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Globalization, I take Two!
Status: This page is considered finished. However changes/reviews might happen.
Last changed: Saturday 2015-01-10 18:31 UTC
Abstract:

Globalization means increasing the interdependence, connectivity and integration on a global level with respect to the social, cultural, political, technological, economic and ecological levels of societies around the world. Unfortunately "Globalization" has become a somewhat negative term when it should not be at all. Why? Well, probably because of all the greed in the economic domain, that is nothing new however plus globalization should not be mistaken with capitalism. This page does not focus on the economic angle that goes along with globalization, but rather looks at the big picture of what globalization really is i.e. its technological, ecological, sociocultural and political opportunities next to pure economic ones.
Table of Contents
Introduction
Effects and Changes
Migration
Trade
Health
Environment
Culture
Miscellaneous
What is Globalization?
Why Should I Care?
Countries who have benefited from Globalization
Countries who have NOT benefited from Globalization
Iceberg Theory
When it Started
International Community
What Can I Do?
Impacts of Globalization
Pros and Cons
Downside of Globalization
Positive Aspects about Globalization
Taking Advantage of Globalization
The Individual
Countries
Businesses

Introduction

Our world is shrinking every day, thanks to more trade between nations and faster and easier travel. The smaller the world gets, the bigger the repercussions of globalization seem to be. So, is this a good or a bad thing? Read on...



I am a cosmopolitan, I like science, fiction is fun to me and entertains me. So, of course I like science fiction movies. What do they have in common with globalization? Well, if we take Starship Enterprise for example, what is presented there is the strong notion of unity and believe in one another — the optimists among us call this teamspirit ;-]

It does not matter whether you are young or old, male or female, human or Vulcan, straight or gay, tall or short, skinny or fat or all the shades in between... I think those are the opportunities globalization brings us... unity, peace and prosperity. It might not happen during the next three or so years, not everywhere and not for everybody, but in general, I think that is what we will see for the majority of people in a few decades from now — something that just is not the case right now and thus needs to improve.

Effects and Changes

If we talk about globalization we are also interested in effects and and changes caused by globalization, something this subsection takes a closer look at.

Migration

Only a few decades ago, traveling abroad from the Indian subcontinent was so rare that the adventurous traveler's entire family would accompany him to the airport along with much pomp and circumstance, including occasionally a brass band, to bid him farewell.

Today, people think nothing of having breakfast on one continent and dinner on another. And many people go abroad to work, either permanently or temporarily. The money they send home helps their families and boosts their home country's economy.

On the other hand, greater international labor mobility increases risk of brain drain. But several developing economies are attracting their educated citizens back by creating good business environments for people to use their entrepreneurship.

Trade

Trade drives globalization. Modern transportation and telecommunications have made it easier to export to and import from far-away places. But international rules, regulations, and practices can still make it difficult for developing countries to compete against developed countries.

For example, there is the problem of Dumping. For instance, some manufacturers dump goods in other countries at prices lower than the goods can be manufactured, undercutting local producers. One example occurs when farmers who receive subsidies export surplus crops and drive down international prices

Then there is the problem with Market Access and Regional Trade Agreements. Countries often try to protect their industries by imposing taxes on goods from other countries. These import tariffs make imported goods cost more and make it harder for poor countries to compete in richer markets.

RTAs (Regional Trade Agreements) are transnational trade deals, and are becoming increasingly widespread. A regional free trade agreement removes all barriers to trade. Unfortunately, when these agreements happen between developed and developing nations, they often do not benefit the weaker economy.

Poorer countries can not develop their own industries with cheap imports from rich economies entering their markets. To ultimately reduce poverty, international trade negotiations need to uphold the interests of developing economies.

We also see issues with Labor Rights. Globalization has brought millions of people into the workforce and raised living standards in developing countries. But some believe it has undermined labor standards in developed countries/regions like for example Europe and the USA, and increased pressure to work faster, longer or for less money.

Overall, global trade has grown dramatically over the past three decades, and developing countries have now become important players in the global marketplace. Their share of world trade has increased greatly over the past 30 years. For example, China's share of the global marketplace has risen to 5% in 2010, that is three times as much as it was in the mid-1980s. India and several Latin American countries seem ready to make similar jumps in global trade.

