DRIVERS OF THE GLOBALIZATION

Drivers of Globalization Process



Drivers of Globalization Process

Introduction

Globalization is defined as the process that enhances the interconnectedness of neighboring countries. According to Held and associates (1999), globalization is a concept that is brought about by and result to high cross-border trade flow, money, information, services, people as well as culture. RAWOO (2000), a research council in Netherlands, noted that globalization is the product of communication technology development and market capitalism. During the 70s, capital expansion used to be based on territorial and historical origins. However, this eventually increased as globalization took capital expansion away from national geographies. Aside from this, globalization was also introduced initially as the concept that allowed that transition of primary capital accumulation to the global level. This transition has begun as a large number of transnational companies (TNCs) became the dominant group over production and distribution, foreign direct investment and cross-border operations. Furthermore, the formation of several joint-ventures, mergers, takeovers and oligopolies also supported this change brought about by globalization (Díaz-Bonilla, 1999, pp.96-105).

Market drivers

The globalization of markets is intrinsically linked to the internationalization of the company. The main feature of this is the last time the speed and intensity with which this phenomenon is occurring.

The internationalization of economic activities is not a new phenomenon. In previous decades has been a continuous growth of international trade, helped by the success of negotiations for multilateral liberalization of tariffs. However, the recent trend of international integration is qualitatively different, because it is characterized by the intensification of economic ties that transcend national boundaries and often reflect strategic behavior at the firm level (Finger, 2000, pp. 511-25). Economic operations is increasingly developing into a borderless environment, in which the production, technology and marketing are linked into integrated value chains worldwide.

The first and the most important- there is a huge Demographic Transition which has already started but is going to intensify in the next four or five decades. . Most of the European countries , Japan and United States are going to have a higher proportion of aged population compared to the younger population and the Dependency ratio will rise. These countries will face labor shortages if they do not allow immigration into their countries. China is going to enter that phase a little later which is 2050 onwards (Fraser, 2000, pp.44-49). The only region where the proportion of the younger population is actually rising and will continue to have an upward trend is the South Asia region.

This is something which the policy makers in this region have to take cognizance of and prepare their respective national labor forces for taking over as work force of the globe. The more skilled our labor force is, the better off we will be in capturing a large share in the Global job market. So this demographic transition can become a huge premium, a plus, a potential for higher economic development for South Asia Region. And if we put our act together today then the chances for this generation of ...