The Luxury Phenomenon - The Globalization Of Variety

Our contemporary understanding of globalization is an increasing interlinking and interdependence of national economies within a global economy. This view of globalization has become associated with large corporations driven by their own immediate self-interests. This process is seen as leading to an increasingly homogenous global culture. This can be described as the globalization of uniformity. The globalization of uniformity is most often identified with the phenomenon of outsourcing, and the rise of the truly global corporation. Many of the arguments against globalization arise out of fear engendered by this process; a fear that such globalization of uniformity may lead to a loss of cultural identity and national sovereignty. Bu there is another, less widely studied, aspect to globalization. Improved communication, access to information, and lowering / elimination of barriers to trade,can also lead to greater entrepreneurship and innovation. Globalization in this perspective can lead to specific local competencies taking deeper root and finding opportunities to flower not just in their local markets, but across the world. This can be referred to as the globalization of variety, which, to some extent, can reverse the outsourcing process and strengthen local cultures. One example of the globalization of variety is the luxury industry, which is today composed of companies which started out mainly as small family-owned businesses and social enterprises barely fifty years ago. Significantly, the luxury industry is largely Europe-driven, and now has an important role to play in the continued evolution of European culture, identity and ethos. Research has shown that changing the definitions of luxury has the potential to transform attitudes towards wealth. This is critical to the future global economy. This paper studies the luxury industry as a microcosm of the globalization of variety. Based on the analysis of the luxury industry, the paper proposes a taxonomy within which different industry sectors can be studied from the two different globalization perspectives, and which can be used for making policy recommendations to catalyze the evolution of new competencies within a local economy, and drive these systematically to take advantage of the process of globalization of variety.