Growth of Globalisation - Coursework Example

Name: Professor: Institution: Course: Date: Globalization in a nutshell may be described as the opening of the local and international boundaries round the world to allow free trade of goods, services and capital nationally. Although the movement of labour is excluded as part of the goods in transit, economists have suggested that, if instituted the smaller economies would end being victims and bear loss (LCC 2010). The word Globalization consists of a broad range of categories which include technology and migration which are part of the elements that differentiate a countries lifestyle and culture. However, in spite of the different cultures and unique set up of the different countries, globalization has come to link them up as a meshed object or equipment, making them integrated in one way or the other. Globalization is further broken down into five social elements which are biological, socio-cultural, technological, political and economic. This means that once a country starts to integrate with each other in the process of trade, the culture of one country may the affect the other to a great extent even though the countries are totally different in regards to their culture and practice. Eventually, both countries with time discover that their economic, political, social and biological status are deeply rooted and integrated to each other. The origin of globalization can be traced back to thousands of years where people would cross from their country to another for long distances in the name of trading items which were not available in their country such as the famous Silk Road through to central Asia. The road was used as a link between Europe and China (Manfred, 2010) In today’s world different corporations depend entirely on other organizations for their goods and products production. All this has been necessitated by the rapid growth of technology and national trade which was initially simply started as just the exchange of goods and services. Other researchers have described globalization as simply the process of unifying different countries through the elimination of international barriers as strict tariffs, import quotas and export fees. The aim of the trade is to access goods and services as well as get wealth through increased competition globally and specialization. Through this integration, economies regionally can now communicate more frequently with each other on the process of transportation as well as through trade. The term globalization is similar in meaning to economic globalization which is defined as the integration of international countries through foreign direct investment, trade and technology growth. However, the five factors of globalization are the drivers of integration as opposed to economic globalization. The countries that are referred to as globalized have undergone through new languages and adoption of a different culture (Frank 2009) . The environment in today’s context can be enhanced through the participation of other countries which can support the process of trade by investing widely. The process has been known to be beneficial to those who participate by risking conducting business across their boundaries although in every business there are always losers and gainers at the end of the day when terms and conditions change or when external and internal environmental factors affect the business chain. It is conferred that, Globalization can be related to breathing, meaning that once stopped there are consequences that may emerge which would not be pleasing to handle. A good example that is dated back to the 15th century is the House of Rothschild fortunes who were the first to conduct business from London to Brussels. Another major breakthrough is the reduction of the number of days from ten to three through the use of telegraph mode of communication between London and New York. The distinguished industrialized countries received tremendous change in boosting globalization immediately after World War II which lowered the existing trade barriers. Many nations have thus embraced the change and accelerated industrialization in the recent years (Frank 2009) The growth of major industrialized nations in the last fifty years has been set the pace for upcoming investors to boost the economy, for instance the per capita annual growth is currently ranging between 5 and 8 percent. This is compared to a country like Britain which in the 19th Century the per capita average growth rate ranged between 1.5 to 2 percent annually. The growth has been facilitated by the access to a ready market that is accessible and with a variety of goods and services. The environment has also provided facilities that are supportive and that are available when required. They include insurance, communication and financial resources which are very expensive for the growing countries but with globalization being rapid the country’s economic growth has been boosted and they are no longer at the loosing edge. The growing countries have benefited from the already industrialized countries which have put in place systems of trade and laid down blue prints which are easily accessible and available. Through improved telecommunication, the costs of communication and transportation have declined. For instance, Korea in the last 3 decades has risen from seventy per cent rural economy to a seventy per cent urban country and this has been possible because of the international economy. Other nations like India have also joined recently transforming