Health

Globalization has had dramatic effects on health. Treatments for diseases such as HIV/AIDS are more widely available, and their prices have fallen thanks to international agreements. Modern medical equipment to detect, measure and treat known and emerging diseases is being used all over the world.

The Internet with its many tools and applications, the WWW (Wold Wide Web) and email amongst the most widely used and popular, spread knowledge of health issues, while global action among national institutes, international bodies, and civil society is helping to increase awareness, monitor developments and create solutions to health problems.

On the other hand, cross border travel more easily spreads AIDS, SARS, and other infectious diseases, and could hasten a pandemic. The movement of meat and poultry products spreads diseases such as mad cow disease and avian influenza, especially in countries where regulations are weak and food standards are poorly enforced. Globalization also means that harmful products, such as cigarettes and alcohol, can wreak devastating consequences worldwide.

The movement of qualified health professionals from developing to developed countries has weakened the health systems of some developing countries, which now face shortages of qualified health providers.

Environment

It is said that the movement of a butterfly's wings can create atmospheric changes that could cause a hurricane at the other end of the world. Sure, this is all mathematical and/or philosophical theory but did you know that brown tree snakes from Australia are causing power outages in Guam on a regular. Ha!

International travel, trade and transport have become leading causes of invasive alien species. While many of the species that reach new lands do not survive in their new environments, others thrive. Left unchecked, they can transform entire ecosystems and even threaten other species to the point of extinction. Globally, the estimated costs of invasive alien species are in the area of $350 billion USD they say... it is probably three times that, but who knows. That is for another story.

Globalization is linked to the environment in many other ways as well. Strict environmental regulations in some countries lead corporations to move their operations to countries with less stringent rules, something that has been common in the financial sector for a very long time already and has to do with OFCs (Offshore Financial Centres).

In other cases, free trade agreements prevent governments from adopting legislation to protect the environment. Destroying forests to produce timber and crops for consumers in other countries is another example. Climate change, of course, is a big issue associated with globalization, as it affects everyone, and it is in every country's interest to combat the threat it poses.

Culture

Thanks to globalization, we know much more about other cultures today than people did in the past. It has opened our minds to other ideas and traditions, and has made this a very exciting time for our generation and those to come.

However, many argue that today globalization merely equals westernization and will soon be replaced by sinicization — this might take generations though... Some fear losing their values and languages to external influences and are threatened by the influence of other cultures on their own.

Miscellaneous

Other effects and changes caused by globalization are

  • enhancement in the information flow between geographically remote locations
  • the global common market has a freedom of exchange of goods and capital
  • there is a broad access to a range of goods for consumers and companies
  • worldwide production markets emerge
  • free circulation of people of different nations leads to social benefits
  • global environmental problems like cross-boundary pollution, overfishing on oceans, climate changes are solved by discussions
  • more transborder data flow using communication satellites, the Internet, wireless telephones etc.
  • international criminal courts and international justice movements are launched
  • the standards applied globally like patents, copyright laws and world trade agreements increase
  • corporate, national and subnational borrowers have better access to external finance
  • worldwide financial markets emerge
  • multiculturalism spreads as there is individual access to cultural diversity but at the same time this diversity decreases due to hybridization or assimilation
  • international travel and tourism increases
  • worldwide sporting events like the Olympic Games and the FIFA World Cup are held
  • enhancement in worldwide fads and pop culture
  • local consumer products are exported to other countries
  • immigration between countries increases
  • cross-cultural contacts grow and cultural diffusion takes place
  • there is an increase in the desire to use foreign ideas and products, adopt new practices and technologies and be a part of world culture
  • free trade zones are formed having less or no tariffs
  • due to development of containerization for ocean shipping, the transportation costs are reduced
  • subsidies for local businesses decrease
  • capital controls reduce or vanquish
  • there is supranational recognition of intellectual property restrictions i.e. patents authorized by one country are recognized in another

What is Globalization?

If we open a newspaper today, connect to the Internet, etc.... whatever we do, we read and hear about globalization. It is funny though, if we ask ten people, it might be so that not a single one can give us a straight answer when asked: What is globalization? — preferably with one sentence and so that anybody who made it through elementary school would understand. Read on and you will have your answer!


