PHILIPPINE COLLEGE OF SCIENCE AND TECHNOLOGY Old Nalsian Road, Nalsian, Calasiao, Pangasinan, Philippines 2418 Tel. No. (075)522-8032/Fax No. (075)523-0894/Website: www.philcst.edu.ph ISO 9001:2015 CERTIFIED, Member: Philippine Association of Colleges and Universities (PACU), Philippine Association of Maritime Institutions (PAMI) INTRODUCTION: GLOBALIZATION, GLOBALISTICS AND GLOBAL STUDIES Learning Objectives: After studying this module, you should be able to: Define what is Globalization Know the advantage and disadvantages of Globalization Explained Globalization as social, cultural, political, and legal phenomenon. Identify the factors that aid the growth of globalization. Explain the Ethical Issues affect global marketing practices. Globalization is one of the most popular subjects of contemporary academic research. Globalization process itself is changing very fast, whereas the comprehension of this process speeds it up and makes it irreversible. Note that globalization studies have increased public interest in Global Studies that were rather popular in the 1960s and 1970s, but then this interest weakened for a while. It is quite clear that globalization can be treated as the most important global process, whereas the total number of global processes (natural and social, contemporary and historical) that find themselves in focus of scientific research is constantly growing. It becomes more and more clear that even in quite different global processes one may find a significant number of common systemic properties that make our comprehension of the global evolution more profound. It is not coincidental that Globalistics (this notion will be spelled out further below) pays a special attention to the comparison between natural and social global processes. This explains why the content of the notion of globalization expands. It is not just limited to the most popular spheres of economic and political globalization, but also includes the study of various global problems such as climatic change, cultural globalization, and so on. Being one of global processes, globalization has many faces; it has its own image in every country. One can get a truly objective picture only through a synthesis of all those particular visions. Thus, there is a necessity to provide a multi-faceted analysis of globalization, to co-operate with scholars from many different countries and to integrate visions of global processes from all continents, regions and states. We believe that current events such as the financial crisis illustrate that discussion should not be limited to particular geographic regions or narrowly-defined methods of analysis. It is important to provide for a broadly international and multicultural forum on issues associated with globalization, and the influence of globalization in particular cultural-geographic regions. Globalization is a very broad concept not only with respect to the diversity of regions, cultures, and actors, but also with respect to the diversity of analytical approaches that can be employed to its study. In this book we are striving to cover various aspects and dimensions of globalization, to see both its local and global manifestations. Authors: Grinin, Leonid; Ilyin, Ilya V.; Korotayev, Andrey Almanac: Globalistics and Globalization Studies PHILIPPINE COLLEGE OF SCIENCE AND TECHNOLOGY Old Nalsian Road, Nalsian, Calasiao, Pangasinan, Philippines 2418 Tel. No. (075)522-8032/Fax No. (075)523-0894/Website: www.philcst.edu.ph ISO 9001:2015 CERTIFIED, Member: Philippine Association of Colleges and Universities (PACU), Philippine Association of Maritime Institutions (PAMI) What Is Globalization? Globalization is the spread of products, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of nations around the globe fostered through free trade. On one hand, globalization has created new jobs and economic growth through the cross-border flow of goods, capital, and labor. On the other hand, this growth and job creation is not distributed evenly across industries or countries. Specific industries in certain countries, such as textile manufacturing in the U.S. or corn farming in Mexico, have suffered severe disruption or outright collapse as a result of increased international competition. Globalization motives are idealistic, as well as opportunistic, but the development of a global free market has benefited large corporations based in the Western world. Its impact remains mixed for workers, cultures, and small businesses around the globe, in both developed and emerging nations. Globalization Explained Corporations gain a competitive advantage on multiple fronts through globalization. They can reduce operating costs by manufacturing abroad. They can buy raw materials more cheaply because of the reduction or removal of tariffs. Most of all, they gain access to millions of new consumers. Globalization is a social, cultural, political, and legal phenomenon. Socially, it leads to greater interaction among various populations. Culturally, globalization represents the exchange of ideas, values, and artistic expression among cultures. Globalization also represents a trend toward the development of single world culture. Politically, globalization has shifted attention to intergovernmental organizations like the United Nations (UN) and the World Trade Organization (WTO). Legally, globalization has altered how international law is created and enforced. KEY TAKEAWAYS Globalization has sped up to an unprecedented pace since the 1990s, with public policy changes and communications technology innovations cited as the two main driving factors. China and India are among the foremost examples of nations that have benefited from globalization. One clear result of globalization is that an economic downturn in one country can create a domino effect through its trade partners. The History of Globalization Globalization is not a new concept. Traders travelled vast distances in ancient times to buy commodities that were rare and expensive for sale in their homelands. The Industrial Revolution brought advances in transportation and communication in the 19th century that eased