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Globalisation (Drivers of Globalization (Technology (Lowering of trade…
Globalisation
Drivers of Globalization
Technology
Lowering of trade barriers made globalization possible and technology has made it a reality. Since the end of the world war 2 the world has seen a advance in communication information processing and transport technology.
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Trade barriers- during the 1920's and 30's , many countries introduced formidable trade barriers to international trade and foreign direct investment. Advanced industrial nations of the west committed themselves after world war 2 to removing barriers to the free flow goods, services and capital between nations
The effect of lowering Trade Barriers Volume of world trade and world production look at this image. 
The changing demographics of the global economy, World output and trade, changing direct investment, changing nature of multinationals
Changing nature of Multinationals
What is globalisation? The flows of information, goods, services, capital, and labor. the shift towards a more integrated and interdependent world and economy.
The Compartments
The globalisation of of markets market seeking
the globalisation of product resource seeking
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Market seeking is used to seek new market to sell products and services to expand international market share by selling more
The merging of distinctly separate national markets and global market places.
falling barriers to cross border trade have made it easier to sell internationally
- Tastes and preferences converge onto a global norm
- Firms offer standardized products worldwide creating a world market
Difficulties that arise with globalisation.
Significant differences still exist among national markets: tastes, regulations, and norm
- marketing strategies
- varied product mix
An example of this in India they don't serve use beef products as to Hindus cows are seen as sacred.
The most global markets are not consumer markets, the most global markets are for industrial goods and materials that serve a universal need the world over. These include all commodity markets such as oil and aluminium.
Globalization of production
- Refers top sourcing of goods and services from locations around the world to take advantage of differences in cost or quality of the factors of productions (Land, Labour, Capital)
- Historically this has been primarily confined to manufacturing enterprises
- Increasingly companies are taking advantage of modern communications technology and particularly the internet to outsorce activities tro low cost producers in other nations
Example:IBM (in 2003) announced it would move the work of some 4300 software engineers from the united states to India and China
- Outsouircimng of production activities to different suppliers results in the fcreation of products that are global in nature
- Impediments to the globalisation of production include
- Formal and infgormal barriers to trade
- Barriers to forgein direct investment
- Transportation costs
- Issues associated with economic risk
- Issues associated with political risk
Pros factors Lower prices for good and services, economic growth and stimulation, Increase in consumer incomes, creates jobs, countries specialize in production of good and services that are produced most efficiently #
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Con factors, Destroys manufacturing jobs in wealthy advanced economies, wages rates of unskilled workers in advanced countries declines, companies move to fewer labor environment regulations, loss of sovereignty
How has globalisation affected my life? There is a shortage in the united states and demand for their services is growing twice as fast as the rate of graduation
Solutions to this problem is to send images over the internet to be interpreted by radiologist in India or employ radiologists from other countries
History
Outsourcing health care is not only limited to radiology, we see patients travel internationally for treatments as well as surgery (cosmetic surgery, dentistry, surgery and fertility treatment abroad.
In 2004 170,000 foreigners visited India for medical treatments the number grown about 15 percent each year
It is much cheaper for a set of tooth implants overseas costing up to 40,000 less than in Britain.
The EU planned to introduce rules that will allow dissatisfies British medical and dental patients to receive treatments in a member state of their choice and reclaim all or part of the cost from the NHS
What happens around and after 2007. Worldwide FDI flows slow down, Divestments were significant, More [FDI ]to developing countries, such as Africa, less to developed. WTO sees world trade decline 9%, the biggest contraction since WW2
The emergence of global institutions Globalisation has created the need for the instituions to help manage, regulate and police the global market place
- GATT
- WTO
- IMF
- World Bank
- United Nations
World trade Organisation
The successor or the general agreements of tariffs and trade GATT
- Primarily responsible for
- Policing the world trade system
- As of May 2007 there were 151 emember nations that collectively accounted for 97% of world trade. 153 meber natiopns in 2008 and 164 member nations in 2016
- The Doha agenda in 2001: agriculture, IPR, etc