their economy to a well informed region. The well being of the population has been changed by the rapid growth of Globalization and the standard of living has also changed than ever before in the world’s history. The more the income people can access the more they are willing to spend on their basic needs and wants. Research has indicated that the rates at which infant mortality have been on the decline averages in 1950 between 175 per 1000 births to 55 per 1000 births. The level of illiteracy has fallen in the recent decade and more than ever before in history, we have the literacy level on the rise to seventy percent. Though there has been observed that some countries continue to record high population growth rate, poverty has also been reduced. Currently as a result of the giant tiger China growth as well as India, the number of people living in less than a dollar has declined to about 200 million. The growth of these emerging markets has thus contributed to a great extent to the growth of Globalization. They include Argentina, Indonesia, Argentina, South Africa, Brazil, Turkey, Poland, and Mexico among others as tabulated by the U.S department of Commerce (Rahul 2007). Harris (2010) argued that Globalization has grown as a result of three aspects which are the change in technology, rapid growth in the size of developing countries and reduction in the trade barriers. Trade agreements were developed by each country to govern how foreign trade would be carried out but they eventually resulted to tariff wars in the 1930s. Later nations developed a consensus to remove the arbitrary barriers that limited their freedom in regards to trade. Some of the agreements that were developed are the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement and the European Community. The purpose of GATT was to ensure that the barriers existing between nations were eliminated. More nations continued to join by signing up and participating in trade. The agreement was launched as early as 1947 with only 23 nations singing but the number has continued to grow. The world’s ever ambitious agreement is the Uruguay Round of GATT which lowered barriers on agriculture goods and textiles for over 105 countries. It further opened doors for insurance companies, banks and protected the intellectual property of one another (Louis 2008) The second agreement which is European Community consists of twelve member nations which have eliminated the borders that exist internally to enhance trade relations. This agreement has impacted on the distribution, marketing and production of goods and services. Paris and Rome were the initiators of the European Community which dismantled the existing economic barriers between their trade processes. The signed treaty between the two countries was to ensure that they established and ground firmly a common economic, agricultural, custom tariff, transport and policies governing nuclear development. The third trade agreement is NAFTA which governs the way business is carried out in the United States. Only three nations are involved in this agreement, which are Canada, Mexico and United States. The agreement aim is to regulate the creation of jobs and prices of products. Mario et al. (2010). Other agreements continue to be established between nations, which have improved the standard of living through promotion of trade and improved economic standards. Thus Globalization has been accelerated by the formation of these agreements. Technology has also contributed immensely to the growth of globalization. Communication which is essential during trade negotiations has improved the free flow of information even for those countries that could not be accessed easily. Pete Engardio (2007) commented that even the incommunicado nations have now established telecommunication that can only be referred to as the state of the art whose aim is to improve the quality of foreign investment. The latest developments can be traced to the installation of fiber optic cables, wireless transmission systems and digital switches in Beijing and Budapest has been the way forward even for other nations. Other forms that have formed a platform for quality communication are video conferencing, digital mobile phones and electronic data interchange which have spread to major parts of Eastern Europe and Asia. The developing nations have embraced the latest technology as a reactor to accelerate their economic development. Countries like Latin America and Asia may take a decade to establish good supply of power and develop infrastructure but with the emergence of telecommunication the bottleneck will no longer be a disadvantage for the two nations. The growth in Globalization has not been without drawbacks such as the observed decline in fuel resources which has continued to grapple across nations. This has been as result of the rise in consumption but the reserves are still flowing with more supply despite the rise but the prices have continued to escalate which is a major concern for the developing concern. Research and development is the only major process that will initiate a breakthrough in increasing the production rate. The environment has also been on the receiving end of deterioration regardless of the efforts being made to go green by developed countries. Pollution is a major bottleneck and the hazardous toxins emanated from the industries continue to be a threat and depletes the financial resources in regards to the cleaning expenses which amount to more than 4500 dollars. Further the social and labor conditions