trade across borders. The think tank, Peterson Institute for International Economics (PIIE), states globalization stalled after World War I and nations' movements toward protectionism as they launched import taxes to more closely guard their industries in the aftermath of the conflict. This trend continued through the Great Depression and World War II until the U.S. took on an instrumental role in reviving international trade. Globalization has since sped up to an unprecedented pace, with public policy changes and communications technology innovations cited as the two main driving factors. One of the critical steps in the path to globalization came with the North American Free Trade Agreement (NAFTA), signed in 1993. One of NAFTA's many effects was to give American auto manufacturers the incentive to relocate a portion of their manufacturing to Mexico where they could save on the costs of labor. As of February 2019, the NAFTA agreement was due to be terminated, and a new trade agreement negotiated by the U.S., Mexico, and Canada was pending approval by the U.S. Congress. Governments worldwide have integrated a free market economic system through fiscal policies and trade agreements over the last 20 years. The core of most trade agreements is the removal or reduction of tariffs. This evolution of economic systems has increased industrialization and financial opportunities in many nations. Governments now focus on removing barriers to trade and promoting international commerce. Globalization Advantages Proponents of globalization believe it allows developing countries to catch up to industrialized nations through increased manufacturing, diversification, economic expansion, and improvements in standards of living. Outsourcing by companies brings jobs and technology to developing countries. Trade initiatives increase crossborder trading by removing supply-side and trade-related constraints. Globalization has advanced social justice on an international scale, and advocates report that it has focused attention on human rights worldwide. Disadvantages of Globalization One clear result of globalization is that an economic downturn in one country can create a domino effect through its trade partners. For example, the 2008 financial crisis had a severe impact on Portugal, Ireland, Greece, and Spain. All these countries were members of the European Union, which had to step in to bail out debt-laden nations, which were thereafter known by the acronym PIGS. Globalization detractors argue that it has created a concentration of wealth and power in the hands of a small corporate elite which can gobble up smaller competitors around the globe. Globalization has become a polarizing issue in the U.S. with the disappearance of entire industries to new locations abroad. It's seen as a major factor in the economic squeeze on the middle class. For better and worse, globalization has also increased homogenization. Starbucks, Nike, and Gap Inc. dominate commercial space in many nations. The sheer size and reach of the U.S. have made the cultural exchange among nations largely a one-sided affair. Real World Examples of Globalization A car manufacturer based in Japan can manufacture auto parts in several developing countries, ship the parts to another country for assembly, then sell the finished cars to any nation. China and India are among the foremost examples of nations that have benefited from globalization, but there are many smaller players and newer entrants. Indonesia, Cambodia, and Vietnam are among fast-growing global players in Asia. Ghana and Ethiopia had the fastest-growing African economies in the world in 2018, according to a World Bank report. (For related reading, see "What Is the Role of the Nation-State in Globalization?") Factors That Have Contributed to Globalisation A variety of factors have contributed to the process of globalisation. Some of the most important globalisation drivers are outlined below. Containerisation The costs of ocean shipping have come down, due to containerisation, bulk shipping, and other efficiencies. The lower unit cost of shipping products around the global economy helps to bring prices in the country of manufacture closer to those in export markets, and it makes markets more contestable globally Technological change Rapid and sustained technological change has reduced the cost of transmitting and communicating information – sometimes known as “the death of distance” – a key factor behind trade in knowledge products using web technology Economies of scale Many economists believe that there has been an increase in the minimum efficient scale (MES) associated with some industries. If the MES is rising, a domestic market may be regarded as too small to satisfy the selling needs of these industries. Many emerging countries have their own transnational corporations Differences in tax systems The desire of businesses to benefit from lower unit labour costs and other favourable production factors abroad has encouraged countries to adjust their tax systems to attract foreign direct investment (FDI). Many countries have become engaged in tax competition between each other in a bid to win lucrative foreign investment projects. Less protectionism Old forms of non-tariff protection such as import licensing and foreign exchange controls have gradually been dismantled. Borders have opened and average import tariff levels have fallen. That said, it is worth knowing that, in the last few years, there has been a rise in non-tariff barriers such as import quotas as countries have struggled to achieve real economic growth and as a response to persistent trade and current account deficits. Growth Strategies of Transnational and Multinational Companies In their pursuit of revenue and profit growth, increasingly global businesses and brands have invested significantly in expanding internationally. This is particularly the case for businesses owning brands that have proved they have the potential to be successfully globally, particularly in faster-growing economies fuelled by growing numbers of middle class consumers. References: www.google.com www.wikipedia.com
