meaning

Globalization (or globalisation) is the process of international integration arising from the
interchange of world views, products, ideas, and other aspects of culture.
[1][2]
Advances
in transportation and telecommunications infrastructure, including the rise of the telegraph and its
posterity the Internet, are major factors in globalization, generating further interdependence of
economic and cultural activities.
[3]

Though scholars place the origins of globalization in modern times, others trace its history long
before the European age of discovery and voyages to the New World. Some even trace the origins
to the third millennium BCE.
[4][5]
In the late 19th century and early 20th century, the connectedness of
the world's economies and cultures grew very quicly


The term globalization has been increasingly used since the mid-1980s and especially since the
mid-1990s.
[6]
In 2000, the International Monetary Fund (IMF) identified four basic aspects of
globalization: trade and transactions, capital and investment movements, migration and movement
of people, and the dissemination of knowledge.
[7]
Further, environmental challenges such as climate
change, cross-boundary water and air pollution, and over-fishing of the ocean are linked with
globalization.
[8]
Globalizing processes affect and are affected by
business and work organization, economics, socio-cultural resources, and the natural environment.

Explanation
Globalization is the system of interaction among the countries of the world in order to develop the
global economy. Globalization refers to the integration of economics and societies all over the world.
Globalization involves technological, economic, political, and cultural exchanges made possible
largely by advances in communication, transportation, and infrastructure.

Factors Enabling Globalisation
Globalization is not an end result, but is a continuing process that keeps growing and gathering pace.
The question to be addressed here is how this emerging trend came into being, thus it is important for
us to understand the factors driving this process of globalisation. We will consider the reduction and
removal of trade barriers; transport costs; growth of the internet; growth of multinational corporations;
and the development of trading blocs.

1) The Reduction and Removal of Trade Barriers:
Since the end of World War II, the General Agreement on Tariffs and Trade (GATT) and its successor, the
WTO, have reduced tariffs and various non-tariff barriers to trade, enabling more countries to exploit
their comparative advantage. Developing countries continue to drive the global recovery, but their
output growth is also expected to moderate to 6.0 per cent during 2011-2012, down from 7.0 per cent
in 2010, because of the slowdown in the advanced countries and phasing out of stimulus measures.
Developing Asia, led by China and India, continues to show the strongest growth performance, but some
moderation (to around 7 per cent) is expected in 2011 and 2012.

2) High unemployment is the Achilles heel for the recovery
The Uruguay Round of trade negotiations (1986-94) was the real watershed for global trade. Here, a
large package of measures was agreed, which freed up trade in both goods and in services. As a result,
the volume of world trade rose by 50% just in the 6 years following the conclusion of the Uruguay
Round. Equally important is the number of countries taking part in free trade negotiations. In 1948,
when the GATT treaty became effective, there were only 23 Contracting Parties to the agreement. Just
over 60 years later, there are now 153 member states of the WTO who all enjoy the benefits of free
trade based on the principle of comparative advantage.
Accordingly, between 1948 and 2008, trade rose from only 5% to a massive >25% of world GDP. This
means countries are becoming more and more reliant upon each other for their export earnings, income
and employment. This exposes them to the international trade multiplier, where domestic business
cycles become vulnerable to changes in the level of economic activity in the rest of the world.
However, the recent global recession brought international trade onto a downhill path. With world
demand for all goods and services in decline and a temptation by many countries to impose
protectionist barriers in order to protect jobs, the WTO in 2009 forecast a 9% fall in global trade flows.
This is the first time since the end of World War II that trade has gone into decline and has been termed
'deglobalisation'.

3) Transport Costs
Improvements in containerisation have drastically lowered freight charges. For example, over the last 25
years, sea transport unit costs have fallen by over 70%, while air-freight costs have fallen by 3-4% year-
on-year. The result has been a boost in trade flows, as transport costs are now less likely to cancel out
the gains from comparative advantage.
However the rise in sea and air transport has also caused great concern over the negative externalities
of global trade. Indeed recent estimates that CO2 emissions will rise by >70% by 2020 have led to calls
for green taxes on shipping transport. If these go ahead, they will partially offset the falls in transport
costs, hence the process of globalisation will be dampened to some extent.

4) Growth of the Internet
The growth of the internet has increased e-commerce, enabling firms of all sizes to compete more easily
in global markets. Essentially, the internet acts as a 24-hour shop front allowing consumers all over the
world to buy products online and around the clock, from whoever happens to be offering the best deal.
For the firm, it therefore provides cheap marketing with global reach, such that even small local
businesses can afford to serve customers abroad.
Accordingly, the internet gives all firms - both domestic and MNCs alike - easier access to foreign
markets. We now find that international trade is no longer the sole preserve of the larger firm. It can
now even be undertaken by, say, a local antiques shop, which can either set up its own website or sell
through an online auction like eBay. The end result is of course that more countries become
interdependent and reliant upon each other for the sale and provision of goods and services.
However, despite the 'global reach' of the internet, which ostensibly makes it a potent driver of
globalisation, we see a very uneven spread of internet usage around the world. The figures below
demonstrate how effectively the developed countries are embracing the World Wide Web as a tool for
wealth creation, while the developing countries are being left behind to varying degrees.
5) Growth of Multinational Corporations (MNCs)
An MNC is a firm which owns production facilities in at least one country outside its home state. MNCs
are said to epitomise global interdependence, as they often span across a number of different countries,
with sales, profits and a smooth flow of production being reliant on several countries at once. The
question, however, is how MNCs have come about.
Firstly, with lower transport costs firms are more easily able to disperse their production processes
round the world to take advantage of varying cost conditions. For example, it is now more viable for car
manufacturers to produce simple components like windscreens and door mirrors in cheap labour
countries, than to have these components transported into the UK where they are assembled onto the
finished good. The transport costs are now so small (see above) that they no longer cancel out the cost
savings from producing components overseas.
Secondly, falls in communication costs have also facilitated a dispersal of the production process. For
example, when asked why there is an increasing number of Western MNCs relocating their ancillary
services to India, most people will cite the country's cheap but increasingly educated workforce.
However, the Indian workforce was both cheap and highly educated during the '80s and '90s, yet call
centres have only been relocating there during the last 10 years. The reason would therefore seem to be
falling telephone charges. With international calls to Asia costing only a few pence per minute (as
opposed to a few pounds during the '80s and '90s), India's comparative advantage in labour intensive
services is much clearer now and is no longer being cancelled out by high communication costs.