I just read an article about Russian orphans growing up American. Yesterday I watched a documentary about Ford Motor Company and its CEO. When asked what he thinks about the good old rhyme What is good for Ford, is good for America he did not hesitate and cut right to the point saying, That is long gone history! It is, would you not agree?

The point is, globalization is everywhere... and by everywhere I am not talking about places... well sure that too, but what I am talking about and referring to is: Globalization is everywhere, at our workplace, in our homes, even on our shopping list when we head out to run an errand. Do not fight it, accept it, learn it, use it to your own advantage.


However, that still does not answer the question about what globalization is. Now, without looking things up online or making the cumbersome hike from our desks to the bookshelves (for those who still own such a thing), how would you describe globalization? For me it is:

Globalization can be described as a process by which the people of
the world are unified into a single society. This process is a
combination of economic, ecological, technological, sociocultural and
political forces.
      — Markus Gattol


Or in short: Globalization is the growing integration of economies and societies around the world. There it is, our one sentence answer anybody can understand.


Globalization is an inevitable phenomenon in human history which is bringing the world closer together through the exchange of goods and products, information, knowledge and culture. Over the last few decades, the pace of this global integration has become much faster and dramatic because of unprecedented advancements in technology, communications, science, transport and industry.

While globalization is a catalyst for and a consequence of human progress, it is also a messy process that requires adjustment and creates significant challenges and problems. This rapid pace of change can be unsettling and most societies want to control or manage it, something which can only go wrong — if at all, globalization can only be managed and controlled by the international community i.e. together it is possible to not just face the challenges involved with globalization but also manage them.

Why Should I Care?

Globalization has sparked one of the most highly charged debates of the past decade. When people criticize the effects of globalization, they generally refer to economic integration. Economic integration occurs when countries lower barriers such as import tariffs and open their economies up to investment and trade with the rest of the world. These critics complain that inequalities in the current global trading system hurt developing countries at the benefit of developed countries.

On the other side are the supporters of globalization who say that countries like China, India, Uganda and Vietnam, all of which have opened up itself to the world economy, have significantly reduced poverty.

Money can't buy happiness, but neither can poverty.
      — Leo Rosten (1908 - )

Critics argue that the process has exploited people in developing countries, caused massive disruptions and produced few benefits. But for all countries to be able to reap the benefits of globalization, the international community must continue working to reduce distortions in international trade (e.g. cutting agricultural subsidies and lifting trade barriers) that favor developed countries and to create a better (read fair and more efficient) system.

The people's good is the highest law.
      — Cicero

Countries who have benefited from Globalization

  • China: Reform led to the largest poverty reduction in history. The number of rural poor fell from 250 million in 1978 to 34 million in 1999.
  • India: Cut its poverty rate in half in the past two decades.
  • Uganda: Poverty fell 40% during the 1990s and school enrollments doubled.
  • Vietnam: Surveys of the country's poorest households show 98% of people improved their living conditions in the 1990s. The government conducted a household survey at the beginning of reforms and went back 6 years later to the same households and found impressive reductions in poverty. People had more food to eat and children were attending secondary school. Trade liberalization was one factor among many that contributed to Vietnam's success. The country cut poverty in half in a decade. Economic integration raised the prices for the products of poor farmers (e.g. rice, fish, cashews) and also created large numbers of factory jobs in footwear and garments, jobs that paid a lot more than existing opportunities in Vietnam.

Countries who have NOT benefited from Globalization

  • Many countries in Africa have failed to share in the gains of globalization. Their exports have remained confined to a narrow range of primary commodities.
  • Some experts suggest poor policies and infrastructure, weak institutions and corrupt governance have marginalized some countries.
  • Other experts believe that geographical and climatic disadvantage have locked some countries out of global growth. For example, land-locked countries may find it hard to compete in global manufacturing and service markets.

Over the last few years, there have been protests about the effects of globalization in the USA and Europe. But in a lot of developing countries there is very strong support for different aspects of integration, especially trade and direct investment, according to a recent survey conducted by The Pew Center. For example, in Sub-Saharan Africa, 75% of households said they thought it was a good thing that multinational corporations were investing in their countries.

