Globalization Lecture Notes

Introduction to Globalization

• Increasing interconnectedness worldwide
• Relationship between international trade, communication, and politics
• Globalization presents both opportunities and challenges

Definition of Globalization

• Term frequently used but hard to define
• Economic, environmental, social, and political issues are transnational
• Governance requires broader stakeholder groups (e.g., EU, OECD)

Technological Advancements

• Modern communication technology enables real-time information distribution
• Mass media influence global standardization
• Significant cost reduction in communication and transportation since 1930:
  • Telephone call costs from New York to London down 99%
  • Transportation costs dropped 65%
  • Freight charges for a ton of coffee from Asia to Europe = 1% of its price

Economic Globalization

• Major catalyst of globalization
• International exports increased 30-fold over the last 60 years
• Foreign direct investment grew from $13 billion (1970) to over $1.8 trillion today
• Rise of multinational corporations from 7,000 to 65,000 since the 1990s

Political Globalization

• Increased interdependence in international politics
• Major issues (climate change, terrorism) can't be solved by single states
• Collaborative decision-making among groups (EU, G20, UN)
• Emergence of non-governmental organizations (NGOs) influencing policy

Cultural Impact of Globalization

• Concept of "McWorld" refers to dominance of Western culture
• Western music, news, products, and English language promote cultural homogenization
• Pushback against globalization with renewed interest in local cultures

Benefits and Challenges of Globalization

• Newly industrialized countries (Taiwan, South Korea, India, Brazil, China) benefit significantly
  • Ability to attract foreign direct investment and compete globally
  • Example: China lifting 500 million people out of extreme poverty
• Regions suffering from globalization (e.g., Sub-Saharan Africa)
  • Lack of preparation for international competition
  • Influx of cheap products undermines local industries
  • Low attractiveness for foreign investors

Conclusion

• Globalization presents both threats and opportunities
• Industrialized countries face competition from newly industrialized nations
• Certain sectors (e.g., textiles, toys) are no longer profitable in industrialized countries
• Globalization impacts multiple areas: politics, culture, economy
• Results in declining costs and liberalization of global markets
• Important to recognize both the advantages and disadvantages of globalization.