If each local region needs its own widget factory, then to become a top widgetsmith you only have to compete with the local widgetsmith talent pool. Just as there can be many high school star athletes across the world, there can be many top widgetsmiths within their local widget factories across the world, even if each is likely mediocre relative to the global pool of widgetsmiths.
Now the widget market has globalized. To become a top widgetsmith, you now need to be the best in the world. There is no room for locally optimal widgetsmiths when the market can globally optimize, just as there’s no room for most star high school athletes at the NBA.
The upside is that the entire world gets much better widgets. The downside is that you can only make a good living as a widgetsmith if you’re the absolute best in the world. Local markets lead to redundancy, which is globally inefficient but locally optimal.