Globalization

Introduction
Globalization or globalisation is the process of interaction and integration among people, companies, and
governments worldwide. As a complex and multifaceted phenomenon, globalization is considered by some
as a form of capitalist expansion which entails the integration of local and national economies into a global,
unregulated market economy. Globalization has grown due to advances in transportation and
communication technology. With the increased global interactions comes the growth of international trade,
ideas, and culture. Globalization is primarily an economic process of interaction and integration that's
associated with social and cultural aspects. However, conflicts and diplomacy are also large parts of the
history of globalization, and modern globalization.

Economically, globalization involves goods and services, and the economic resources of capital, technology,
and data. Also, the expansions of global markets liberalize the economic activities of the exchange of goods
and funds. Removal of Cross-Border Trades barriers has made formation of Global Markets more feasible.
The steam locomotive, steamship, jet engine, and container ships are some of the advances in the means of
transport while the rise of the telegraph and its modern offspring, the Internet and mobile phones show
development in telecommunications infrastructure. All of these improvements have been major factors in
globalization and have generated further interdependence of economic and cultural activities around the
globe.

Though many scholars place the origins of globalization in modern times, others trace its history long before
the European Age of Discovery and voyages to the New World, some even to the third millennium BC. The
term globalization is recent, only establishing its current meaning in the 1970s.

In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and
transactions, capital and investment movements, migration and movement of people, and the dissemination
of knowledge. Further, environmental challenges such as global warming, cross-boundary water, air
pollution, and over-fishing of the ocean are linked with globalization. Globalizing processes affect and are
affected by business and work organization, economics, socio-cultural resources, and the natural
environment. Academic literature commonly subdivides globalization into three major areas: economic
globalization, cultural globalization, and political globalization.

Economic Globalisation
Economic globalization comprises: Globalization of production; which refers to the obtention of goods and
services from a particular source from different locations around the globe to benefit from difference in cost
and quality. Likewise, it also comprises globalization of markets; which is defined as the union of different
and separate markets into a massive global marketplace. Economic globalization also includes competition,
technology, and corporations and industries

Cultural globalization
Cultural globalization refers to the transmission of ideas, meanings, and values around the world in such a
way as to extend and intensify social relations. This process is marked by the common consumption of
cultures that have been diffused by the Internet, popular culture media, and international travel. This has
added to processes of commodity exchange and colonization which have a longer history of carrying
cultural meaning around the globe. The circulation of cultures enables individuals to partake in extended
social relations that cross national and regional borders. The creation and expansion of such social relations
is not merely observed on a material level. Cultural globalization involves the formation of shared norms
and knowledge with which people associate their individual and collective cultural identities. It brings
increasing interconnectedness among different populations and cultures.

Political globalization
Non-governmental organizations influence public policy across national boundaries, including humanitarian
aid and developmental efforts. Philanthropic organizations with global missions are also coming to the
forefront of humanitarian efforts; charities such as the Bill and Melinda Gates Foundation, Accion
International, the Acumen Fund (now Acumen) and the Echoing Green have combined the business model
with philanthropy, giving rise to business organizations such as the Global Philanthropy Group and new
associations of philanthropists such as the Global Philanthropy Forum. The Bill and Melinda Gates
Foundation projects include a current multibillion-dollar commitment to funding immunizations in some of
the world's more impoverished but rapidly growing countries. The Hudson Institute estimates total private
philanthropic flows to developing countries at US$59 billion in 2010

Anti-globalization movement
Anti-globalization, or counter-globalization, consists of a number of criticisms of globalization but, in
general, is critical of the globalization of corporate capitalism. The movement is also commonly referred to
as the alter-globalization movement, anti-globalist movement, anti-corporate globalization movement, or
movement against neoliberal globalization. Opponents of globalization argue that there is unequal power
and respect in terms of international trade between the developed and underdeveloped countries of the
world. The diverse subgroups that make up this movement include some of the following: trade unionists,
environmentalists, anarchists, land rights and indigenous rights activists, organizations promoting human
rights and sustainable development, opponents of privatization, and anti-sweatshop campaigners.
 Globalisation

Introduction
“The geographic dispersion of industrial and service activities, for example research and development,
sourcing of factor inputs, production and distribution, and the cross-border networking of companies, for
example through joint ventures and the sharing of assets.”

In terms of your studies of global business, it is important to understand that:

 Globalisation is a process in which economies have become increasingly integrated and inter-
dependent
 Globalisation is dynamic rather than an end state
 Globalisation is not inevitable – it can reverse, indeed the growth of world trade in goods and
services slowed in recent years following the global financial crisis

Key Characteristics of Globalisation

Globalisation is a process of deeper integration between countries and regions of the world involving:

1. Greater trade across borders in goods and services

2. An increase in transfers of capital including the expansion of foreign direct investment (FDI) by
transnational companies (TNCs) and the rising influence of sovereign wealth funds. Fifty-one of the largest
economies in the world are corporations. The top 500 TNCs account for nearly 70% of world trade.

3. The development of global brands that serve markets in lower, middle and higher-income countries

4. Greater use of outsourcing and offshoring of production. The classic example is the iPhone which is part
of a complex global supply chain. The product was conceived and designed in Silicon Valley in the USA
and the software enhanced by engineers working in India. Most iPhones are assembled in China and Taiwan.

