1. Globalization and Australia
Globalization and Australia
Alan Oxley
Australian APEC Centre, Monash

2. Three aspects The impact of globalization What is globalization
Impact on Australia

3. What is the impact of globalization?

4. The wealth gap is narrowing
Gap between richest 20 percent and poorest 20 percent falls from 15 to 1 in to 13 to 1 in i.e. by 10 percent

5. Incidence of poverty is falling
1987
1998
East Asia
26.6%
15.3%
(- China)
23.9%
11.3%
Europe/Central Asia
0.2%
5.1%
Sub-Saharan Africa
46.6%
46.3%
WORLD
28.3%
24%

6. Quality of life improving
1970
1990’s
People undernourished
920m
810m
Average life expectancy 58 66
Infant survival rates/1000 44 67
Global literacy
80%
67%bb

7. Countries open to trade grow faster

8. The evidence shows that the poorest people within countries share in the gains from national income growth. Generally, as a country ’s average income rises,the poorest share proportionately in those gains. More specifically,the poorest 20 per cent in an economy gain by the same percentage as the country does. And as a country ’s average income per person rises,the proportion of its population living in extreme poverty falls.

9. What is Globalization?
Defining it
The drivers
The effects

10. Defining globalization
An open economic system
Non-discrimination
Global brands
Global structures

11. The Drivers Cheap travel Trade liberalization Information technology
High technology

12. Exports % share of world production

13. Annual % Growth of trade and GDP 1959 – 96

14. US investment now more global
Percentage of foreign stocks held by US investors
1975
1996
One percent
Ten percent

15. Effects of globalization
On business
On work

16. Effects of globalization on business
Cheap offshore production
Reduced transport costs
Virtual communication
Standardization of logistics
Global marketing

17. Bigger and smaller
Greater scale in manufacturing - commodities are globally priced
Specialization in manufacturing
Globalization of specialist manufacturing

18. New importance of Brands
Selling Fords like Coca Cola?
- Ford sold its components business for $1.5 billion - That business, Visteon, supplied 22% of a new Ford vehicle
- Ford spent $9 billion buying brands: Jaguar and Volvo

19. Globalized business
Greater specialization of production - Hewlett Packard
More outsourcing – Soap and medicines
Greater increase in brand values - LG
New technology niches – steel mini mills

20. Effects of globalization on work
Jobs in services rather than manufacturing
Workers provide services rather than “do a job”
End of “lifetime” employment
Individuals manage more of their own affairs

21. A globalized world
Greater freedom of movement of goods, services, capital, people
Global citizens
The Information Age – has only just begun

22. Australia and Globalization
How is Australia positioned?
Examples of globalized industries
The Future

23. Australia: globalization’s child
Australia has grown on - trade - foreign investment
- immigration - adaptation of technology Australia is the branch office model of development

24. Australia’s position
Openness
IT/E readiness
Culture

25. Australia’s openness
One of the most open economies in the world - average tariffs – 5 percent - open financial and telecoms - open to foreign investment

26. Australia’s IT/Ereadiness
Ranking
Score (of 10) US 1
8.73
Australia 2
8.29 UK 3
8.10
Canada 4
8.09
Norway 5
8.07
Sweden 6
7.89
Singapore 7
7.87
Source: Economist Intelligence Unit

27. Australia’s globalized economy
Global industries - mining and agriculture
Services – distribution, logistics, transport, financial services
Manufacturing – a new contender

28. Manufacturing exports

29. Globalized industries
Toyota - manufactures and exports a global car
Howe Leather – a tier one supplier
to Ford
Rosemount/Southcorp – exporter & offshore producer
Westfield – real estate management

30. The future
The information Age - computing power continues to expand exponentially
- More global distribution of activity
- Greater interconnectivity
- Bigger organizations
- Greater fragmentation
- Greater personal freedom

31. Australia ready to thrive
Globally oriented economy
High adaptation of IT
Workforce adjusting
Open society