Iceberg Theory

Philosophical allures aside, we can probably agree that right now (2010), globalization refers to the absence of the walls and matchboxes that every country had, between themselves based on suspicion, mutual distrust and ambition. We were, in fact we still are for the most part, different countries, divided into worlds even, and therefore could never manage to deal with natural disbelieve, genuine distrust, and deadly epidemics, which time and again challenged us.

Globalization has strengthened the nexus and has helped us to know each others need in a better way. It has helped to demolish those walls that separated us and curbed our natural identity of being fellow human beings. As I mentioned above, unfortunately globalization has primarily become a fiscal term but its impact is not limited to the economy of the countries only, the term globalization actually refers to every aspect of our lives e.g. cultural, social, psychological and of course, political ones.

It is true that the impact of globalization is visible and affects largely the politics and the economy of the country but its effect on the mindset and the culture is noticeable gradually in the way people think and react. It is like the Iceberg theory wherein what we do and say are at the tip and what we think and believe is at the base. The base is not visible but manifestations at the top are conspicuous. It applies here, as well where people do not change abruptly but may be after a decade, that the change starts showing and seems radical.

When it Started

You, like everybody else, thinks globalization started 20 years ago?! Boy, you are wrong...

Globalization is not a new phenomena, the base was laid long back when the Dutch East India Company and the British East India Company started trading with India. In history there were trade relations between different countries like Arab and Egypt and now in modern times that has translated into globalization or free trade.

It is true that ultimately all the free trade resulted in the white man taking the burden proactively but then globalization leads to more employment and higher standard of living, especially among the developing countries. Theories suggest that globalization leads to efficient use of resources and benefits all who are involved — it is probably fair to question that, but from what I have seen, it is true.


According to libertarians, globalization will help the whole world to deal with crises like unemployment and poverty — again, it is probably also fair to question that... currently, even if Europe and the USA is loosing jobs, in the long-run I can imagine that is true and it will be a win-win.

It will help us to raise the global economy only when the involved power blocks have mutual trust and respect for each others opinion. Globalization and democracy should go hand in hand — it should be pure business with no colonialist designs as it were back then with the Dutch East India Company and the British East India Company.

The way we have developed in the last 15 years, globalization seems to have given us good returns. Globalization has made the life of the third world citizen completely a different story. There are so many foreign companies that have made way to Orient and have made India a brand name all over the world.

Globalization is a bumpy road, a what they call African massage, but ultimately I think it is a good thing. It is exciting, that is for sure... we just need to be attentive and act with foresight, mutual respect and understanding, honesty and fairness to not run our vehicle off the road... something that almost happened in 2008 when the financial meltdown hit.

Poverty wants much, but avarice everything.
      — Publilius Syrus

International Community

What is the international community doing with regards to globalization and helping developing countries to take advantage? The answer is, in part, with the World Bank.

One of its employees (David Dollar) describes globalization as a fast train for which the countries need to build a platform to get on. This platform is really about creating a foundation to make sure the country functions well. It includes property rights and rule of law, basic education and health for the people, reliable infrastructure (such as ports, roads, telecommunications, and customs administration), etc.

International organizations, such as the World Bank, bilateral aid agencies and NGOs, work with developing countries to establish this foundation to help them prepare for global integration.

When governments do not provide this foundation and basic services, poor people can not take advantage of opportunities that globalization offers and are left behind.

It is equally important that the government governs well and is transparent. If a country's government is corrupt, incompetent and/or totalitarian/authoritarian, outside agencies really will not be able to make a difference.

It is dangerous to be right when the government is wrong.
      — Voltaire (1694 - 1778)

What Can I Do?

  • Learn about the world and current events.
  • Volunteer. Search the UN (United Nations) websites to find out about volunteer opportunities worldwide to encourage sustainable development.

If you live in a Developed Country:

  • If you have power (either trough money or fame), put it to good use.
  • Find your national volunteer service or
  • search through the UN Volunteer or Idealist websites for other options.
  • Check out additional sites like the Take Action resources page for example.
  • Learn how much money your government gives through bilateral and multilateral assistance, and lobby your government to give more. View ODA (Official Development Assistance) levels by country.

If you live in a Developing Country:

  • Learn how much money your government receives in development assistance and take action to ensure government funds are properly spent.
  • Volunteer to help those in need.
  • Encourage other kids and adolescents to stay in school and to volunteer.
  • Stay in school at all costs, study and learn.

