Globalization and Population Growth Quiz

Introduction to Global Business - MANA 1301 - Spring 2025 - University of Texas at Arlington - Dr. David Shurtleff

• Course overview for an introductory global business course
• Course content will cover globalization and its complexities
• Course is part of a larger curriculum that covers various chapters

Chapter 1 - Part 2: The Rise of Globalization

• Globalization is a multifaceted (socioeconomic) phenomenon
• It encompasses elimination of barriers across borders in trade, investments, culture, technology, and politics
• Globalization aims for economic growth and interdependence between nations

Section 1 Roadmap - Chapters 1-4

• Chapter 1: Global trade growth, international trade organizations, and benefits/drawbacks of globalization
• Chapter 2: Trade, foreign direct investment (FDI), tariffs, nontariff barriers, complexity of trade, and China/US example
• Chapter 3: Regional trade agreements, and codifying trade issues
• Chapter 4: International flow of funds and currency exchange

Chapter Objectives

• Explain the characteristics of globalization, specifically global interconnectedness
• Identify current trends in globalization
• Outline four major factors driving economic globalization.
• Discuss the positive and negative impacts of globalization.

Complexity of the World

• The world is characterized by many countries (197), diverse geographies, climate zones, and currencies. ~180.
• Political systems vary across countries (e.g., free market, command, mixed, democratic, communist).
• Corporate structures and stock exchanges reflect global business operations.
• Conflicts between and among nations are frequent occurrences.

Global Business

• Global business is about competing with everyone from everywhere for everything.
• Globalization fosters constant change in the world.

Largest Economies in the World 2024

• The 10 largest economies account for ~67% of global GDP in 2024.
• The USA, China, Japan, Germany, and India are significant global players.

U.S. Imports 1970-2023

• U.S. imports have increased significantly since 1970, reaching a greater proportion of GDP in recent years.

India & Brazil Imports 1970-2023

• Both India and Brazil have seen ups and downs in their imports over the years, reflecting changes in international trade relations and economic conditions.

Is Globalization Important to Companies?

• Globalization is important for companies because so much of modern business is international.
• International revenue is a key metric for large corporations

Apple's International Revenue

• Apple's revenue is significantly influenced by international sales, with various regions as key contributors to its global income.

Coca-Cola International Revenue

• Coca-Cola's revenue is derived from various global markets.
• Key regions are shown as pie chart segments.

Globalization Important for Companies

• For example, 70% of Boeing's revenue is generated from international sales.

Orders/Deliveries Boeing 787

• Orders and deliveries of the Boeing 787 aircraft are distributed across many countries

Boeing 787 Global Supply Chain

• 65% of the 787 components are sourced globally.

What is Globalization?

• Globalization is the socioeconomic process of eliminating barriers related to trade, investments, culture, information, and politics.

Proven Record of Free Trade Among Nations

• History demonstrates that free trade leads to mutual prosperity, while protectionism leads to poverty.

Higher Global Trade Usually Means Higher GDP per Capita

• Global trade is generally linked to higher GDP per capita across countries.

Limited Trade Example - Poverty of North Korea

• North Korea is a poor, autocratic country with a low GDP per capita and limited global trade.

Globalization Trends

• The center of economic gravity is shifting towards emerging economies (China, SE Asia, India).
• Supply chain failures (e.g., COVID-19) have led to more local content, less globalization (De-globalization)
• Regional partnerships are on the rise rather than total global trade.

Trend - Shift to Asia

• Asia's significance in the global economy is increasing rapidly.
• Asia accounts for more than half of global metrics in world economy.

Asian Countries & Trade Routes

• Asian countries have strong links in global trade routes.
• Most of the world's 20 largest trade routes pass through Asia.

Emerging Markets, BRICS, and Global Economic Projection Growth

• Emerging markets like Brazil, Russia, India, China, and other nations show high growth potentials in real GDP.

Shortening Supply Chains

• Some companies want to reduce dependence on overseas suppliers, so they are setting up factories in new countries..
• Companies investing billions to do this.

TSMC will build most advanced chips plants

• Taiwan Semiconductor Manufacturing Company (TSMC) is planning to establish a chip manufacturing plant in Phoenix
• This represents a major investment in chip production moving to U.S. land.

U.S. 'Re-shoring' of Jobs

• More jobs are returning to the U.S.

Walmart's Re-shoring

• Walmart is investing significantly to manufacture goods in the U.S.

Impact of Globalization Trends

– Globalization trends have seen a change and new challenges for businesses. – There is a trend of nations looking to reduce their dependencies on international trade.

How Economically Connected is the World?

• Globalization remains significant, despite recent challenges.
• DHL's Global Connectedness Report shows this.

DHL Global Connectedness Index

• The index shows a record high in globalization in recent years.

Items to Note on DHL Index

• Trade between the US and China is declining
• Trade Between the European Union and Russia has also decreased

Globalization Growth – Trade Openness

• The "trade openness index" exponentially increased over the past ~70 years.

Intl Trade Organizations - History of Globalisation

• Historical overview of international trade organizations like the IMF, World Bank and others.

World Economic Organizations

• 1944 was a turning point in creating world economic organizations to set rules to prevent global economic collapses.

Formation of Key International Institutions That Facilitate Globalization

• The IMF, World bank and others facilitate globalization.

Key International Institutions That Facilitate Globalization

• The IMF serves various purposes including foreign exchange monitoring, trade policies, and loan funding.
• The World Bank assists in developing nations.

World Bank Loan Summary

• The World Bank lends for various purposes, such as supporting projects to improve roads, dams, etc.
• The Bank has offered loans, assistance, and investments.

World Bank Lending

• Data and analysis of where money is lent.

World Bank Lending

• Geographic data and figures about lending for various purposes and geographies.

Global Demand for Goods/Services Increased

• Global demand for goods and services has increased significantly in line with population growth.

Potential Negative Impacts of Globalization

• Some negative side effects of globalization are reduced job availability and fluctuating income in some areas.

Decoupling/De-risking

• Decoupling is lessening reliance on other countries for goods and products
• Less reliance on international trade

Impact of Globalization – Decoupling Product Decoupling Example

• Globalization has led to a trend of decoupling, or reduced reliance on production partnerships, in various global markets, particularly semiconductor markets.

Strategic Autonomy = Decoupling

• Economic and technological strategies to lessen reliance on other countries are increasing.

Economic Impact of Decoupling Trend in Globalization

• A move away from international trade is increasing costs, as many businesses are having to pay more for domestic goods and services and are no longer taking advantage of cheaper products and services.

Global Economic “Connectedness”

– The world is highly connected through international trade.

Myth of Globalization/Negative Impacts

• Discusses the notion that globalization is responsible for reduced job security, economic instability, and political instability in many regions.

Chapter 1 Summary

• Summarizing 3 major forces affecting global business: Definition, Trends (Decoupling/Reshoring), and Reasons for Growth/Decoupling/Multi-polar influence.

Take-home Assignment #2

• Instructions for a take-home assignment related to semiconductor production and de-coupling.