GLOBALISATION

Globalisation & SMEs

Globalisation & SMEs

Introduction

The purpose of this study is to expand the boundaries of our knowledge by exploring some relevant information relating to the analysis of globalization and its effects on SMEs. The word globalisation is originated from the word “global”. There are different meanings attached to word globalisation as per Mr. Jan Aart Scholte author of the book named as “Globalization”. The author Scholte has related the term globalisation with many other well known terms like universalisation, libralisation, Deterritorialisation, internationalisation and westernisation. The term globalisation can not be completely related to either economic or political process or worldwide capital flows or spanning of production. Globalisation covers all the above stated factors. The meaning of the term globalisation is different in view of different people. Nowadays, capitals flow and labour among corporations and countries with an extraordinary pace and amount. Consequently, production, service activities, capital flows, technological and commercial developments has attained international character. Currently, billions of dollars can be transferred by only by single “click” this is globalisation. Due to globalisation the foreign direct investment and multi-national companies have become more effective on individual economies level (Stiglitz, 2006, pp. 32-35).

Globalisation has linked all the countries in an emotional tie, which have made the countries closely linked with each other. There are people who are totally against the ever growing concept of globalisation. It is globalisation that has enabled countries to bring immense change in the quality of the products and services. The concept of free trade is the gift of globalisation that has enabled countries to trade their goods around the globe. Trade activities have grown so quickly among the countries therefore the need for strong legislation was required. Globalisation has helped a lot in making the companies follow the code of conduct while doing any trade activity with any other country around the globe. It is globalisation that has helped in raising the economic growth in poor countries and it also helped in reducing the poverty level of the world. A gigantic increase in worldwide interconnectivity is one of the major advantages of globalisation, which have removed the cultural, political and environmental barriers among the countries. However, global information revolution has also affected the social values and cultures of the countries to a huge extent. The involuntary facilitation of cross border crime has also found evolving due to globalisation (Stiglitz, 2002, pp. 124-234).

In United Kingdom, the export is an example of globalisation. From 1996 to 2006, UK export activity has benefited it due to growth and expansion of trading activity. The two services that contributed to growth of UK economy are; business services and financial services. The export activity increased because of technological changes in the world. In 2004, UK made contribution of 8.7 percent to the export activity. As it is mentioned that technology is a best example of globalisation in UK that has made it a leader in computer services (world export: 13.7 percent) and financial services (world export: ...