top.

The Credit Suisse Global Wealth Report (Credit Suisse Research Institute, 2020) for 2020 shows that the bottom 90% of countries accounts for 19% of global wealth, compared to 11% in the year 2000. In the same report, it has been reported that household wealth is very unevenly distributed—geographical imbalance is evident in the fact that at the end of 2019, North America and Europe accounted for 55% of total global wealth, but only 17% of the world adult population. In contrast, the population share was thrice times the wealth share in Latin America, 4 times that in India, and nearly 10 times the wealth share in Africa.

Based on data from Forbes and the annual Credit Suisse Global Wealth databook, Oxfam (Hope, 2018) reports that some 82% of the money generated in 2017 went to the richest 1% of the global population, while the poorest half saw no increase at all. Furthermore, with regard to this report, Prahalad (2019) highlights that 42 individuals now possess the same cumulative wealth as the bottom 3.6 billion people on the planet.

The World Poverty Clock by the World Data Lab (2020) provides real-time poverty estimates up to 2030 for nearly every country in the world. It monitors progress against Ending Extreme Poverty, which is the UN’s first Sustainable Development Goal (SDG). The escape rate allows to calculate the current rate of poverty reduction in the world. The methodology for this tool has been peer-reviewed in the academic community and published on the Nature website (in Cuaresma et al., 2018). It shows that in India, approximately 18 people per minute overcome extreme poverty, in Brazil the number totals 66, while in most African countries the escape rate is negative–poverty is rising.

The World Economic Forum (WEF, 2019) report points out that in developing and emerging economies, growth has been accompanied by a significant increase in inequality—despite pulling millions out of poverty and reducing the gap with advanced economies. From business and marketing perspectives, apart from the traditional marketing concept of the 4Ps—Product, Price, Place, Promotion—2 of the most prominent alternative paradigms existing in literature on marketing is that of the 4Cs—Customer value, Customer costs, Customer convenience and Customer communication (Kotler, 2009), and the 4As—Awareness, Availability, Affordability and Acceptability. This concept of the 4As is more tailored to rural consumers, and applicable to the least developed countries (Hollis, 2010). Concerns about the framework and responses to them as well as the concept itself is further explained by several authors (e.g. Balram & Ghuman, 2010; Choudhary, 2012; Dodd, 2015; Sheth & Sisodia, 2012).

1.4. Limited exhausted access to resources

Within the aforementioned 17 Sustainable Development Goals by the United Nations, Goal 12 directs attention towards ensuring sustainable consumption and production patterns since these rest on the use of the natural environment and resources in a way that continues to have destructive impact on the planet.

Each year, an estimated 1/3 of all food produced—equivalent to 1.3 billion tons worth around $1 trillion—ends up rotting in the bins of consumers and retailers, or spoiling due to poor transportation and harvesting practices (FAO, 2020; UNEP, 2020).

If the global population reaches 9.7 billion by 2050 (UN, 2019), the equivalent of almost 3 planets could be required to provide the natural resources needed to sustain current lifestyles.

According to the WWF (2020), some 1.1 billion people worldwide lack access to water, and a total of 2.7 billion find water scarce for at least 1 month of the year. Inadequate sanitation is also a problem for 2.4 billion people—they are exposed to diseases, such as cholera or typhoid fever, and other water-borne illnesses.

These were only a few examples, more information can be found about facts and figures, data and statistics with regard to this topic (including water, energy and food resources) in the publications of the UN and the UN environment programme.

The COVID-19 pandemic offers countries an opportunity to build recovery plans that will reverse current trends and change our consumption as well as production patterns towards a more sustainable future.

Questions / tasks

1. Define globalisation.

2. Discuss the advantages and disadvantages, strengths and weaknesses of the globalisation.

3. Read about WBCSD’s Vision 2050 Refresh.

4. Learn more on how to Take Action for the Sustainable Development Goals.

5. Take a look at the overview of the 17 goals from the Sustainable Development Goals Report 2020.

6. Discuss the Paris Agreement.

7. Learn more about the World Bank Atlas method and the historical classifications by income.

8. Take the World Bank’s poverty quiz and see How much you know about global poverty.

9. Recommended reading includes information on absolute and relative poverty measurements: Poverty and shared prosperity 2020: Reversals of fortune by the World Bank (2020c).

10. Read the following articles: Prahalad, D., & Hart, S. L. (2002). The fortune at the bottom of the pyramid and Prahalad, D. (2019). The new fortune at the bottom of the pyramid. At that time, the thinking of Prahalad and Hart had been rejected for 4 years by scholarly journals. What do you think about their original, simple but radical idea?

11. The COVID-1 9 pandemic has triggered the worst global economic crisis since World War 2 and affected human life in countless ways. Learn more from the interim edition of the Global Wealth Report 2020 in which the impact of the outbreak on wealth and wealth distribution are examined.

12. Take a look at the World Poverty Clock map.

13. Learn more about the topic from the Global Competitiveness Report by the World Economic Forum.

14. Look at the Sustainable Development Goals infographic: No poverty.

15. Read about the Vision towards a responsible future of consumption: Collaborative action framework for consumer industries by the World Economic Forum (WEF).

References

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Beck, U. (2004). Čo je globalizácia? Bratislava: Vydavateľstvo Spolku slovenských spisovateľov.

Broussard, C. A., & Joseph, A. L. C. (2009). Introduction—the poverty context. In C. A. Broussard, & A. L. C. Joseph (Eds.), Family poverty in diverse contexts (pp. 1-8). New York: Routledge.

Choudhary, V. (2012). Marketing mix from 4P’s to 4A’s. Retrieved September, 2020 from http://www. mbaskool.com/business-articles/marketing/5455-marketing-mix-from-4ps-to-4as.html

Credit Suisse Research Institute (2020). The global wealth report 2020. Retrieved September, 2020 from https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html

Cuaresma, J. C., Fengler, W., Kharas, H., Bekhtiar, K., Brottrager, M., & Hofer, M. (2018). Will the

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