The main thrust of this paper is to explain the key drivers of globalization and to assess the impact of globalization on the developing countries such as Zambia. This paper will start by defining the key term Globalization. Thereafter; a comprehensive discussion on the main topic will follow and a conclusion will be drawn to wrap up the discussion.
Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture on political systems, on economic development and prosperity, and on human physical well-being in the societies around the world. Kaitila, V. 2002.
In other words, it may be defined as the extension of social relations across world-space, defining that world-space in terms of the historically variable ways that it has practiced and socially understood through changing world-time as more people across large distances becoming connected in more and different ways
Globalization is not something we can hold off or turn off…it is the economic equivalent of a force of nature – like wind or water” The first part of this research paper will define the major drivers the media and almost every book on globalization and international business speaks about different drivers of globalization and they can basically be separated into five different groups. Technological drivers, Political drivers, Market drivers, Cost drivers and Competitive drivers.
The major drivers of globalization and then introduce some of the basic and advance theories of international trade and business. With this foundation it will then try to integrate theories and drivers and compare them to the actual situation and discuss if they are appropriately describing what we are seeing today. Globalization had been used in its economic sense at least as early as (1944).
Is credited with popularizing the term and bringing it into the mainstream business globalization has inspired competing definitions and interpretation. Its antecedents date back to the great movements of trade and empire are cross the world. With early globalization, it was difficult for a state to interact with others that were not within a close proximity. Eventually, technological advances allowed states to learn of other’s existence and that is the phase of globalization. If a state is not dependent on another, then there is no way for either state to be mutually affected by the other. This is one of the driving forces behind global connections and trade; without either, globalization would not have emerged the way it did and states would still be dependent on their own production and resources to work. This is one of the arguments surrounding the idea of early globalization.
Globalization is primarily an economic process of integration that has social and culture aspects. It involves goods and services, and the economic resources of capital, technology and data. The stream locomotive, steamship, jet engine, and container ships are some of the advances in the means of transport while the rise of the telegraph and its modern offspring, the internet and mobile phones show development in telecommunications infrastructure. All of these improvements have been major factors in globalization and have generated further interdependence of economic and cultural activities. In 2000, the International Monetary Fund (IMF) identified four+ basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge. Further environmental challenges such as global warning, across-boundary water, air pollution, and over-fishing of the ocean are linked with globalization. The key drivers of globalization and international business they are in five different groups and these are:
Technological drivers’ technology shaped and set the foundation for modern globalization. Innovations in the transportation technology revolutionized the industry. The most important, developments among these are the commercial jet aircraft and the concept of containerization and telecommunications enable highly effective computing and communication at a low-cost level. The rapid growth of the internet is the latest technological driver that created global e-business and e-commerce technology have given all sorts of individual economic actor consumers, investors, businesses –valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets and collaboration with far-flung partners.
Political drivers Liberalized trading rules and deregulated markets lead to lowered tariffs and allowed foreign direct investments in almost all over the world. The institution of General Agreement on Tariffs and Trade. And the World Trade Organization. (WTO) 1995 as well as the ongoing opening and privatization in Eastern Europe are only some examples of latest development. Market drivers as domestic markets become more and more saturated, the opportunities for growth are limited and global expanding is a way most organizations choose to overcome this situation. Common customer needs and the opportunity to use global marketing channels and transfer marketing to extent are also incentives to choose internationalization. 4. Cost drivers sourcing and costs vary from country to country and global firms can take advantage of this fact. Other cost drivers to globalization are the opportunity to build global scale economies and the high production development cost nowadays.
Competitive drivers with the global market, global inter-firm competition increases and organizations are forced to “pay” international. Strong interdependences among countries and high two-way trades and FDI actions also support this driver. These drivers have made trade possible between countries since 15th century up to date. Globalization is intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa the process of word shrinkage, of distances getting shorter, things moving closer.
Globalization is playing an increasingly important role in the developing countries. It can be seen that, globalization has certain advantages such as economic processes, technological developments, political influences, health systems, social and natural environment factors. It has a lot of benefits on our daily life.
Globalization has created new opportunities for developing counties. Such as technology transfer hold out promises, great opportunities to access developed countries markets growth and improved productivity, and living standards. However, it is not true that all effects of this phenomenon are positive. Because, globalization has also brought up new challenges such as, environmental deteriorations instability in commercial and financial markets, increase inequity a cross and within nations. This paper evaluates the positive and negative impact of globalization on developing countries in the following proportions; Economic and Trade Processes Field, Education and Health Systems and Culture Effects.
Economic and Trade Processes Field
Globalization helps developing countries to deal with rest of the world increase their economic growth solving the poverty problem in their country. In the past developing countries were not able to tap on the world economy due to trade barriers. They cannot share the same economic growth that the developed countries had. However, with globalization the World Bank and International Management encourage developing countries to go through market reforms and radical changes through large loans. Many developing countries began to take steps to open their markets by removing tariffs and free up their economies. The developed nations were able to invest in the developing nations, creating job opportunities for poor people. For example, rapid growth in India and China has caused world poverty to decrease.
It is clear to see that globalization has made the relationships between developed countries and
developing nations stronger, it made each country to depend on another country.
According to Thirlwall 2003 “developing countries depend on developed countries for the resources to flows and technology, but developed countries depend heavily on developing countries for raw materials food and oil and as market for industrial good”. One of the most important advantages of globalization are goods and people are transported easier and faster as a result free trade between countries has increased.
Education and Health Systems
Globalization contributed to develop the health and education systems in the developing countries. We can clearly see that education has increased in recent years, because globalization has catalyst to the jobs that required higher skills set. This demand allowed people to gain higher education. Health and education are basic objectives to improve any nations, and there are strong relationship between economic growth and health and education systems. Through growth in economic, living standards and life expectancy for the developing nations certainly get better. With more fortunes poor nations are able to supply good health care services and
sanitation to their people.
Globalization has many benefits and detriment to the culture in the developing countries. Many developing countries cultures has been changed through globalization, and became imitate others culture such as America and European countries. Before globalization it would not have been possible to know about other countries and their cultures. Due to important tools of globalization like television, radio satellite and internet, it is possible today to know what is happening in any countries, America, japan. Moreover, people worldwide can know each other better through globalization. However, globalization could have negative impacts also in these fields; globalization facilitates the spread of new diseases in developing nations by travelers between countries. Due to increased trade and travel, many diseases like HIV/ADIS, Swine flu and many planted diseases, are across borders. Kurdistan, 2010.
As we can see, the process of globalization has involved all the countries around the world. Developing countries such as India, Africa, Lebanon and Jordan have been affected by globalization, and whether negatively or positively, the economies of these countries have been improved under the influence of globalization. The size of direct foreign investment has increased a lot of bad habits and tradition erased, but also globalization has brought many drawbacks to these countries as well. Many customs and cultures are disappeared such as traditions clothes and some language and expressions have changed. However, although globalization has many disadvantages, we believe that globalization has brought the developing countries many more benefits than the detriments, for example, we can see there is more and a biggest opportunity for people in both developed countries and developing countries to sell as many goods to as many people as right now, so we can say this is the golden age for business, commerce and trade.
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Thirlwall. A. P. (2003). “Growth and Development with special reference to developing economies,” (7th ed) Palgrave Macmillan: New York.
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