Globalization BA 527 International Marketing Melike Demirbag Kaplan, PhD

Globalization

Globalization at a glance

Definitions  Process in which the constraints of geography recede and in which people become aware that they are receding…  Widening, deepening and speeding up of worldwide interconnectedness in all aspects of life….  Process by which networks of interdependence become large and continuous, or “thick”….  The movement towards the expansion of economic and social ties between countries through the spread of corporate institutions and the capitalist philosophy…

The world before globalization  Distance mattered— space often measured in time  Territorial boundaries more or less kept things in and out  Society and culture had spatial referents  Everything had its “place” (literally)

Deterritorialization and supraterritoriality  Distance becomes almost irrelevant (the end of distance)  Boundaries are increasingly permeable  Groups and cultures increasingly don’t have a territorial basis  A new kind of non- physical “place” is emerging

Globalization is  a quantitative and qualitative change  not only economic  4 facets:  Space - extensiveness of global networks  Regularity - intensity of global interactions  Speed - velocity of global flows  Depth – impact of global interconnections on quality of life

Historical Forms  21st century “thick globalization”  high extensity, intensity, velocity and impact  Western imperial expansion (18th century)  high extensity, impact; low intensity, velocity  Silk and luxury trade (200 BC-200 AD)  high extensity; low intensity, velocity, impact

Dimensions of Globalization  Economic Dimensions  Socio-cultural Dimensions  Political Dimensions

Economic dimension  One of the most frequently used in discussions of development, trade, and international politics.  A process by which the economies of the world become increasingly integrated, leading to global economy and, increasingly, global economic policymaking, for example, through international agencies such as WTO, IMF, and WB.

Integration of Economies  The increasing reliance of economies on each other  The opportunities to be able to buy and sell in any country in the world  The opportunities for labor and capital to locate anywhere in the world  The growth of global markets in finance

Made possible by  Technology  Communication networks  Internet access  Growth of economic cooperation – trading blocs (EU, NAFTA, etc.)  Collapse of communism  Movement to free trade

World Trade

World GDP

World GDP- by region

Global trade  Benefits of Trade:  Increased choice  Greater potential for growth  Increase international economies of scale  Greater employment opportunities  Disadvantages of trade:  Increase in gap between the rich and the poor  Dominance of global trade by the rich, northern hemisphere countries  Lack of opportunities for the poor to be able to have access to markets  Exploitation of workers and growers

Socio-cultural dimensions  Social globalization means processes whereby many social relations become relatively delinked from territorial geography, so that human lives are increasingly played out in the world as a single place.  Cultural globalization refers to an emerging “global culture”, in which people more often consume similar goods and services across countries and use of common language.  Examples: Coco-Cola, Mc Donald and use of English.

Political dimension  Refers to the increasing number and power of human associations which influence or govern the world as a whole.  Emergence of a transnational elite and the phasing out of the nation-state  In 1909 there were 37 inter-governmental organizations (IGOs) and 176 international non-governmental organizations (INGOs  In 1996 there were 260 IGOs and 5,472 INGOs

Advantages and Disadvantages of Globalization

World GDP-distribution inequality

UN Millenium Project “ More than one billion people in the world live on less than one dollar a day. In total, 2.7 billion struggle to survive on less than two dollars per day. Poverty in the developing world, however, goes far beyond income poverty. It means having to walk more than one mile everyday simply to collect water and firewood; it means suffering diseases that were eradicated from rich countries decades ago. Every year eleven million children die-most under the age of five and more than six million from completely preventable causes like malaria, diarrhea and pneumonia. In some deeply impoverished nations less than half of the children are in primary school and under 20 percent go to secondary school. Around the world, a total of 114 million children do not get even a basic education and 584 million women are illiterate.”

Anti-globalization movement  Is critical of the globalization of corporate capitalism.  Opposition to international financial institutions and transnational corporations  Global opposition to neoliberalism  Anti-war movement  Anti-consumption movement