Concept of Globalization- Trends and Issues

Globalization

Globalization is the process of integrating different nations via the exchange of ideas, goods, and other cultural elements. "The expanding openness of international investment and commerce and the resulting excess in the integration of national economies" is a succinct explanation of globalization. The entire world is gradually acting as though it were a single market, with interconnected production, identical items being consumed, and the same impulses being felt. The development of the steamship, container ship, jet engine, and steam locomotive, as well as improvements in telecommunications infrastructure, including the rise of the telegraph and its modern offspring, mobile phones, and the Internet, have been major drivers of globalization, resulting in increased interdependence of economic and cultural activities.

In these examples, globalization is viewed as a process of internationalizing markets and production, which can manifest itself in a variety of ways, including increased foreign direct investment or international trade. All of these factors contribute to the growing interdependence and integration of European economies with respect to the other major economies around the world. In their analysis of globalization trends, the professional authors take a novel approach, focusing on recent events and offering the most up-to-date picture of recent developments in both foreign investments and the ensuing migration of human capital. With a particular emphasis on their effects on regional growth potential, qualitative trends in human capital and financial capital flows are taken into consideration rather than quantitative trends.

Consumption is increasingly made up of items that may be purchased from the same businesses practically anywhere in the world. The technology that is used to generate these things is becoming increasingly standardized and location-independent. More than anything else, ideas are becoming the collective property of all humankind. Professionals with advanced degrees have a comparatively high degree of mobility, but people without such degrees frequently encounter barriers when trying to immigrate to nations with greater wages. Contrary to the challenges, significant segments of the labor forces of several nations are in fact employed abroad. For instance, almost 10% of the Sri Lankan labor force is currently employed abroad. Even now, there are still significant national, local, and regional differences in culture. Minority languages are experiencing a resurgence in affluent nations, despite the fact that English is unmistakably on its way to becoming the global language, at least as a second language. The American sports culture is still highly distinct from the rest of the globe; for example, most of us have yet to learn how to play cricket or comprehend what baseball players are doing. Politics is still essentially organized on the basis of nation-states, despite the nation-state being much less dominant than it once was, with considerable powers devolved both upward to international and, in Europe, to supranational institutions, as well as downward to municipal and regional authorities.

Globalization, according to Melbourne Business School economist David Henderson, is:

• The growing trend of businesses considering global markets and prospects when planning, thinking, investing, and operating for the future.
• Worldwide communications are becoming more affordable and simple, with the Internet playing a key role.
• The propensity for greater global economic integration, which reduces the importance of political borders. The first two developments contribute to this tendency's growth, but government trade and investment-friendly policies have a stronger impact.
• The desire to address concerns and problems that transcend national boundaries by some kind of international concerted action, which appears to be growing in importance.
• The movement toward harmonization or uniformity in which conventions, laws, and practices are established and applied globally rather than just inside the borders of individual nations.

The Blessings of Globalization

What kind of effects is globalization having on national economies in addition to all the astounding statistics regarding its scale? For countries that embrace globalization, there are at least three core benefits: poverty reduction, faster economic growth, and better conditions for democracy.

The long-suffering consumers in those countries that had been "protected" from global competition are the biggest winners from globalization. Increased product quality, greater choice, and price pressure are all benefits of globalization. By raising the real worth of workers' pay, it provides an immediate benefit. Because the deadweight losses to the economy are being reduced through efficiency increases, the gains to consumers outweigh the losses to producers in this wealth transfer from formerly protected producers to newly freed consumers. Due to a lack of actual competition, consumers in independent countries frequently experience subpar service and expensive, low-quality items. This is because domestic producers aren't motivated to satisfy their customers' needs. This describes the subpar quality of vehicles supplied by native companies who are protected, such as in India, where the Morris Oxford, a model that was outmoded in Britain forty years ago, serves as the basis for the standard Ambassador vehicle.

LDCs stand to gain the most from participating in the global economy. First, they have greater access to both export and import markets. Consumers have access to a much wider variety of goods and services thanks to imports, which raises their actual standard of living. Domestic producers benefit from cheaper access to a greater variety of intermediate inputs with higher quality. By offering worldwide markets rather than just a small and underdeveloped domestic market, domestic industries can experience a quantum leap in economies of scale.