Impacts of Globalization
Favourable Impacts:
1. More efficient markets
Efficient markets should be what every economy strives for. Essentially, the sign of an efficient
market is where there is an equilibrium between what buyers are willing to pay for a good or
service and what sellers are willing to sell for a good or service.
If you can improve the way you produce a good or service by doing things such as outsourcing
certain processes or buying from an overseas supplier that offers discounts, you can then afford
to lower your selling price which results in increased demand and affordability.
Even if businesses dont lower prices, they can make additional profits and then reallocate that
excess profit into doing things like increasing wages, taking on more investments or even
creating more expansion projects.
2. Increased competition
Anytime that you have multiple producers competing for a hold of the economy, thats a good
sign for consumers, as the quality of goods and services often goes up as a result.
When businesses started to venture across international borders, what they often did was
introduce a new standard into the global marketplace. Consumers then had more options to
choose from.
With more competitors to fight over market share, each company has to constantly look to
improve their goods or services or create more value for their customers.
This means better products and sometimes lower prices, which is always a good thing for buyers.
3. Stabilized security
When your economy depends largely on another countrys economy, it is hard to imagine either
one of the countries attacking the other. In a weird sort of way, globalization helped heighten
world security.
Although this may seem kind of twisted since there is so much violence that still goes on in the
world, the fact remains that globalization has halted many conflicts that could have turned ugly if
their countrys financial health didnt depend on the other.
Unfavourable Impact of Globalisation
The following is a list of reasons why globalization is not living up to what was promised, and is, in
fact, a very major problem.
1. Globalization uses up finite resources more quickly. As an example, China joined the
world trade organization in December 2001. In 2002, its coal use began rising rapidly. In fact,
there is also a huge increase in world coal consumption . Indias consumption is increasing
as well, but from a smaller base.
2. Globalization increases world carbon dioxide emissions. If the world burns its coal more
quickly, and does not cut back on other fossil fuel use, carbon dioxide emissions increase.
shows how carbon dioxide emissions have increased, relative to what might have been
expected, based on the trend line for the years prior to when the Kyoto protocol was adopted
in 1997.
3. Globalization makes it virtually impossible for regulators in one country to foresee the
worldwide implications of their actions. Actions which would seem to reduce emissions
for an individual country may indirectly encourage world trade, ramp up manufacturing in
coal-producing areas, and increase emissions over all.
Conclusion:
Globalization is a broad, contentious, multifaceted issue that affects people and cultures around the
world. Many organizations and groups have been formed at the local, national, and international
level that aim to promote the protection of traditional cultures. Some aim to study the matter
more deeply so that we may understand more clearly the implications of globalization on culture,
and others are already taking on advocacy roles. Globalization has suggested there may be a need
to establish a World Cultural Organization to help represent diverse cultures and put cultural
protection on an equal footing with the WTO.
In the coming years, efforts to protect traditional cultures are likely to play an increasingly
prominent role in new trade agreements and within international cooperative ventures. Indeed, a
global effort to protect local cultures from globalization would be a somewhat ironic
development. But increasingly, local activists are trying to learn how to harness new worldwide
forces to cope with the impact of international trends that have cultural effects.

introduction
Globalisation is perhaps the topic of the age. Globalisation means different thingsto different
people, but a key economic dimension of it is undoubtedly the opening up of economies to
international competition, allowing goods, ideas, capital and some people to move more
freely between countries. Many countries around the world have embraced these aspects of
globalisation, because governments havebecome convinced that a more dynamic economic
performance awaits countries thatmore closely integrate with the global economy. And yet,
because it brings with itmore rapid domesticeconomic change, globalisation can be disruptive
and cangenerate losers as well as winners. If for no other reasons than these,
globalisationremains an issue about which there is much debate.
Australias experience with globalisation has fitted this general pattern, withcloser international
integration being associated with an improved economicperformance over the past decade or so,
but also with more rapid domestic economicchange. The Reserve Banks and Treasurys interest
in globalisation was stimulatedboth by this Australian experience, and by Australias
involvement in the G-20group of countries.1 The inaugural Chairman of the G-20, Canadas then
FinanceMinister Paul Martin, proposed in 2000 that the G-20 study the policy challengesposed
by globalisation, and the Australian Treasurer, Peter Costello, suggested casestudies of member
countries as one aspect of that work
.The idea of a conference on the topic of globalisation, living standards andinequality grew out
of this enhanced interest in globalisation on the part of the G-20.The aim of the conference,
jointly hosted by the Reserve Bank and Treasury, was tobring together leading researchers in the
field, along with statisticians and policyadvisors from the G-20 countries, to seek answers to a
range of important questions