1. Introduction to Globalization

2. What is Globalization in General?  Hendrick van den Berg: A Process that expands international trade, investment, and migration relative to national output, investment, and population growth  Thomas Friedman: The defining international system that replaced the Cold War  World becoming smaller and faster  Increasing irrelevance of national borders  Flat world

3.  The Lexus and the Olive Tree  Friedman’s 6 Dimensions (6 Ds) –Politics –Culture –National Security –Economic & Financial Markets –Technology –Environmentalism

4. 1. Political Changes  Eastern Europe –Berlin wall falls (November 9, 1989) –Soviet Union breaks up –NATO expands –EU enlarges  China –Openness (FDI, technology transfer, education) –Outsourcing of production –Economic progress has shifted power toward citizens  India –Openness –Outsourcing of services (English) –Economic progress has shifted toward citizens in certain localities

5. 2. Cultural Changes  English spoken “everywhere”  Internet allows current information to all –Hard for non-democratic governments to control information –Citizens see how others live and want it for themselves  Empowerment of individuals –Phones access internet

6. 3. National Security  Breakup of Cold War System  “Empowered” individuals –WTO Millennium Round Protests in Seattle, WA –Eventually round resumed in Doha, Qatar –Terrorists  Osama bin Laden

7. 4. Economic and Financial Effects  Freer trade since 1947 –GATT/WTO dominance by US & EC –System bias in favor of developed countries  Increased power for some multinational corporations –Mergers & acquisitions (M&A)

8. 4. Economic and Financial Effects  Freer movement of capital (esp. since 1970s) –Types  Foreign direct investment  Financial investment –Factors  Changes in rules by countries  Technology allows instantaneous movement of capital

9. 5. Technology  Personal computers  Software increasing productivity –Workers –Office staff  Internet (hardware)  World Wide Web (software)  Result: personal empowerment

10. 6. Environmentalism  Increased awareness of environmental issues –Pictures and information on web  Mobilization & coordination of environmental activists –Seattle & Millennium Round

11. What are Globalization’s Results? –Increased prosperity  Real per capita GDP (GNP) growth (average income) –+0.0001% per year for 200,000 years! –+0.05%, 1000-1820 –+0.5%, 1820-1870 (industrial revolution) –+1.3%, 1870-1913 (era of globalization) –+0.91%, 1913-1950 (isolationism & war) –+2.93%, 1950-1973 (openness, again) –+1.21%, 1820-1998

12. Globalization’s Results, cont. –Democratization  More individual control over own choices  More information via technology (internet)  More & varied opportunities

13. Globalization’s Results, cont. But… –Traditional lifestyles threatened –Less stability –Lack of ability to control own lives  Increased competition  Increased dominance of large corporations

14. © van Marrewijk, 2005