Second, LDCs that open themselves to foreign investment and trade have access to considerably more advanced technologies. This gives LDCs a "latecomer's advantage" because they can provide technology off the shelf rather than conducting costly research and development. By bringing in capital equipment with the newest innovations and computers with the newest software, they can implement new technologies. Multinational corporations' subsidiaries also pioneer new production methods and personnel development programs that improve the human capital of the host country.

Third, participation in the global economy brings in money to support future growth. People in LDCs tend to be wealthy and capital-poor. Although the domestic savings pool in an LDC is typically insufficient, it has been substantial enough in several Asian nations to support domestic investment. Global capital markets can close the gap, enabling developing countries to accelerate their rate of economic growth. Foreign direct investment totaling $ 166 billion moved from more affluent economies to less developed economies in 1998. The enormous benefits that this capital can provide will be lost by a poor country that doesn't keep up good domestic policy.

Fourth, a global economy that is open can provide the infrastructure that a developing economy needs to advance. Similar to how British capital helped to fund America's network of canals and railroads in the eighteenth century, foreign capital can be used to finance more conventional types of infrastructure, such as electricity generation, port facilities, and an internal transportation network. Multinational corporations can also provide an infrastructure of what might be referred to as enabling services, including banking, insurance, telecommunications, and accounting. Inefficient and protected service sectors drag down an entire economy, as seen in China and India, delaying the growth of manufacturing and other sectors. The misconception that opening their economies to international service competition is a condition for gaining access to the agricultural and manufacturing markets in the developed countries needs to be dispelled by LDCs. In actuality, LDCs can help themselves by easing the restrictions on their service sectors by opening them up to outside competition.

Fifth, participation in the global economy encourages states to adopt more sane economic regulations. Although sovereign countries are still free to adopt any economic policies they like, the cost of adopting unfavorable policies has increased due to globalization. Because capital is more flexible than ever, nations that steadfastly adhere to anti-market policies will find themselves eliminated from the global investment race. As a result, countries are more motivated to select policies that encourage inward investment and domestic, market-driven growth.

Challenges

For employees all across the world, globalization has proven to be a multifaceted and complex process, much as the methods they must adopt to deal with its obstacles. Globalization has not been an easy or painless process to advance. Two of the most frequent criticisms of globalization are that it has weakened labor and environmental laws and that it has widened the wealth disparity both between and within nations.

• Trade unions are increasingly include problems like interacting with international organizations to influence their policies, organizing global campaigns, and expanding and intensifying their transnational collaboration on their agendas.
• Transnational collaboration is exemplified by the development of networks between trade unions along international industrial systems. Within global production systems, unions must contend with high-tech, frequently anti-union human resource management methods locally and respond to challenging representational circumstances brought on by sourcing choices. Value chain theory does, however, provide some chances for employment. Unions are developing tactics with the goal of managing and bargaining collectively along the value chains in order to take advantage of these opportunities. Using supply chains to organize could be a way to go beyond the current North-South cooperation agreements.
• The improved coordination of productive activity between countries by multinationals demonstrates how the strength of corporate governance has grown in recent years despite the wider dispersion of output. Contrarily, the effects of these value chain techniques on the labor force, along with the diminished importance of national labor regulation in many countries, have created a void in the area of labor rights. Many unions are preoccupied with the fact that, in some instances, voluntary corporate codes of conduct are not sufficiently strongly accompanied by measures of "accountability" as they deal with the expanding influence of the private sector. National and international trade union agendas must be better coordinated as a result of the rising integration of national economies into a single global market and the emergence of new global production systems. For trade unions, which are often set up within a national framework, this presents a significant issue.
• A number of unions will establish international framework agreements as a crucial weapon for regulating the behavior of multinational corporations. They are a crucial tool for addressing some of the challenges exacerbated by globalization because they are collaboratively negotiated by national trade unions, GUFs, and businesses.
• An important driver of improving working conditions is international labor standards. Although the ILO mandates that core labor standards be upheld in all of its members, regardless of whether those nations have approved them, the reality is considerably different. The global labor movement is using the international community to exert pressure on nations that do not abide by the fundamental Conventions to make the necessary changes.

References

Coats, A.W. (1997), The Post-1945 Internationalization of Economics (Durham, N.C. and London: Duke University Press).

(cato.org/publications/commentary/blessings-challenges-globalization)

(ilo.org/global/about-the-ilo/newsroom/features/WCMS_087711/lang--en/index.htm)

Rodrik, Dani (1997), Has Globalization Gone too Far? (Washington: Institute for International Economics).