What is the end result of globalization? A new era of international hypercompetition - and sky-high commodities prices - called "globality," says Harold (Hal) L. Sirkin, co-author of 2008's "Globality: Competing with Everyone from Everywhere for Everything."

Sirkin, senior partner of the Boston Consulting Group's Chicago office, has written about globality's impact on businesses and the markets for BusinessWeek, Harvard Business Review and the New York Times. He's also a frequent guest on CNBC, Fox Business News, MSNBC and CNN. HardAssetsInvestor.com Associate Editor Lara Crigger recently chatted with Sirkin about globality, including how it impacts commodities supply and demand, which emerging markets could soon dominate the markets and who exactly are "the next billion customers."

Lara Crigger, HardAssetsInvestor.com (Crigger): What is globality, and how is it different from globalization?

Hal Sirkin, senior partner, Boston Consulting Group (Sirkin): Primarily, globalization was about companies from the developed world - the U.S., Western Europe, Canada, Japan - looking for ways to save money and to be more competitive. Those companies went to the developing world to source parts, components and products, because they could forgo wage rates that might have been $20-30/hour in the U.S., and work with people who were earning $1/hour. And $1/hour was actually good money in those poor countries; it was a good opportunity for them to improve their standard of living.

But this created an interesting dynamic that wasn't anticipated - companies in those markets began to learn about how to produce products for the developed world, and they weren't satisfied by just serving the traditional multinational companies. They wanted to serve the end customers themselves.

So these suppliers became competitors. It became a two-way street. And it wasn't just about going and getting low-cost labor; you started to see the real development of companies like Bharat Forge and Tata in India or GoodBaby in China, who are now selling products in the developed world. Globality is about that shift.

Crigger: So what impact does globality have on commodities prices and markets?

Sirkin: Well, it's a dynamic we haven't really seen in the world yet, at least not at this magnitude. The population of the traditional definition of the developed world - the U.S., Western Europe, Japan, the people who did the bulk of the consumption before - is less than a billion people. But now, individuals [in developing markets] are seeing increases in their standard of wealth, and it's causing what we consider "the next billion customers" to emerge.

So now there's higher demand for things like cell phones, better household appliances, cars and other things. That increases demand for petroleum and steel and all the other commodities. But the world can only produce commodities at a certain rate, and, of course, there's a limited amount of commodities on the Earth. Therefore, you're going to see big changes in the supply/demand balance.

Crigger: So that means, long term, prices will have nowhere to go but up, right?

Sirkin: Obviously, there are short-term fluctuations that take place. But if you look at the long-term trends, the long-term trend says there's just going to be more demand, and increasing difficulty meeting that with supply.

Crigger: So this really is magnifying effects already in play.

Sirkin: Yes. You're taking a billion people in the world who lived in abject poverty, whose daily focus was on getting enough calories to make it to the next day, and then all of the sudden they're living a better life. That's going to put more stress on the world's producers to be able to support that. Yes, it's a good thing that there will be another billion people who no longer have to focus every day on whether they starve to death or not. But it has other impacts, and that impact is that it will cause more demand on the world's resources, and we've got to find ways to solve that.

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