it gives you about globalization in economic view

1. THE
GLOBALIZATION
OF INDUSTRIAL
ACTIVITY
Mr. Yonas Gemeda
March2020
Addis Ababa, Ethiopia

2. Key terms
• Globalization
• Global shift
• New international division of labor
• Transnational corporation
• Foreign direct investment
• Deindustrialization

3. Globalization
• Globalization is the increasing
interconnectedness and
interdependence of the world-
economically, politically, and
culturally.

5. Global patterns
• Globalization is a recent
phenomenon (post 1960)
• The modern global economy is more
extensive and complicated than it
has ever been before.

6. Aspects of
globalization
• There are many aspects of
globalization:
• Economic
• Urban
• social/cultural
• Linguistic
• Political
• Demographic
• environmental

7. Economic Globalization
• The factors responsible economic
globalization are as follows:
• The production process has
changed rapidly in the last 50
years or so with the emergence of
a new international division of
labor.

8. Economic globalization
• What is new international division
of labor?
• The new international division of
labor divides production into
different skills and tasks that are
spread across regions and
countries rather than within a
single company.

9. Economic globalization
• The increasing complexity of
international trade flows as this process
has developed
• Major advances in trade liberalization
under the World trade Organization
• The emergence of an increasing NICs
• Dominance of free market in global
system
• The deregulation of world financial
markets
• The transport and communication
revolution

10. Advantages
• There are many advantages in
working at the global scale as
opposed to the national or
continental scale :
• Sourcing of raw materials and
components on global basis reduces
costs
• TNCs can seek out the lowest –cost
locations for labor and other factors

11. Advantages
• High volume production at low
cost in countries… reduce
inflation
• Selling goods and services to a
global market allows TNCs to
achieve very significant
economies of scale.

12. Transnational corporation
• A transnational corporation is a film
that operates in more than one
country.
• Transnational corporations are the
main source of foreign direct
investment
• TNCs have a substantial influence
on the global economy in general
and in the countries in which they
choose to locate in particular.

13. Foreign Direct Investment
• Foreign direct investment
companies overseas investments in
physical capital by transnational
corporations.

14. TNCs
• TNCS vary widely in overall size and
international scope. Variations
include:
• The number of countries
• The number of subsidiaries
• The share of production accounted
for by foreign activities

16. TNCs
• The degree to which ownership
and management internationalized
• The division of research activities
and routine tasks by country
• The balance of advantages and
disadvantages to the countries in
which they operate.

17. TNCs
• Large TNCs often exhibit three
organizational levels
• Headquarters
• Research and development
• Branch plants

18. Deindustrialization
• Deindustrialization is the long
term absolute decline of
employment in manufacturing

20. Deindustrialization
• The causal factors are :
• Technological change
• The filter down of manufacturing
industry from developed countries to
lower wage economies
• The increasing importance of the
service sector in the developed
economies

21. THANK
YOU!!!!!