5. High levels of labour migration both within and between countries

6. New nations joining the trading system, for example Russia joined the World Trade Organisation (WTO)
in 2012. The latest countries to join the WTO are Yemen (2014), Seychelles (2015) , Kazakhstan (2015) and
Afghanistan (2016)

7. A shift in the balance of economic and financial power from developed to emerging economies and
markets – i.e. a change in the centre of gravity in the world economy
8. Increasing spending on capital investment, innovation and infrastructure across large parts of the world

9. Globalisation is a process of making the world economy more connected and inter-dependent

10. Many industrialising (emerging) countries are winning a rising share of world trade and their economies
are growing faster than developed nations. Emerging and developing countries now account for more than
57% of global GDP adjusted for purchasing power according to 2015 data published by the IMF. The 28-
nation European Union has a share of global GDP of less than 17%.

Reasons for globalisation

There are several key factors which have influenced the process of globalisation:

 Improvements in transportation - larger cargo ships mean that the cost of transporting goods
between countries has decreased. Economies of scale mean the cost per item can reduce when
operating on a larger scale. Transport improvements also mean that goods and people can travel
more quickly.
 Freedoms of trade - organisations like the World Trade Organisation (WTO) promote free trade
between countries, which help to remove barriers between countries.
 Improvements of communications - the internet and mobile technology have allowed greater
communication between people in different countries.
 Labour availability and skills - countries such as India have lower labour costs (about a third of
that of the UK) and also high skill levels. Labour intensive industries such as clothing can take
advantage of cheaper labour costs and reduced legal restrictions in LEDCs.

Positive impacts of globalisation

Globalisation is having a dramatic effect - for good or bad - on world economies and on people's lives.

Some of the positive impacts are:

 Inward investment by TNCs helps countries by providing new jobs and skills for local people.
 TNCs bring wealth and foreign currency to local economies when they buy local resources, products
and services. The extra money created by this investment can be spent on education, health and
infrastructure.
 The sharing of ideas, experiences and lifestyles of people and cultures. People can experience foods
and other products not previously available in their countries.
 Globalisation increases awareness of events in faraway parts of the world. For example, the UK was
quickly made aware of the 2004 tsunami and sent help rapidly in response.
 Globalisation

Introduction:
If climate change is the key process in the natural world impacting on sustainable development, then
globalisation is the parallel process in the human world, creating both opportunities for, and barriers to,
sustainable development.

Globalisation is the ongoing process that is linking people, neighbourhoods, cities, regions and countries
much more closely together than they have ever been before. This has resulted in our lives being intertwined
with people in all parts of the world via the food we eat, the clothing we wear, the music we listen to, the
information we get and the ideas we hold.

This interconnectedness amongst humans on the planet is sometimes also referred to as the „global village‟
where the barriers of national and international boundaries become less relevant and the world, figuratively,
a smaller place. The process is driven economically by international financial flows and trade,
technologically by information technology and mass media entertainment, and very significantly, also by
very human means such as cultural exchanges, migration and international tourism. As one commentator
remarked, we now live in a networked world.

While globalisation is not a new process, it has accelerated rapidly since World War II, and is having many
effects on people, the environment, cultures, national governments, economic development and human well-
being in countries around the world. Many of these impacts are beneficial, but Jimmy Carter, a former
President of the USA, has pointed out that many people are missing out on these benefits:

Globalisation, as defined by rich people like us, is a very nice thing… you are talking about the Internet, you
are talking about cell phones, you are talking about computers. This doesn‟t affect two-thirds of the people
of the world.

These issues make the development of an understanding of globalisation, its various integrated forms, its
driving forces and its impacts a vitally important education objective. Such a understanding can provide
young people with critical insights into the social, cultural and political impacts of the globalising impacts of
economic integration and communication technologies – as well as provide them with capacities to assess
the costs and benefits in their lives an communities and those of people in other parts of the world. This
provides an important ethical, as well as analytical, dimension to the study of globalisation.
Objectives
 To understand basic concepts, processes and trends associated with globalisation;
 To assess the impacts of globalisation and the wide range of reactions they have caused around the
world;
 To understand the interconnected nature of the major drivers of globalisation;
 To appreciate the complexity of teaching about globalisation; and
 To develop a rationale for integrating a global perspective in Teaching and Learning for a Sustainable
Future.

Positive impacts of globalisation

Globalisation is having a dramatic effect - for good or bad - on world economies and on people's lives.

Some of the positive impacts are:

 Inward investment by TNCs helps countries by providing new jobs and skills for local people.
 TNCs bring wealth and foreign currency to local economies when they buy local resources, products
and services. The extra money created by this investment can be spent on education, health and
infrastructure.
 The sharing of ideas, experiences and lifestyles of people and cultures. People can experience foods
and other products not previously available in their countries.
 Globalisation increases awareness of events in faraway parts of the world. For example, the UK was
quickly made aware of the 2004 tsunami and sent help rapidly in response.
 Globalisation may help to make people more aware of global issues such as deforestation and global
warming and alert them to the need for sustainable development.