Home is not a place, but a feeling, sang rock legend Herbert Grönemeyer in the late 1990s. At the time, that was also in line with the spirit of the times in business: You could be at home in the world.
The label “global” was even considered particularly valuable in the corporate world: locations and sales markets in different countries, global supply chains, shareholders and top managers from all over the world – it couldn’t be global enough. Home as a place, on the other hand, sounded provincial, from the day before yesterday was “out”.
In times of increasing economic nationalism, home is a place again – and therefore a problem for managers. According to a “global” study by market researchers from Weber Shandwick and KRC Research, 93 percent of executives in Germany, Sweden and Great Britain believe that multinational companies should take the interests of their home country into account when making decisions.
Half of the German executives even consider their home country a “very important stakeholder”, right after the customers and before the shareholders. In nine of the twelve markets examined, all managers consider their home country to be among the top three interest groups to which they are committed.
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However, the rediscovered love of home is not entirely voluntary. As the recently announced withdrawal of the Chinese transport service Didi from the New York Stock Exchange and the plans for a listing in Hong Kong show, political pressure often ensures that companies stay down to earth. When nations strive for “strategic autonomy”, decouple themselves from political system rivals and bring previously global supply chains “home”, companies and managers can hardly escape the primacy of geoeconomics.
National awareness has always played an important role when it comes to relocating or investing abroad. In 2005, at the time of hyperglobalization, the Ifo Institute in Munich asked: “Are German companies turning their backs on their homeland?” At that time it was mostly about jobs and tax revenues, today it is about national security, sovereignty and geopolitical power.
Politically, this new mutant of economic nationalism has spread almost as quickly as the coronavirus: In Washington it is called “Buy American”, in Beijing “Made in China 2025” and in Brussels “strategic autonomy”.
The result is the same everywhere: The US is pushing its chipmakers to build the next factory at home. China is bringing its high-tech stars back home – see Didi. And the EU wants to give the technology sector a boost with industrial policy guidelines.
Executives have to show their colors politically
Managers have to adjust to this and find a new balance between the efficiency of the global division of labor and the political constraints of their home countries. The fact that the pandemic has also made the risks of global supply chains a business issue makes this adjustment easier. Instead of “just in time”, many companies today prefer to work according to the motto “just in case” out of self-interest and reduce their dependency on distant suppliers and sales markets.
But that is not all. More and more companies find themselves under pressure to take a public position on geopolitical issues. In Germany, 85 percent of executives are prepared to have to show their colors more in difficult questions of international politics such as human rights, climate change, freedom and forced labor.
Very few managers are prepared for this and still refer to their lobby groups or simply remain silent. That will not be enough in the long run.
It is therefore all the more important that politicians give companies a reliable framework in which they can position themselves. For Europe this means that the EU urgently needs a national security strategy like the one that has existed in the USA for a long time. Permanent tensions can only be prevented if European politics weighs up its political and economic interests and derives specific guidelines for companies from them.
Unilever and Shell on the run
However, it cannot be prevented that in the future there will again and again conflicting goals between stakeholders in general and ties to home and economic interests in particular.
The flight of the multinationals Unilever and Shell from the Netherlands to London shows that love of home often ends where business begins. 80 percent of the executives surveyed are of the opinion that a company is responsible for success regardless of national interests.
More: Shell can evade higher taxes, but not shareholder pressure