Knowledge is power.
      — Sir Francis Bacon (1561 - 1626)

Impacts of Globalization

Globalization has made way for free trade and business and has established a wealth of communication between various parts of the globe. It has potential to make this world a better place to live in. It is changing the dynamics of politics, thus deep-seated problems like unemployment — poverty and shift in power are coming to the picture. The marginal are getting a chance to exhibit in the world market. The term brand is catching up in the Asian countries.

It, however, is not only modernizing but also westernizing and to an extent also sinicizing native cultures. The power play is leading to the linguicide or linguistic, cultural and traditional genocide. This is probably where we need to keep a check and not let diffusion go wild. There has been significant de-localization which leads individuals to be more tolerant since face-to-face interaction is no more the order of the day.

For example, these days one European is trying to sort out billing issue of his mobile phone with an Indian who is mostly not even a direct employee of the service provider where the European has his mobile phone contract. Now, that sounds complicated and all but none the less, has to be dealt with carefully.

Globalization can be something great if we just take a little care and be passionate, open minded and fair about it, in the end, it is all about personal attitude...

Earth provides enough to satisfy every man's need,
but not every man's greed.
      — Mahatma Gandhi

Pros and Cons

Globalization can be win-win for developing and developed countries alike. Populations are aging in the developed countries, but it is there where they have a lot of capital and technology. Developing countries have large and young populations and need to create massive numbers of jobs over the next few decades.

Globalization can benefit both, developed and developing countries if it supports the movement of capital and technology to developing countries and the movement of labor to the developed world. This will not be easy, of course, but the key to successful integration will lie with creating appropriate institutions and policies.

On the whole, we live in a much more integrated world as a result of technological advances in transportation and communications such as the Internet. For example, a natural disaster such as the Asian tsunami is quickly known all around the world and people from far away send help. So, integration has created more of a global community that did not exist in the past, we are about to become one people.


So, are there significant downsides to globalization or is it just a matter of perception and left-party lobbying when they say things like that? Is globalization going to improve a lot of things for a lot of people or is it quite the opposite? And what about nature and everything aside humans?

As mostly, it depends on who you ask but one thing remains true... whoever we ask about globalization can just provide a biased statement, his very personal point of view on the matter, so let us have a common look at it:

Downside of Globalization

  • it is true that Europeans/Americans are losing jobs right now and that is posing a problem for them since the companies are outsourcing work to the Asian countries since the cost of labor is low and profits for companies are considerably higher if they do.
  • there is immense pressure on the employed Europeans/Americans who are always under the threat of the business being outsourced.
  • businesses are building up units in other countries equally well equipped as they have done at their own country, thus transferring the quality to other countries.
  • there are some experts who think that globalization, along with the positive aspects, is also leading to the incursion of negatives like communicable diseases and social degeneration.
  • There is also a threat of businesses ruling the world because there is a lot of power, which is invested in them due to globalization.
  • countries which are at the receiver's end are also giving up the reins in the ends of a foreign company which might again lead to some sophisticated form of colonization.
  • before we see improvements with regards to impacts on nature, we are probably going to see two more decades of increased pollution and hurtful behavior towards nature and wildlife.
  • the elderly and uneducated may never benefit from globalization simply because everything is getting more competitive — which is good from the point of view of a species (remember the Starship Enterprise example from above) but maybe bad for the individual.
  • changes are happening more quickly and if they do, they are more radical in nature — a society of ~7 billion people will naturally create more changes more quickly compared to a society which is just a fraction in size.
  • some say linguistic, cultural and traditional genocide is going to happen. At some point in the future there might be just one language/culture left. Globalization is not only modernizing but also westernizing and to an extent also sinicizing native cultures.

