ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

What is Globalisation?

Updated on November 25, 2017
varsha bang profile image

Varsha is an enthusiastic writer who loves to share informative content. She loves to write about political and social issues.

What is Globalisation?

Globalisation means integrating the economy of the country with the world economy. As a result of globalisation international markets regarding goods, services, technologies, finance and labour are integrated. National economies are thrown open to the market forces of the world and the scope of government's national macro economic policies is curtailed. In short, free flow of economic transactions across the political boundaries of nations or borderless trade is globalisation.

In a broader sense, globalisation is the expansion and intensification of connections and movements-of people, goods, capital, ideas and cultures-between countries. To some people, this process implies the need to replace national institutions with the global ones. A more integrated global system has also increased consciousness of such shared problems as pollution, disease, crime and terror, which many have come to believe can only be dealt at the global level. Most broadly, globalisation is the expansion and intensification of linkages and flows across borders.

While globalisation is primarily considered as a synonym for global business comprising of four aspects-trade, capital investments, movement of people and spread of information technology, it is much more than that. The same forces that allow businesses to operate also allow social activists, labour organisers, journalists, academics and many others to work on a global stage. However, technology and trade are considered the two leading forces in globalisation. Technology provides the mechanisms that make globalisation possible and trade is globalisation applied.

According to the International Monetary Fund," Globalisation is characterised by increases in flow of trade, capital and information, as well as mobility of individuals across borders."

Liberalisation is also an offshoot of globalisation. It implies freedom to the entrepreneurs to establish any industry, trade or business venture. De-control, deregulation and de-licensing are its buzzwords. It insists on free capital markets which are open to private as well as foreign enterprises.

Privatisation means that the ownership of any entity is transferred from public to private sector. It gives priority to the role of private sector instead of public sector.


Characteristics of Globalisation

  • Integration of domestic economy with the global economy.
  • Opening up of the economy to foreign capital, foreign investment, foreign technology and free competition.
  • Free international trade with liberalised approach towards exports and imports. Removal of all tariffs and non-tariff restrictions.
  • Expansion of multinational corporations.
  • Free flow of international capital and other economic transactions across the political boundaries of the nations.
  • Information technology is integral to the process of globalisation.
  • The scope of the process of globalisation has been increasing rather than narrowing over time, taking on cultural, political, social and environmental dimensions in addition to the economic.
  • Several international institutions including the WTO, World Bank, IMF and UN agencies play an important role in the process of globalisation.
  • Thus, globalisation is characterised by skrinking space, shrinking time and disappearing borders. It has swung open the door to opportunities.

Factors Responsible for Globalisation

Major causes of emergence of globalisation are:

  • Policies of Liberalisation: Pursuance of policies of liberalisation by different countries in the post-communist era mainly account for the growth of globalisation. As a result of these policies, restrictions on international economic transactions were removed. With the removal of these constraints, road to globalisation was all clear. First, impact of openness was witnessed in world trade (in goods and services). It was followed by foreign direct investment and financial sector.
  • Technological Revolution: Revolution in the spheres of transport and communication has converted the world into a global village. Jet aircrafts, computers, satellites, internet, e-commerce, e-mail and information technology all have served to remove frontiers of time and space. Besides, the cost of transmission and reception of information has fallen considerably.

  • New Forms of Industrial Organisation: Development of new managerial techniques in the industrial organisation has also accelerated the process of globalisation. Owing to technological advancement mentioned above, falling share of wages in the cost of production, increasing importance of mutual closeness between producers and consumers, etc, firms are in a dilemma to choose between foreign trade and foreign direct investment to participate in expanding international sector.
  • Failure of Soviet Socialist Model: In the late 1980s and early 1990s, centrally planned and command economies of the Soviet Union and East European countries miserably failed. By 1991, communist system collapsed in these countries due to dismal economic performance, controlled markets and closed door policy. After the failure of Soviet Socialist Model, all these countries adopted Western model of free market economy, policies of liberalisation and globalisation.
  • Example of Some Developing Countries: Experience of some Asian developing countries also promoted the idea of globalisation. These countries were South Korea, Thailand, Malaysia, Taiwan, Hong Kong and Singapore who by adopting the policies of liberalisation and globalisation achieved new heights of economic success. Their economic success story earned for them the name of "Asian Tigers". China also succeeded in achieving high rate of economic growth by resorting to the process of globalisation. These success stories inspired other countries to globalise their economies.

  • Role of USA: After the triumph of the US in the Cold War, it proved to the world that the Western capitalism and liberalism are far superior to socialism and communism. After the victory of capitalism, the US pursued the liberal foreign policy of enlargement of free market democracies more vigorously. Countries of the world started following the bandwagon of the US. Since 1945, America has been emerging as a super power in the world polity. Disintegration of the Soviet Union, collapse of communism and triumph of capitalism elevated the status of America to a sole super power. Political supremacy of the US has also been instrumental in hastening the process of globalisation.
  • Role of International Institutions: Several International institutions namely, the WTO, IMF, World Bank as well as UN agencies such as ILO, UNDP, UNCTAD, etc have also created an international environment in which the process of globalisation may flourish. With the formation of WTO in 1995, this process was accelerated. It is the primary rule making body of the globalisation process. The United Nations Organisation (UNO) also plays a key role as a central pillar of the international system in the management of global economic integration.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)