‘Local for global’ is becoming a powerful slogan, more since the pandemic struck. What actions on the ground would it take to make this work?

The recent migrant labour crisis in India during the pandemic has brought to the forefront the urgent need for innovative economic solutions without displacing people en masse from their native regions. Migrant labourers are usually the most marginalised, and hence, the most vulnerable of low-income groups. It is estimated that the migrant labour workforce in India alone is over 100 million.

Therefore, ‘Local for Global’ is a powerful and timely war cry. But what will it take to make this work? What will it take to translate this mantra into business reality? And, is it even possible?

There are broadly two aspects that need to come together:

Unlocking and directing relevant remote market demands that leads to employment and income generation locally.

Factors that improve global economic competitiveness of small producers, artisans and farmers to power this flywheel.

There are multiple macro trends that are prevalent and can be harnessed on both the demand and supply side. McKinsey’s recent prediction of the eight forces that will shape the future speaks about some of these: acceleration of digitisation, greater balance between social and economic goals, increased government action for engagement, shifting geopolitics and push for a green recovery.

Let us explore some of the actionables:

Digital discovery & collaboration: There has been much progress in technology and global supply chains lately. Local producers, home-based artisans and small factories and workshops located across small towns in India can be digitally connected and enabled to do business with boutique owners, retailers and wholesale buyers in London, Melbourne, Toronto, or anywhere in the world via enabling platforms and digital intermediaries like Qalara, Amazon, GlobalSources, Etsy, Facebook and other global platforms. The omnipresent smartphone camera–getting increasingly powerful with every new version—enables us to visually communicate with ease. Accessible technology like Whatsapp with Google Translate helps overcome both telecommunication costs and language barriers, enabling us to collaborate with people around the world seamlessly. Leading trade fairs around the world—for the first time ever—have gone digital, heralding a new era of digital discovery and collaboration like never before.

Leveraging open source data: A combination of Google Trends, Pinterest Trends and other open source tools enable us to mine data to understand what categories, styles, materials, products and prices are trending across which geographies. That has and will increasingly lead to bridging the information gap between producers, retailers and end consumers across borders, and thus a shorter value chain, enabling both producers and retailers to buy and sell more effectively. Powered with a better understanding of consumers, local producers can better mould and adapt their skills to develop marketable products, anywhere in the world. With available quality, price and marketing benchmarks, we can now innovate to strike the right commercial balance.

Values based positioning: A sub-trend augmenting the broader opportunity is the convergence of lifestyle and values across the world. A shared progression towards more eco-friendly choices, governmental policies around the world discouraging the use of plastics, regulations discouraging unhealthy choices, and information on supply chain exploitation leading to consumer demand for greater transparency are leading to a universality of product values that are core to many local artisanal practices. Be it the use of natural fibres and materials, natural dyes, energy efficient means or slow fashion, artisanal production is better placed today than ever before. One can benchmark leading global and a growing range of Indian brands on brand identity, packaging and presentation, and associate with global marks and certifications, to authentically convey the unique value of these products and invoke trust and quality, and hence demand.

Local plug-and-play supply chain services: Ecosystems at a local level that enable access to supply chain services and lower cost of doing business are integral to the competitiveness of local, artisanal production. Rapidly maturing domestic e-commerce and digital industries in India and especially, the growth of e-commerce marketplaces, is driving the growth and proliferation (and increasing affordability) of digital services—be it cataloguing, packaging, quality and compliance, logistics, and even digital marketing, online infrastructure, and more—at the local level. An increasing array of business-to-business (B2B) technology solutions, including those for product design and manufacturing processes, will become more affordable, relevant and forward integrated over the next few years. Enhancing these services to enable cross-border commerce is the next big opportunity.

On-demand production: While counter intuitive to the era of instant gratification, focusing on wholesale, which is usually a more planned purchase with just-in-time turnaround for low to mid volume handmade production, is a unique opportunity to make local economies and small businesses more capital efficient. This could be pivotal to sustainable value chains, both upstream and downstream.

Cross-border payments and financing solutions: While domestic payments have seen significant digitisation over the last few years, we are slowly but surely beginning to see entry of solutions enabling simplified cross-border payments from global companies like Payoneer, Paypal and Indian players as well. Further, there is an emerging ecosystem of collateral-free financing solutions based on factoring being offered by various Indian and overseas players. While cost remains a concern, I am hopeful that growing trade and innovation will drive reduced cost of these services.

While challenges remain, particularly in areas like international freight in current times, production management capabilities, quality raw material distribution, the demand-side potential for cross-border commerce in context of ‘Local for Global’ has only accelerated amidst the pandemic. It is an unprecedented opportunity to design and incentivise infrastructure, policies, investments and new technology-enabled businesses across each of the above-mentioned areas to build and strengthen local economic competitiveness for global trade.