Investing in a ‘smaller’ world

You’ve all heard the phrases: "The world is shrinking" and "We live in a global village." While advances in technology and transportation have slashed the time it takes to communicate and travel, they haven’t changed the age-old fact that much of what happens around the globe is driven by the relationship between people and where they live.
Geography is not just a "Jeopardy" category. It doesn’t exist so contestants can pinpoint the Sea of Okhotsk or Sierra Leone under pressure. It is the discipline that links the study of human societies and natural environments in a way that helps us understand today’s events – and tomorrow’s mega-trends.
That message was delivered by noted geographer H.J. de Blij of Michigan State University in a recent presentation to the State of Wisconsin Investment Board, the state agency that invests the assets of the Wisconsin Retirement System, the State Investment Fund and all other state trust funds. In total, SWIB has about $70 billion under management.
Why is an investment board – granted, one of the largest of its kind in the country – hearing from a geographer? Understanding the forces at play in the world today could help determine how, and where, those assets are invested.
A native of the Netherlands and the co-author of books such as "Concepts and Regions in Geography," de Blij consistently tells audiences that understanding the layout of the world is essential to anticipating and solving problems. He sees four major challenges to the United States in the 21st century – and each is linked to geography. Here’s a summary:
Catastrophic environment change
The next 25 to 50 years will see the world get dramatically warmer, to the point that sea levels will rise and continental climates will change. Unlike many environmentalists, however, de Blij doesn’t blame it on purely on human activity. Natural changes in the Earth’s climate – such as the Ice Age that shaped Wisconsin’s landscape thousands of years ago and, more recently, the "Little Ice Age" that changed history in Europe 700 years ago – are largely beyond human control.
"This is nature’s grand design. If we think we can stabilize the climate by plugging up the exhaust pipes of cars or shutting down coal-fired power plants, we must think again," de Blij said. "That doesn’t mean we shouldn’t clean up, but just don’t expect a (climate-related) reward for the effort."
World leaders should nonetheless be stepping up efforts to move from a carbon-based economy to a hydrogen economy (fuel cell technologies), and preparing for rising waters in coastal areas. If two-thirds of the Netherlands can exist below sea level, de Blij said, it’s possible to protect coastlines elsewhere.
The geography of terrorism
From the schoolhouse slaughter in Beslan, Russia, to attempts by Islamic radicals to regain the lost borders of Islam, the study of geography can help explain why much of the world appears under siege. Whether it is religious fundamentalism or "the last wars of de-colonialization," explained de Blij, the world is living today with maps altered by conquests and politics hundreds of years ago. Those maps don’t always mesh with the geographic realities of where human societies developed.
"It makes me quite pessimistic about some form of compromise," he said.
Managing relations with China
Even as climates change, China will be able to cope because of its proximity to vast food-producing regions. It has not surrendered historic claims to land in present-day Russia, however, and there’s a belief among many Chinese that the United States is thwarting its natural order in the world.
"This relationship will develop more Cold War overtones" before it improves, de Blij said.
Making Africa a priority
Having spent years on the continent, de Blij described Africa as "a fractured state where there is neither a dominant state nor a dominant belief system." The Islamic movement is spreading south from the sub-Saharan region, and it is the only place in the world today where food production is falling. It is a continent still rich in natural resources, however, including oil, uranium, cobalt and platinum.
Because colonialism helped create many of the problems in Africa today, de Blij said, "the world owes Africa a break" and should do its best to help stabilize the region.
Viewing the world in geographic perspective will help to explain the momentous political, social and economic transformations under way. We may live in a global village – but that village still has many neighborhoods.
Tom Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison. He writes a regular column for WisBusiness.com, a business news media partner of Small Business Times. Additional content is available at www.wisbusiness.com.
October 1, 2004, Small Business Times, Milwaukee, WI