Rudy Araujo

*Editor’s Note: CC Biz Buzz is a monthly column series that features insightful commentary from a member of the Columbia College Robert W. Plaster School of Business faculty.

By Rudy Araujo

At times, it is hard to see the effects of global trend changes. However, not knowing them may lead us to miss opportunities that would favor the community. Critical in this trend change is the deglobalization process, which seeks to improve our national productive capacity by reinvigorating local capacities via public and private investment.

This column attempts to assess our current position as consumers before the trend changes, explain the role of public investment in improving our productive capacity, and explore small communities’ growth and development opportunities.

Deglobalization, often seen as a shift from cost-reduction strategies abroad to increased local production, presents a tradeoff for consumers. While local production may be slightly costlier, it brings the advantage of job creation, leading to increased consumption and private-sector investment. This shift, though it may increase costs, is a strategic investment in our future and that of future generations.

Local production would naturally be more costly than the one taking advantage of lower labor costs abroad. However, even though this would make our economy a bit more expensive, focusing on the expected gains rather than the costs involved is essential. Indeed, if the added costs translate into boosting our productive capacity of tangible goods through more aggressive industrialization, communication, and infrastructure development processes, then the gains are commendable. In other words, the added costs are nothing but a small- investment contribution to our future and that of new generations.

Significant investments are needed to steer the economy in the direction alluded to in the previous paragraph. Currently, these investments primarily come from the government, which is often a cause for concern about debt accumulation. However, it’s crucial to focus on the quality of the investment. Notably, the government supports the country’s productive capacity through communications infrastructure, information technology, and industrial production improvement and development. Better roads, ready access to information, and good-paying jobs for producing value-added goods are old recipes that have proven to be good for growth.

Furthermore, as the chain of events will prove, increased production will translate into more job creation. The greater the number of jobs, the stronger our economy’s consumption capacity will become. This e latter would create a positive environment for private investment, which could help support a steady growth prospect and create the conditions for the nation to reduce the debt burden for future generations progressively. Thus, these job-creating investments bolster our economy’s consumption capacity and will further incentivize the private sector, providing a reassuring outlook for our community’s development.

For smaller, yet productive communities like ours, this trend presents a unique opportunity. We can position ourselves as distribution hubs, energy producers, and champions of technical and entrepreneurial education and health. Seizing these opportunities could lead to the development of new businesses, significantly enhancing our region’s quality of life and fostering a sense of optimism about our growth potential.

Rudy Araujo is an adjunct faculty member in the Columbia College Robert W. Plaster School of Business. He has more than three decades of professional experience as chief executive of an international technical support agency and a high-level public servant. In 2019, Araujo turned his attention to teaching and consulting.