Positive Aspects about Globalization

  • goods and people are transported with more easiness and speed
  • the possibility of war between the developed countries decreases
  • free trade between countries increases
  • global mass media connects all the people in the world
  • as the cultural barriers reduce, the global village dream becomes more realistic
  • there is a propagation of democratic ideals
  • the interdependence of the nation-states increases
  • as the liquidity of capital increases, developed countries can invest in developing ones
  • the flexibility of businesses to operate across borders increases
  • the communication between individuals and businesses in the world increases
  • environmental protection in developed countries increases
  • more opportunities now that there is a global market for businesses and for individuals (think of knowledge/skills as a product)
  • there is more access to products of different countries, more choice
  • there is a steady cash flow into the developing world, which gradually decrease the currency gap and therefore strengthens purchasing power in the developing world which also translates in growing economies in developed countries
  • due to the presence of a worldwide market, there is an increase in the production sector and there are more options for businesses now
  • gradually there is a world power that is being created instead of compartmentalized power sectors. Politics is merging and decisions that are being taken, are actually beneficial for individuals all over the world
  • there is more influx of information between two countries, which do not have anything in common between them
  • there is cultural intermingling and everybody is now trying to know about the other's cultural preferences and in the process of doing so, we are actually coming across things that we like and in the course of time adopt it plus, things we like, we do not destroy/harm. So, this mere fact is somewhat assuring peace.
  • since we share financial interests, businesses and governments are trying to sort out ecological problems for each other — for the same reasons, aggression, maybe even war, does not come as an option anymore since it certainly backfires politically and economically.
  • socially we have become more open and tolerant towards each other and they who live in the other part of the world are not aliens as we always thought. There are examples, like now Indian girls work in call centers and work nights, which was a taboo even two years ago. We are celebrating Valentine's Day, scraping on Orkut, watching the Idol series, Fear factor, the Indian version Big Brother.
  • there is a lot of technological development that we have undergone over the years. There are fewer brain drains since Asians are working in their own country though for a foreign company but are earning foreign exchange for their country.
  • traveling has become a lot easier and cheaper, a trend that is going to continue because of free markets.
  • working abroad has become more common and easier, I would even say not doing it will soon become a huge drawback for employees. Nowadays what companies expect is not just a good record of accomplishments, good education and social skills but also cultural skills and understanding which comes with traveling and working abroad.
  • working habits changed a lot during the last decade — now teams are spread across the globe and thus need to use appropriate tools (MUC (Multi User Chat), mailing lists, etc.) to coordinate themselves. I figured having changed working habits is a benefit (at least to my lifestyle) since I can make use of collaboration tools that I am used to anyway but now every body else seems to have caught up, love it!
  • life is more colorful in general, like what and where do you eat next week? What do you wear, what kinds of things are you going to see? Two or so decades ago one might have had a pretty good idea about it, these days, could be anything everywhere. I like that!

Taking Advantage of Globalization

This subject has three angles really, the individual, countries and of course, businesses.

The Individual

We can not escape globalization so we should understand it and try to take advantage. If we go to our local supermarket, we can buy grapes from Chile or tomatoes from Mexico or Spain.

If we call the help desk for the computer we just bought, the person we talk to is in India. If we purchase a shirt, it will bear a tag from China, Indonesia or El Salvador. If we go through our daily routines then we will almost surely encounter people who have immigrated to the USA/Europe and who speak languages and come from cultures we know little about.

All these are examples of globalization. John Todd Stewart of the Institute for International Economics defines this trend as the increased cross-border flow of goods, services, people and capital.


In Europe and USA alike, this trend has meant bad news for some workers. Manufacturing jobs, especially unskilled ones, have moved to other countries. Fast-paced technological change and the lowering of long distance phone rates in the 1990s led to the outsourcing of white-collar service jobs to other countries, particularly call centers and software programming.

However, according to Ben S. Bernanke, former chairman of the economics department at Princeton University and a governor of the Federal Reserve, outsourcing is not likely to affect many of the more skilled jobs.

The only good is knowledge and the only evil is ignorance.
      — Socrates (469 BC - 399 BC)


Some jobs outside Europe and the USA are well paid. Other positions may offer only a stipend for living and perhaps free housing, medical insurance and a travel allowance, but they provide rich rewards in terms of personal growth and later career opportunities.

The real payoff comes in the non-tangibles: the chance to serve, to learn a language, to acquire job skills and to get to know other cultures.

A large number of non-profit, educational and religious organizations offer positions in education, health and environmental and development projects. These positions can be an excellent way to acquire skills and experience that may ultimately lead to a better-paid position back home, in Europe or the USA as well as abroad.

