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Globalization,definitions, facts and future.


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Home Assignment for International Management class at the Warsaw School of Economics.

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Globalization,definitions, facts and future.

  1. 1. Warsaw School of EconomicsInternational ManagementHome Assignment 1Topic: Globalization, descriptions, figures, numbers and opinion about the future of the trend.Prepared by Aleksey NarkoGlobalization is a huge process, as well as the word which is hard to explain. Differentprofessors, scientists and authors have their own definitions of globalization, however accordingto Dr. Nayef from the Geneva Centre for Security Policy defining this term is not as difficult as itseems from the beginning. He defines it as “a process that encompasses the causes, course, andconsequences of transnational and transcultural integration of human and non-human activities.”1Globalization, even stated as easy to explain, can have very contrasting meanings by variouspeople. For example Thomas Larson, Swedish Journalist states in his book The Race to the Top:The Real Story of Globalization (2001) as “the process of world shrinkage, of distances gettingshorter, things moving closer. It pertains to the increasing ease with which somebody on one sideof the world can interact, to mutual benefit, with somebody on the other side of the world”2,while Martin Khor, President of the Third World Network in Malaysia, referred to globalizationas colonization.3Globalization is the word that has more than a hundred of different definitions, however what ismore important is the effects it has on the people and world we live in. Globalization hasfacilitated lots of processes, for example according to the IMF over the past three to fourdecades, adult illiteracy rates have declined by 30 percentage points in China, Ghana, India,Korea, and Mexico, moreover it has changed the life trends such as life expectancy. In China ithas doubled over the last 40-50 years to the age of 70, in India- increased by 20 years, In the USby 7 years.4 Another research shows that the share of Foreign Direct Investment increased from6.5 percent of world GDP in 1980 to 31.8 percent in 20065, the value of trade (goods andservices) as a percentage of world GDP increased from 42.1 percent in 1980 to 62.1 percent in2007. Moreover due to the fact that national boundaries in fact are fading away the number offoreign workers has increased from 78 million people (2.4 percent of the world population) in1965 to 191 million people (3.0 percent of the world population) in 2005. MoreoverGlobalization has changed the world trade. According to the world bank over the past 30 years
  2. 2. exports have grown about twice as fast as GNP. Countries in transition have recognized thebenefits of globalization as well. World Bank states that only between 1990 and 1995 manyCentral and Eastern European countries saw the increase share of trade in GDP from 10% or lessto 20% more.6 Looking at all these different facts and figures globalization it can be called as a“rubric for a varied phenomena.”7When it comes to the future, I think that globalization will continue to surprise us with its results.The influence of national state on the way small companies and global corporations are doingbusiness will decrease due to the further disappearance of formal and actual barriers. Companieswill become even more internationalized, the number of born-globals, small, but ambitiouscompanies with entrepreneurial spirit will increase dramatically. From my point of view, therewill be a stronger trend for migration of workforce due to the increasing percentage of literacy ofpopulation in developing countries many people will change their places of living and workingand migrate more often to the states with more developed economies with bigger wages andbetter life. It can be seen even nowadays when people from Brazil are moving more and moreoften to Portugal, young people from Spain are searching for better life and jobs in Argentina,due to the lowering of wages and simply lack of Jobs. Therefore the population in the countrieswill be more mixed and will consist of people of different nationalities even in the countrieswhich were positioning themselves as strongly homogeneous such as Poland with increasingnumber of immigrants from Ukraine and Belarus due to the lack of relatively cheap workingforce and demographic problems. World organizations such as WTO, OPEC, NAFTA as well asinternational corporations such as P&G, Unilever and GE will gain a significant power comparedto the states where they operate which will continue losing pace and importance in human’s life.I think the possibilities for the enterprises to develop and grow quickly will increase due to evenstronger intents to use offshoring and outsourcing possibilities, easier usage of foreign directinvestment or operating internationally via subsidiaries due to the tax benefits or simply lowercosts in particular states. Moreover I support the idea of the moving global manufacturing centerfrom China to Africa, because of the increasing labor costs in the first and better opportunities inthe second region. The example of moving production facilities can be Thailand and Taiwan,were lots of goods were produced and later exported some decades ago, however this trend ischanging nowadays and more emphasis is put nowadays on doing business in China and SouthKorea. The great drawback of globalization nowadays as well as in the near future is that many
  3. 3. nations, minorities and tribes that exist today will continue losing their originality in the form oflanguage, customs and traditions. It can be observed even today that it is sometimes easier to finda shop of Zara or Macdonald’s restaurant in Europe, than buy and try something typical of thecountry you are living in or traveling to. However these are only my thoughts and opinions thatcan be wrong. World is changing and our life changes as well and this process is hard to predictas well as the next step of globalization, therefore we should always remember that “the onlyconstraint on mans future is his own imagination.”8References: 1. Nayef R.F. Al-Rodhan, Definitions of Globalization:A Comprehensive Overview and a Proposed Definition., June 19,2006. Available from: 2. T. Larsson,The Race to the Top: The Real Story of Globalization (U.S.: Cato Institute, 2001), p. 9. 3. Martin Khor, 1995, as cited in J. A. Scholte, “The Globalization of World Politics”, in J. Baylis and S. Smith(eds.),The Globalization of World Politics, An Introduction to International Relations (New York: Oxford University Press, 1999), p. 15. 4. International Monetary Fund, Globalization: The Story Behind the Numbers. March 2002, Volume 39, Number 1. Available from: 5. International Monetary Fund, Globalization: A Brief Overview., May 2008. Available from: 6. World Bank, Globalization and International Trade, Available from: 7. James H. Mittelman, “How Does Globalization Really Work”, in J. H. Mittelman (ed.), Globalization: Critical Reflections (Boulder, Colorado: Lynne Rienner Publishers, 1996), p. 2, as cited in I. Clark, Globalization and International Relations Theory (New York: Oxford University Press, 1999), p. 35. 8. Sheel A.,The Economic Times, The future of globalization,9 February 2009, Available from: globalisation/articleshow/4096586.cms