Driving Force Of Globalization Essay Prompt
Globalization is driven by various new development and gradual changes in the world economy.
Generally, organizations go global for expanding their markets and increasing their sales and profits. One of the major forces of globalization is the expansion of communication systems.
In the present era, it has become easy to distribute information to any part of the world through the Internet.
Some of the important forces behind globalization are shown in Figure-1:
The different forces (as shown in Figure-1) are explained as follows:
(a) Advancement of Technologies:
Refers to one of the crucial factors of globalization. Since 1990s, enhancement in telecommunications and Information Technology (IT) has marked remarkable improvements in access of information and increase in economic activities. This advancement in technologies has led to the growth of various sectors of economies throughout the world.
Apart from this, the advancement in technology and improved communication network has facilitated the exchange of goods and services, resources, and ideas, irrespective of geographical location. In this way, advanced technologies have led to economic globalization.
(b) Reduction in Cross-trade Barriers:
Refer to one of the critical forces of globalization. Every- country restricts the movement of goods and services across its border. It imposes tariffs and quotas on the goods and services imported in its country. In addition, the random changes in the regulations create a chaos in global business environment.
Such practices impose limits on international business activities. However, gradual relief in the cross-border trade restrictions by most governments induces free trade, which, in turn, increases the growth rate of an economy.
(c) Increase in Consumer Demand:
Acts as a main driver to facilitate globalization. Over the years, with increase in the level of income and standard of living, the demand of consumers for various products has also increased. Apart from this, nowadays, consumers are well aware about products and services available in other countries, which impel many organizations to work in association with foreign players for catering to the needs of the domestic market.
(d) High Competition:
Constitutes an important driver for bringing about globalization. An organization generally strives hard to grain competitive edge in the market. The frequent increase in competition in the domestic market compels organizations to go global. Thus, various organizations enter other countries (for selling goods and services) to expand their market share.
They export goods in foreign markets where the price of goods and services are relatively high. Many organizations have achieved larger global market shares through mergers and acquisitions, strategic alliances, and joint ventures. So, these are the major factors that have contributed a lot in globalization and the growth of global economy.
Technology Is the Driving Factor for Globalization Essay
1333 Words6 Pages
While capitalism is characterized by its relentless expansion, always trying to overcome limits of time and space, it was only in the late twentieth century that the world economy was able to become truly global on the basis of the new infrastructure provided by information and communication technologies ( Castells, 2000: 101).
It is interesting to analyze the way the rise of the new global economy came nearly at the same moment of the introduction of new communication and information technologies, such as the internet and satellite communication networks. Many of the features of capitalism rely on the usage of new technologies. Furthermore, according to Manuel Castells, this new economy emerged ‘because the information technology…show more content…
Within an economic perspective, Castells (2000) argues that technology has the power to determine the capacity of productivity and organization of society. Information is power, and technology provides information. Therefore, Castells was interested in analyzing the way this new economic system is emerging as a ‘transitional form toward the informational mode of development’ ( Castells, 2000: 78) which is most likely to characterize the coming decades.
Throughout history one can point out the important role in which technology plays to the increase of productivity and consequently to the generation of economic growth. In his study, Castells was interested in analyzing if in fact technology was linked to the increase of productivity or not and if productivity is an indicator of the wealth of nations. His study revealed that ‘in a long term productivity is the source of the wealth of nations. And technology, including organizational and managerial technology, is the major productivity factor’ ( Castells, 2000: 94). Therefore, productivity is able to generate wealth to the nation. Nevertheless, the most important component in the process of productivity is technology. However, Castells also points out the fact that firms and nations are not interested in technology or productivity to help humankind. What they are actually interested in is, clearly, profitability. For that reason, ‘profitability and