The way the individual can take advantage of globalization is by increasing its market value — you heard right, market value! As I mentioned above, nowadays a persons knowledge/skills must be thought of as product. A product for which in fact there now is a global market.

So how do we increase our market value? Easy, we do it by acquiring more (quantity) and/or better (quality) knowledge and skills. This however might just not be good enough — we have to be smart and start acquiring skills and knowledge in areas and domains with future demand. Even this might not be enough since formal education can only get you so far... those who mimic others or their career path will never be at the top of their game, those who go their own way probably will be.

Formal education will make you a living; self education will make
you a fortune.
      — Jim Rohn

Countries

There are mixed views about globalization, but if harnessed in the right direction it can be tremendously beneficial to both, developed as well as developing countries. Developing countries must:

  • work toward macroeconomic stability that would create the right conditions for foreign investments
  • provide free market conditions and not interfere
  • provide financial political and legal transparency
  • all businesses and individuals must be equal by law
  • create structural reform to encourage domestic competition
  • create strong institutions and an effective and corruption-free government.
  • promote education, training, research and development to promote productivity and
  • engage civil society in all these processes
  • provide, ensure and enforce equal rights to all of its citizens
  • take care of nature

If those basic guidelines are followed, chances are good to become a developed country rather sooner than later.

The benefit of being a developing country these days certainly is that common mistakes made by developed countries can be avoided — like, for example, building more efficient transportation, building more effective tools to fight crime and corruption, etc.


So, now that we looked at developing countries, what is in for developed ones? First and foremost, we need children, the more the better! Especially Europe, as it has a quickly aging populating and thus a ticking demographic time bomb at its hands. The same is true for the USA, even if its not as dramatic.

  • developed countries must open themselves to immigration in order to mitigate demographic effects (on a marginal note: Is that why Japan is building robots? ;-])
  • they must become a lot more efficient to cut costs in all areas of public spending
  • they must find a way to deal with globalization of human capital, especially outsourcing jobs to lower-wage locations which creates anxiety in wages, job security and social welfare policies in higher-wage locations. They need to adjust their economic policies to take advantage of the efficiency gains from outsourcing to lower-wage locations (if any), cope with greater competition from growing markets like China, India and other emerging countries, while at the same time ensure that any gains are distributed among their populations in accordance with their notions of equity and fairness.
  • developed countries will have to transform themselves from manufacturing based economies/societies to service based economies/societies e.g. instead of building cars, they are designed, engineered and marketed but not produced in developed countries.
  • developed countries have to massively invest in R&D (Research and Development) in order to maintain this status

Businesses

It is disputable how the gains of economic growth are being distributed but that is capitalism and free market. Those who can adapt better and faster to the new reality will succeed.

Even if that sounds like what is the case for individuals, it is also true for any business and country there is. Globalization has produced unprecedented opportunities, threats, and uncertainties for professionals and businesses amidst increasing access to a global human capital, as well as a global marketplace. Offshoring, in many market segments, becomes the lifeline, no longer only benefits, to stay in business.

In free market economy, professionals and businesses alike must find value and realign themselves and/or ones business into a new value-profit chain. National prosperity will be determined by a country's businesses, its citizens (including its workforce), and the governmental policies (an integrated approach to social, foreign, and economic policies) and institutions that organize and manage the economy in light of a global economy.


So how does a businesses benefit from globalization? I am not a pundit in economics, more like with technology. However, I think that in many cases the simplest answer is the best one. In my opinion success is dependent on six things:

  1. time
  2. talent/knowledge/skills
  3. determination and tenacity
  4. money
  5. networks
  6. social skills, common sense, social/ethical competence

This is true for any business, any individual as well as any country. So, actually, as we can see, nothing much changed with this everlasting equation except that now, we need to think global and act local (glocal) — it is all about the how and where we get those components.

Any business that manages to get the most quantity and best quality in resources the fastest, and thereby manages to give the least of its own resources in return, that business will be the most competitive and most successful.

For the most part this is true — competition is getting more fierce and we are going to see more of what is called survival of the fittest more often and in more dramatic ways in today's economy. However, I would add to it that, more often than not, success also comes with sharing and when teaming up and maybe melt two or more businesses into a single one. As my father always used to say: I prefer owning just a fraction of something big an good rather than owning 100% of something tiny which basically is crap all along.

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