Globalization can't be stopped, but it can be shaped

Michael Maibach, a vice president of government affairs at the computer chip giant Intel Corp., was in town this week for a whirlwind tour of Pittsburgh's universities and high-tech centers. He was brought in by the World Affairs Council of Pittsburgh to give two talks about globalization and the Internet. I talked to him by phone on Wednesday.

Q: Isn't globalization just a new name for free trade•

A: No. Globalization is really much bigger than trade. It's political, cultural, economic - informational, if you will.

Globalization means that one person with a Web site is now a multinational corporation. It means that every book printed can be accessed or will be accessed at some point, to anybody, anywhere.

It means you can live in India and work for a Brazilian company off a server in England. It means you can live in Singapore and you can get a degree from UCLA through the Internet. It means you can live in Bangladesh and have your blood checked through digital technology by a doctor in New York City.

Q: What's making globalization happen•

A: Technology.

Q: It's not because of some grand conspiracy of international bankers and multinational corporations•

A: There are two major forces of change in the world: war and technology. And technology in peacetime is what changes everything.

The way to think about it is, the world of computers used to be mainframes - top-down silos. If you bought an IBM mainframe and you wanted to buy another, you had to buy another IBM because they weren't compatible. They were the 'silo architecture.'

Now, think of the nation-state in the same way - these are our borders, we control everything inside the silo.

The personal computer came along in 1983 and it was a horizontal structure. You could buy different processors, different devices - so Gateway talks to an Apple talks to an IBM, etc. And you can add different operating systems and different content and different applications from different companies.

What that did was open up computing to the masses. In the old days of mainframes, everyone who ran a computer wore a white jacket and was in an air-conditioned glass room. Now last Christmas for your 8-year-old you bought the equivalent of a Cray supercomputer that you put on their lap.

What we've had is a computer revolution where a transistor today is the cost of a grain of rice. When you have free computer power, or virtually free, and you tie that in with the phone and cable and fiber-optics lines, we have connected computing around the world.

What that technology does is cut across national boundaries, just like the mainframe got cut into by the personal-computer revolution. The story is, governments are losing their control over some parts of society.

Q: Who are the enemies of globalization•

A: By and large, people who don't like change and people who don't like growth - the no-growthers.

Those people see the growth of capitalism around the world and the development of markets and consumption and population growth as the enemy of happiness and all that is good, even though none of them want to go back to the farm without electricity.

Labor unions fear globalization, because they say, 'Oh gee, I gotta compete with somebody making 50 cents an hour.' As if there was no such thing as productivity. If it was just the hourly rate, everyone would be moving their plants to Haiti, but they're not.

Q: Globalization is good for the United States•

A: Yes.

Q: What are the downsides for the United States•

A: Well, all technology and all change has negatives and positives. There'll be negatives to the Internet - the 'I love you' virus that destroys the memory of your computer. Or the loss of privacy. Or the Pentagon being broken into, not by a burglar but by somebody pinging it with a computer. But by and large, it's going to be good for America and the good news is America is in the lead around the world in using these technologies.

Q: What is going to be good about globalization for Pittsburgh•

A: Well, you've got great universities and so you can export education. You can not only teach the kids on the ground here, you can teach people around the world and export that. You have great research hospitals and doctors and you can export medicine. You can raise venture capital from anywhere in the world for good ideas.

Q: But there are still people in Pittsburgh that look at globalization as just something else that has come along to take our good jobs away. We're losing more jobs to Mexico than we used to.

A: Well, those are the people who don't embrace change. When I got to Intel in 1983, it had 10,000 employees. Today it has 85,000, including 55,000 in the United States. So Intel has grown about 45,000 jobs in the United States in 17 years. More people make semiconductors in the United States than steel by a factor of two.

The point is not that there aren't jobs. The jobs are different. So, yes, if globalization means my spouse, who works at U.S. Steel, loses her job, I don't like globalization. But if it means my husband who is laid off can start his own business with his own Web site or go to work for IBM or Cisco, then it's good.

And what's the bridge between the Steel Age and the Information Age• It's called education. People have to understand that lifelong learning will now be a way of life.

Q: I saw a news item the other day that Proctor & Gamble's stock fell $5 because there were problems with the Turkish currency. Is this kind of interdependence really that good•

A: It's kind of like, I own Intel stock and when it's up I'm happy and when it isn't I'm sad. What it sounds like, Proctor & Gamble has an investment and a market in Turkey and when their investment is imperiled by a currency fluctuations, then people say, 'Hey, part of that company is in trouble.'

But what's the alternative• There's no turning back and so, yes, the world will be more interdependent, which means were going to have a lot more opportunity, a lot more wealth created around the world. The spread of democracy with capitalism.

My company, Intel, has a policy we call 'copy exactly.' Every time we build a plant anywhere in the world, it's identical - in terms of the treatment of waste, environmental protection, how we treat people. Everybody at Intel in every country gets stock options - every secretary in China, Costa Rica.

Q: So you're bringing high American standards for everything to these backwater countries•

A: We're lifting their game. And that's the interesting thing about (the demonstrations against the World Trade Organization in) Seattle: Here these rioters were saying we don't want globalization, even though we have these multinational corporations that build according to the American regulation of the environment and protecting people's rights as employees and that sort of thing.

We're exporting that and don't we want to export more of that• All of our employees in these countries have health care benefits. We have 55,000 U.S. employees. Sixty percent of their jobs are dependent on exports. If we closed down world trade today, we'd lay off more than half of our workforce.

Q: Can any thing or anyone stop globalization, either here or elsewhere•

A: You don't stop it, you shape it. Good policies, smart policies, good people involved. Wise government action. Corporate citizenship of the highest order, etc. We'll all muddle through pretty well, I think.

Maibach's interview with World Affairs Council of Pittsburgh President Schuyler Foerster will be broadcast on KQV (1410 AM) on Sunday at 10:30 a.m.

Bill Steigerwald is the Trib's associate editor. Call him at 412-320-7983. E-mail him at: bsteigerwald@tribweb.com