As the protesters took to the barricades at the G8 summit in northern Germany yesterday, Tata Consultancy Services struck a blow for globalisation.

India’s largest software services provider announced that it would hire 5,000 employees in Mexico over the next five years, as it grows increasingly concerned about skills shortages and labour costs at home. In part, the decision to start outsourcing jobs to Guadalajara is driven by TCS’s wish to be closer to the US market. In part, it reflects Tata’s calculation of how the Indian rupee will fare against the Mexican peso.

But Tata’s Mexican wave is also part of a fundamental change in the nature of globalisation. In a report released this week titled What Matters, McKinsey, the management consultancy, argues that we have entered the third phase of globalisation. In the first, multinational companies in the west raced to set up factories and offices in cheaper labour markets. In the second wave, those developing countries started to look not just like low-cost producers of western products, but rapidly growing markets for western goods. In the third phase, emerging market companies and countries are making the running.

Many of the new global corporate powerhouses come, of course, from Brazil, Russia, India and China. Before 2000 Indian companies had never made a substantial international acquisition. Last year Indian companies did more than 100. In 2000 the US accounted for nine out of every ten dollars raised by initial public offerings worldwide. Last year it was one in ten. The biggest IPOs were Russian and Chinese. And the trends continue: Tata bought Corus, the remnants of British Steel, earlier this year; Rusal, the Russian aluminium group, has this week launched the roadshow for its planned £15 billion float on the London Stock Exchange.

But the distribution and diversification of capitalist power around the world has not only moved beyond the West to the BRICs. It is rapidly moving all over the planet. If Vietnam was the economy to watch in 2006, it is Libya in 2007. Colony Capital, the US private equity group, yesterday bought into Tamoil, the Libyan-owned petrol retailing business for $4 billion.

Likewise, people are gasping at Dubai today as they did about Shanghai a decade ago: the gulf state, which is the world’s 224th largest city by population, has more construction cranes per capita than anywhere else. This is, as McKinsey puts it, “the globalisation of globalisation”. Or, if you like, the spread of globalisation and its contents.

C&W gets stick over carrots

The Cable & Wireless remuneration committee has served up what Disney has delivered with the Pirates of the Caribbean: a blockbuster sequel. Just a year after the furious controversy over chairman Richard Lapthorne’s decision to award private equity-style pay packages to the company’s senior executives, C&W has returned with another extravagant pay deal: Mr Lapthorne is going to start getting rewarded like an executive, being positioned to earn more than £10 million, and the company has asked investors to lift the £20 million cap on pay for its top executives.

The C&W team has the intellectual argument on its side. The incentive packages put in place have worked: C&W’s share price has doubled in the past year. If shareholders had not lifted the limit on future executive earnings from the company share scheme, then they would be taking away the carrots that have proved so effective in motivating C&W executives in the past.

Mr Lapthorne has been instrumental in the company’s success and has a case for wanting to share in the value created by the changes he has orchestrated. When he took over in 2003, C&W traded at 47p. Yesterday it was trading at 199p. The arrangements are performance-based: the C&W pay scheme does not reward failure and Mr Lapthorne himself is up for annual reelection. C&W carries the burden of being a publicly quoted company. Its well-paid executives could expect to get the same money and less public scrutiny if they worked in private equity. The principle of paying executives handsomely for wealth creation is right: it generates employment and prosperity.

All that said, the remuneration committee seems to have been gulled into agreeing a long-term incentive plan that was drawn up on calculations made by the company’s executives and has proved anything but long-term. The C&W agreement raises a fundamental question about the role and remuneration of the chairman, without providing an explanation for it. The singular focus on multi-million pound incentive schemes raises a more prickly point still: are C&W executives not motivated by anything other than money?

Plan of action?

Only a few years ago, everyone seemed delighted when house prices soared through the roof. No longer. More and more young people are finding themselves locked out of the housing market. Those who already own homes are no better off, obliged to shell out for massive deposits for their children – if they can.

In the Westminster village, the terms of the debate have shifted, and not before time. Now the talk is all about how to fix the affordability crisis. Today’s intervention from the new National Housing and Planning Advice Unit is a welcome move in highlighting the depth of the problem faced both by people who try to buy houses and by those businesses who hope to hire them. Britain’s low mobility of labour makes it harder for companies to grow and acts as a drag on productivity.

Over the past decade, the problem has grown as low interest rates have stoked demand for homes, but the planning system has held back supply.

Suddenly everyone is in favour of overhauling the planning system – but so far rhetoric has outstripped action. In the past quarter, housing starts slipped to their lowest level for 2½ years.

There are only two ways to proceed: reduce demand or increase supply. The Government, so far, seems to be happy to do neither.

Last time Cynthia Carroll was in the news, she was winning a new job to run the vast, rapidly changing Anglo American minerals group. It seemed at least full-time. Many people taking on a new challenge spend all hours to get on top of it. Ms Carroll is now also to become a part-time director of BP, at a tricky time. Perhaps she should make sure her own house is in order before helping out the neighbours.

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