Globalization Part I

Globalization 1

Globalization, a complex term for several interrelated but distinguishable structural changes in the international system due to a deeper global economic division of labor, specialization, integration and networking, increasing political interdependence and increased cultural penetration of societies that have so far been nationally shaped.

Globalization is closely related to technological development and represents an evolutionary process based on several interacting driving forces. The typical characteristics of globalization include the unevenness and changing dynamics of the process flow as well as the different effects in individual economic regions, so that metropolitan areas and peripheries arise in geographical and economic terms. For example, some countries (especially in Africa) are being marginalized in the global economy because they are currently barely able to participate successfully in globalization due to a lack of legal certainty, a lack of functioning institutions and poor governance. In order to be able to use the opportunities of globalization,

Definition of terms

According to, globalization is an ambiguous term that encompasses not only economic and social aspects but also political and cultural aspects. The global transformation of economy, society, politics and culture into an information economy and knowledge society is taking place in a process of dynamic structural change that takes place on several levels at the same time. The term globalization refers to a process that is still in progress, which is characterized by a complex interaction of partially contradicting and contradicting individual processes. This also explains why in the literature, which has grown explosively since the 1990s, no uniform definition and delimitation of what is meant by globalization can be found to this day.

Some economists equate the concept of globalization more or less with the concept of internationalization, others see globalization merely as a particularly strong and far-reaching form of internationalization. A demarcation is, however, entirely possible and sensible, because there are striking differences between the globalization process that first emerged in the 1980s and earlier development phases of internationalization. Certain factors or driving forces are characteristic of globalization, which triggered and strengthened the development and differentiate it from earlier internationalization processes.

Driving forces

The driving forces of the globalization process (globalization drivers) can be divided into three categories – political, technological and economic. There are diverse interactions between political and economic factors on the one hand and between technological and economic factors on the other, which make it difficult to determine the clear causes of globalization and to quantify the relative strength of individual driving forces.

Political driving forces: The main drivers of globalization in the political arena were and are the dismantling of trade restrictions and investment barriers at the multilateral level within the framework of the GATT and later the WTO as well as at the regional level through the formation of free trade zones, customs unions, common markets and economic and currency unions. Furthermore, globalization is the result of liberalization and market opening to the outside world, which went hand in hand with the dismantling of internal state regulations (deregulation) and the privatization of state-owned companies (especially in the areas of financial services, energy, post, telecommunications, transport / logistics). The result of market opening and liberalization is increased competition.

Further driving forces are the liberalization of international capital movements and the deregulation of national financial markets. These have not only fostered an increasing mobility of physical capital (direct investments) and financial capital (portfolio investments) and created highly integrated financial markets, they have also accelerated the global spread of financial innovations.

The politically induced change in the planned economies of the former Eastern Bloc has also given the globalization process an additional boost by integrating the formerly isolated state trading countries into the world economy. The traditional division of the world into “first”, “second” and “third world” has become obsolete and is no longer usable today. The “second world” of the former state trading countries with a socialist orientation has – with the exception of Cuba and North Korea – completely disappeared. The former “Third World” has begun to emulate the “First World”. Was it Japan and the “four tigers” (Hong Kong, Singapore, South Korea and Taiwan) in the 1990s.

The change in strategy of numerous developing countries from shielding to opening up to foreign trade represents a marked turnaround in political terms. As late as the 1970s and 1980s, according to the so-called dependencia theories, an import substitution strategy with the aim of achieving a domestic market-oriented development before the Shielding competition from foreign exporters and investors. Since the 1980s, however, more and more developing countries have been orienting themselves towards the global market-oriented strategy of opening up goods and financial markets, under the impression that emerging countries are successfully catching up. (Development policy)

Technological drivers: In addition to the technical progress in the field of transport and logistics, which led to a faster overcoming of distances, it was especially innovations in the fields of telecommunications, microelectronics and optoelectronics that drove the process of global integration of goods and factor markets through considerable reductions in transactions – or have emphatically accelerated the costs of overcoming distance. The basic technologies of microelectronics and digital data processing resulted in a revolution in industrial production. Powerful computer and satellite systems now span the world with a dense communication network and have made a large number of services tradable across borders. The Internet has become the epitome of an information revolution that can also force previously closed societies (for example China) to open up by technical means. The rapid development of information and communication technologies has enabled the markets to react more closely to the reaction, a greater scope for company activities and a faster dissemination of knowledge than in earlier times.

Globalization 1