in the developing world have deteriorated as a result of increased production with meager pay though some nations have improved the standards of their workers through increased wages, for instance a factory in Vietnam that sells footwear. Child labour has also continued to be observed where poverty in the developing countries has been the driver of such conditions. This is as a result of lack of finances to educate the children who end up in prostitution as a quick way to make money. In Australia, the businesses managers and consumers have the opportunity to grow in terms of cultural diversity and how to manage their businesses. Companies that continue to be the leaders in foreign trade are beneficiaries of homogenized globalization pressures regardless of the issue at hand whether economic, social, cultural or environmental. The Companies in Australia have thus observed expansion of their markets through the leadership of cultural diverse managers. The managers are known to introduce innovative ideas to the businesses increasing the number of goods exported globally. For instance, the double handle saucepan that is exported to Asia the improvement of cuisine meals on airlines which have to a greater extent marketed and improved tourism. This has increased and accelerated the growth of Companies in Australia and trust between the nations which they regularly trade with frequently. The cultural diverse managers are known to be good communicators across multinational countries. As a result of their different backgrounds, ethnicity, culture and skills they tend to be more creative, though Australian Companies have been observed to be slow in investing on knowledge. David Kaprin (2008) argued that Australian Companies concentrate more on reduction of production costs to maximize their returns than in knowledge investment. Globalization in Australia has made it possible for Companies to pay detail attention on the level of competence knowledge of their workers. Thus Companies should be ready to set finances on training and investing more on their employee’s knowledge to stay at par with the competition which is very stiff and for any Company to survive they should focus more on the external factors which can run down the business. The rate at which telecommunication is spreading the lines of communication have opened up and the consumers are at a gaining end. Consumers can today purchase and shop online at bargain able prices. The access to internet reduces the time spent by consumers while shopping because today with the click of a button it’s possible to even order perishables and other goods and services to The access to internet reduces the time spent by consumers while shopping because today with the click of a button it’s possible to even order perishables and other goods and services to be delivered at your door step. Globalization has also improved the standard of living of workers who have secured jobs locally and internationally. Opening of lines in communication between developers and employees in Australia have contributed to the reduction in production costs by 15 per cent. (Hauschild, 2001) Consumers also enjoy quite a variety of goods and services from foreign countries which are not readily available in Australia. Investors who are willing to export to other countries have an open market to carry out their trade without any barriers which hindered their transactions. To a greater extent the business people in Australia have an upper hand when it comes to globalization and through the breaking of trade barriers it is possible for the economy to be transformed and be among the leaders of international world trade. In conclusion, as the nations continue to become more globalized, the economy will continue to increase the GDP rate because of the rapid growth of developing countries, the technology dynamism and the generation of better improved trade agreements and treaties between nations. Since the arguments against globalization are far not so disastrous and efforts being made continue to bear fruits, the growth will be fostered efficiently by the above factors which spearhead the rise of economic growth. All nations should embrace the growth of Globalization as an element of success in the breakthrough of innovation and foreign trade. References David Kaprin (2008), Business Review Weekly. Retrieved on 6th August 2011 http://www.brint.com/km/davenport/working.htm Frank J. Lechner, (2009), “The making of World Society” Blackwell Publishing – United Kingdom Hauschild, (2001), p 66, Business Review Weekly Retrieved on 6th August 2011 http://www.brint.com/km/davenport/working.htm LCC (2010) Meaning of Globalization, Retrieved on 6th August 2011 from http://livingartsoriginals.com/meaning-of-globalization.html Louis S. Richman (2008) “Dangerous Times for Trade Treaties,” Retrieved on 6th August 2011 from www.trenton.k12.nj.us/technology/profiles/tchs/.../BoundReport-md.do Manfred Steger, (2010), “Globalization” Sterling Publishing Co. Inc. Canada Mario Bognanno et al. (2010). North American, Free Trade Agreement. Retrieved on 6th August 2011 from www.trenton.k12.nj.us/technology/profiles/tchs/.../BoundReport-md.do Pete Engardio (2007) “Third World Leapfrog,” Business Week (May 18, 1994), p. 47. Rahul Jacob,(2007). “The Big Rise,” Fortune (2011), pp. 74 -75. Robert K. Schaeffer, (2011) Understanding Globalization (Lanham, MD: Rowman & Littlefield Publishers, Inc., ), p. 1. Richard G. Harris, (2010)“Globalization, Trade, and Income,” Canadian Journal of Economics, p. 755 Read More