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Published byBrook Baldwin Modified over 8 years ago
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Introduction to Globalization
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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
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The Lexus and the Olive Tree Friedman’s 6 Dimensions (6 Ds) –Politics –Culture –National Security –Economic & Financial Markets –Technology –Environmentalism
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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
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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
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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
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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)
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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
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5. Technology Personal computers Software increasing productivity –Workers –Office staff Internet (hardware) World Wide Web (software) Result: personal empowerment
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6. Environmentalism Increased awareness of environmental issues –Pictures and information on web Mobilization & coordination of environmental activists –Seattle & Millennium Round
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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
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Globalization’s Results, cont. –Democratization More individual control over own choices More information via technology (internet) More & varied opportunities
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Globalization’s Results, cont. But… –Traditional lifestyles threatened –Less stability –Lack of ability to control own lives Increased competition Increased dominance of large corporations
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© van Marrewijk, 2005
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