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Globalization
What is Globalization
History of Globalization
Since Western
discovery of Americas
1492 Christopher Columbus
Old World (Europe, Asia,
Africa) meets New World
Literally global relations:
- trade, war, migration, etc.
History of Globalization
Since beginnings of human history
- mankind spreads out from East Africa
- one million years ago
- humans reach every part of the planet
- reach southern tip of South America
c. 10,000 BC
Globalization Of Markets
The globalization of markets refers to
the merging of historically distinct
and separate national markets into
on huge global marketplace . .
1)In US ,nearly 90percent of
firms that export are small
business that employ less than
100 people,and their share of
total US exports has grown
steadily over the last decade
and now exceeds 20 percent..
2) Firms with less than 500
employees accounted for 97
percent of all U>S exporters and
almost 30 percent of all exports
KFC China
Mac Europe
The Globalization Of
Production
It refers to the sourcing of goods and
services from locations around the globe .
To take advantage of national differences in
the cost and quality of factors of
production.
I. This helps the companies to lower their
overall cost structure.
II. Improve the quality or functionality of
their product offering , therby allowing
them to compete more effectively.
8 Japanese suppliers
make parts for the
fuselage,doors and
wings .
A supplier in Singapore
makes the doors for the
nose landing gear .
Three suppliers in Italy
manufacture wings flaps
.
In total 30 percent of the
777 by value is built by
foreign companies .
With 787 Boeing is
pushing this trend
even further with
some 65 percent
of the total value
of the aircraft
outsourced to
foreign
comapanies ,35
percent given to
Japan based
As of 2 March 2013
WTO has 159
members.
Total merchandise
trade value
$18,323,000
billion.
Indias contribution
$2,93,213.5 billion.
WTO accounts for
97% of world
USD Billion
20000000
18000000
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
World
EU
China
US
India
Drivers Of Globalization
Two macro factors seem to underline
the trend toward greater
globalization.
Decline Trade and Investment
Barriers
Technological change
DOHA AGENDA
I. Cutting Tariffs on industrial
goods , services , and
agricultural producers
II. Reducing barriers to crossborder investment
III. Limiting the use of
antidumping laws .
The biggest gain may come
from discussion on
agricultural products.
The rich nations spend some
$300 billion a year in
subsidies to support their
farm sectors .
456
in 2012.
27
WTO members
filed 27 new
disputes
Microprocessors
The single most
important innovation
has been development
of the microprocessor.
It enable the explosive
growth of high power ,
low-cost computing .
It is the latest
expression of
development .
In 1990 fewer than
1million users.
In 2012, 39% of world
population uses
internet.
Transportation technology
In addition to developments in
communication technology, several major
innovations in transportation technology
have occurred since world war II.in economic
terms the most important are probably: development of commercial jet aircraft &
superfighters.
Introduction to containerization, which
simplifies transshipment from one mode of
transport to another.
Containerization
Dell
A world communications network has become
essential for many international businesses.for
example: Dell uses the internet to coordinate and control a
globally dispersed production system to such an
extent that it holds only three days worth of
inventory at its assembly locations.
Dells internet based system records orders for
computer equipment as they are submitted by
customers via the companys website,then
immediately transmits the resulting orders for
components to various suppliers around the world,
which have real time look at dells order flow &
can adjust their production scedules accordingly.
Non-U.S. MNCs
In the 1960s, global business activity
was dominated by large
U.S.multinational corporations.
With the U.S. firms accounting for
about 2/3rds of FDI during the 1960s,
one would expect most MNCs to be
U.S. enterprises.
Developed Countries
Asia
1652
1409
1351
820 735
696 637
436
401
2010
2011
561
703
2012
407
Developed economies
Asia
1678
1505
1391
1183
1030
413
2010
909
284
422
2011
311
426
2012
308
Ranking
China(2)
US (1)
0
20
40
60
80 100
120 140
160 180
Negative Effects
Globalization has been one of the
most hotly debated topics in
international economics over the
past few years.
Inequality
Environment Degradatio