Monday, 18 March 2013

How Global are we?

Profs. Shruti Jain and Shweta Dixit write...

The authors can be contacted at:,

The increasing pace of ICT development, the shifting markets with the changes in global consumer tastes and preferences, emergence of global brands and MNCs and their worldwide operations, the process of continuous upgradation of the industrial economies, and the liberalization policies pursued by the developing nations are among the forces which are transforming the global economy and its trading pattern.

The internationalization of the world economy has been rapid during the last two decades. Besides trade, there is now a greater and multiple flow of capital, labour, information, technology and organisation of the production process itself across borders.

As a result of Globalization, the opportunities for World Trade Expansion have been greater than ever. Children in Pakistan wear Levi’s, the Chinese have satellite Television; the American housewives stretch their budgets by purchasing less expensive goods imported from china and register a complain about their microwaves in a call center in India. Business from all over the Globe has crossed the national borders and invaded global Markets. An average Indian citizen nowadays start his daily routine using Colgate Palmolive, has corn flakes from Kellogg’s as Breakfast, drives a Santro, or  a Volkswagen; spends a day on Samsung galaxy tab, IBM computer and Hitachi Air conditioner, and evening is to be spent with a Sony T.V. So every activity is having a glimpse of globalization. Fueled by Information technology and rapid strides of liberalization made by nations, International Business is no more a strategic choice with organizations, it is an integral part of their business to sustain a competitive position in the market place.

We seem to be witnessing the globalization of markets and production. With regard to the globalization of markets and production, we are moving away from an economic system in which national markets are distinct entities, isolated from each other by trade barriers of distance, time, and culture, and toward a system in which national markets are merging into one huge global marketplace.

The tastes and preferences of consumers in different nations are beginning to coverage on some global norm. Thus, in many industries it is no longer meaningful to talk about the “German Market,’’ ‘the American market,” or the “Japanese market”; there is only the “global market”. The global acceptance of Coca-Cola, Levi’s jeans, Apple I-pads, and McDonald’s hamburgers, and continuously increasing facebook users exemplifies this trend.

Today, globalization involves numerous features, but the following three seem to be the main engine driving global economic integration:

a.    Internationalization of production accompanied by changes in the structure of production
b.    Expansion of international trade and services
c.     Widening and deepening of international capital flows

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