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Globalization

Globalization refers to the increasing integration of economies, societies, and cultures through cross-border trade, investment, technology, and migration. It is driven by economic, technological, sociocultural, political, and other factors that facilitate the transnational flow of ideas, goods, and capital. Some key drivers of globalization in India include industrialization and access to foreign goods, financial integration through global markets, and a growing job market that increases competition. Globalization has connected regional economies and increased India's participation in international trade and investment.

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Kuljeet S Gujral
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37 views

Globalization

Globalization refers to the increasing integration of economies, societies, and cultures through cross-border trade, investment, technology, and migration. It is driven by economic, technological, sociocultural, political, and other factors that facilitate the transnational flow of ideas, goods, and capital. Some key drivers of globalization in India include industrialization and access to foreign goods, financial integration through global markets, and a growing job market that increases competition. Globalization has connected regional economies and increased India's participation in international trade and investment.

Uploaded by

Kuljeet S Gujral
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Q1. What is Globalization?

Explain the main drivers favoring globalization


in India?
Globalization describes the process by which regional economies, societies, and cultures have become
integrated through a global network of political ideas through communication, transportation, and trade.
The term is most closely associated with the term economic globalization: the integration of national
economies into the international economy through trade, foreign direct investment, capital
flows, migration, the spread of technology, and military presence. However, globalization is usually
recognized as being driven by a combination of economic, technological, sociocultural, political, and
biological factors. The term can also refer to the transnational circulation of ideas, languages, or culture
through acculturation. An aspect of the world which has gone through the process can be said to
be globalized.

Globalization has various aspects which affect the world in several different ways

 Industrial - emergence of worldwide production markets and broader access to a range of foreign
products for consumers and companies. Particularly movement of material and goods between and
within national boundaries. International trade in manufactured goods increased more than 100 times
(from $95 billion to $12 trillion) in the 50 years since 1955 .China's trade with Africa rose sevenfold
during 2000-07 alone.
 Financial - emergence of worldwide financial markets and better access to external financing for
borrowers. By the early part of the 21st century more than $1.5 trillion in national currencies were
traded daily to support the expanded levels of trade and investment.

As of 2005–2007, the Port of Shanghai holds the title as the World's busiest port.

 Economic - realization of a global common market, based on the freedom of exchange of goods
and capital.

Almost all notable worldwide ITcompanies have a presence in India. Four Indians were among the world's
top 10 richest in 2008, worth a combined $160 billion. In 2007, China had 415,000 millionaires and India
123,000

 Job Market- competition in a global job market. In the past, the economic fate of workers was tied
to the fate of national economies. With the advent of the information age and improvements in
communication, this is no longer the case. Because workers compete in a global market, wages are
less dependent on the success or failure of individual economies. This has had a major effect on
wages and income distribution.
 Political - some use "globalization" to mean the creation of a world government which regulates
the relationships among governments and guarantees the rights arising from social and economic
globalization. Politically, the United States has enjoyed a position of power among the world powers,
in part because of its strong and wealthy economy. With the influence of globalization and with the
help of the United States’ own economy, the People's Republic of China has experienced some
tremendous growth within the past decade. If China continues to grow at the rate projected by the
trends, then it is very likely that in the next twenty years, there will be a major reallocation of power
among the world leaders. China will have enough wealth, industry, and technology to rival the United
States for the position of leading world power.

 Drivers of Globalization
The media and almost every book on globalization and international business speak about different
drivers of globalization and they can basically be separated into five different groups:
1) Technological drivers 
Technology shaped and set the foundation for modern globalization. Innovations in the transportation
technology revolutionized the industry. The most important developments among these are the
commercial jet aircraft and the concept of containerisation in the late 1970s and 1980s. Inventions in the
area of microprocessors and telecommunications enabled highly effective computing and communication
at a low-cost level. Finally the rapid growth of the Internet 1 is the latest technological driver that created
global ebusiness and e-commerce.
2) Political drivers 
Liberalized trading rules and deregulated markets lead to lowered tariffs and allowed foreign direct
investments in almost all over the world. The institution of GATT (General Agreement on Tariffs and
Trade) 1947 and the WTO (World Trade Organization) 1995 as well as the ongoing opening and
privatization in Eastern Europe are only some examples of latest developments.
3) Market drivers 
As domestic markets become more and more saturated, the opportunities for growth are limited and
global expanding is a way most organizations choose to overcome this situation. Common customer
needs and the opportunity to use global marketing channels and transfer marketing to some extent are
also incentives to choose internationalization.
4) Cost drivers 
Sourcing efficiency and costs vary from country to country and global firms can take advantage of this
fact. Other cost drivers to globalization are the opportunity to build global scale economies and the high
product development costs nowadays.
5) Competitive drivers 
With the global market, global inter-firm competition increases and organizations are forced to “play”
international. Strong interdependences among countries and high twoway trades and FDI actions also
support this driver.

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