Globalization: A Golden Age for Business

Globalization

• This is the golden age for business, commerce, and trade, with instant information and communication making everything available to anyone, anywhere.
• Markets are now global, and many corporations are richer and more powerful than many countries.

History of Globalization

• There has always been trade between countries and societies, but never on a scale close to today's levels.
• A combination of reduced trade barriers, financial liberalization, and technological revolution have changed the nature of business in industrialized countries.

Benefits of Globalization

• Globalization has brought many benefits, including wealth, faster economic growth, higher living standards, accelerated innovation, and new opportunities for individuals and countries.

Drawbacks of Globalization

• Globalization can also take away wealth, as seen in the Asian financial crisis of 1997, which sent millions of people back into poverty.

Statistics on Globalization

• 1.2 billion people live in extreme poverty, on an income of roughly US $1 a day or less.
• 3 billion people live on $2 a day or less.
• Industrialized countries, with 19% of the world's population, account for 71% of global trade in goods and services, 58% of foreign direct investment, and 91% of all Internet users.
• Over $1.5 billion is exchanged on the world's currency markets each day.

Definitions of Globalization

• "Processes by which goods, services, capital, people, information, and ideas flow across national borders." (Grewal/Levy)
• "Trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies." (Wild/Wild/Han)

Everyday Examples of Globalization

• Globalization involves us all, from waking up to a GE alarm clock made in China to sipping a Starbucks coffee harvested in Colombia.

Characteristics of Globalization

• Two characteristics of globalization are:
  • Falling barriers to trade and investment
  • Technological innovation