M O D U L E 2: G L O B A L I Z A T I O N

Module 2: GLOBALIZATION

Globalization is the unrestricted allocation and relocation of services, goods and capital from different
zones across nations. Integration and deals best describe globalization and it offer prosperity and peace.
Globalization is geared towards localization and promotes a free capitalist market. Thus, it becomes a constant
process where market economies have expanded throughout the world. While some think that globalization is
translated to internet business, trade network, schools and communities where people transport 24 time zones
and into the wireless world others also believe the integration of technology and free trade may cause income
gaps, migration for better jobs, being controlled by unknown market dynamism.

Globalization is a process of interaction and integration among the people, companies, and governments
of different nations, a process driven by international trade and investment and aided by information technology.
This process has effects on the environment, on culture, on political systems, on economic development and
prosperity, and on human physical well-being in societies around the world. Globalization is not new, though. For
thousands of years, people—and, later, corporations—have been buying from and selling to each other in lands
at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe
during the Middle Ages. Likewise, for centuries, people and corporations have invested in
enterprises in other countries. In fact, many of the features of the current wave of globalization
are similar to those prevailing before the outbreak of the First World War in 1914.

But policy and technological developments of the past few decades have spurred increases in cross-
border trade, investment, and migration so large that many observers believe the world has entered a
qualitatively new phase in its economic development. Since 1950, for example, the volume of world trade has
increased by 20 times, and from just 1997 to 1999 flows of foreign investment nearly doubled, from $468 billion
to $827 billion. Distinguishing this current wave of globalization from earlier ones, author Thomas Friedman has
said that today globalization is “farther, faster, cheaper, and deeper.”

This current wave of globalization has been driven by policies that have opened economies domestically
and internationally. In the years since the Second World War, and especially during the past two decades, many
governments have adopted free-market economic systems, vastly increasing their own productive potential and
creating myriad new opportunities for international trade and investment. Governments also have negotiated
dramatic reductions in barriers to commerce and have established international agreements to promote trade
in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have
built foreign factories and established production and marketing
arrangements with foreign partners. A defining feature of globalization,
therefore, is an international industrial and financial business structure.

Technology has been the other principal driver of globalization.

Advances in information technology, in particular, have dramatically
transformed economic life. Information technologies have given all sorts of
individual economic actors— consumers, investors, businesses—valuable
new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of
economic trends around the world, easy transfers of assets, and collaboration with far-flung partners.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor
countries and their citizens to develop economically and raise their standards of living, while opponents of
globalization claim that the creation of an unfettered international free market has benefited multinational
corporations in the Western world at the expense of local enterprises, local cultures, and
common people. Resistance to globalization has therefore taken shape both at a popular and
at a governmental level as people and governments try to manage the flow of capital, labor,
goods, and ideas that constitute the current wave of globalization.

5 Globalization Theories
1. Internalization
- It is the cross-border affairs between nations and globalization which signifies growth of global
exchange and collaboration. This ability to share ideas with other cultures will also allow others to
adopt, improve, modify some practices into perfection or put to practice. People transfer to other
places to find better opportunities, jobs, and even escape from persecution.
- There is no exact and common definition for the term “Globalization.” In fact, when defining the term,
it is necessary to look into the dimension or perspective one has to highlight.

2. Liberalization
- some laws concerning government laws will be lifted, creating a “borderless”, and “open” for the
economy of the world. There is a flow exchange of goods from a country to another. International
trade may result in income inequalities between the first world and the third world countries since
many foreign investors in the host country find ways to keep money by asking for tax exemptions
without thinking of developments or what the host country may get. This will also result to struggle
among developing nations since they will do their best to draw foreign investors and may compromise
their environmental regulations.
- On the brighter side, it creates benefits to less industrialized nations to engage in bigger markets and
be part of the international networks of supply and production. Thereby opening gateways for export
markets, flow of capital, human labor, and technology (Watkins, 2002 cited from McCubbery, 2016).

3. Universalization
- allow the proliferation of experiences and inventions like the creation of the Gregorian calendar, cars,
restaurants, farm, life, decolonization, and among other things. Thus, globalization creates a
global village since in split seconds, information can be shared through social media and the
news clip goes “viral” and a “trend” where almost everyone can access using their mobile
phones and electronic gadgets.
 - In marketing, new products as well as old items and services can be easily placed in other countries
by opening satellite offices or through franchise. Another way is through outsourcing which allows
another company to carry the products and services along with the company’s existing goods.

4. Westernization or Modernization
- where social structures of contemporariness like rationalism (philosophy that emotion or religious
inclinations are not the basis of forming opinions and actions but rather reasons and experiences),
capitalism (allowing individuals and companies to own products and do business rather by the
government), industrialism (develops and operates factories and business) as well as bureaucratism
(government or business system with regulations and methods of organizing and doing things) are
being applied from all over that will destroy old cultures and beliefs. It is being observed that
machines and technology come handy and make things life more comfortable for mankind to live.

5. Deterritorialization
- includes the restructuring of geography where social space is no longer a barrier and everything is
interconnected making the world borderless. A person becomes transnational which means that this
individual can travel from across time zones and countries within given time because of the invention
of airplanes and trains.

Benefits of Collaboration and Cooperation in Globalization

1. It creates a global village through an exchange of ideas and information through the social network and
the wireless web.
2. It foster local, regional, and national growth in the economy by being bale to access low-cost goods from
other countries, provide employment, and international collaboration of scientific and technology
development.
3. It allows people to understand and adapt cultures, values and beliefs of
different countries.
4. It motivates world leaders to create policies to protect the welfare of the people,
the community, as well as the environment.
5. It speaks of modernity and all traditional methods of transactions are
considered obsolete.

Interconnectedness of People and Nations

Globalization embraces a change in the spatial society connected with collective transactions and relations,
produce transcontinental or networks of interregional movements of endeavor, authority and collaboration.

There are four types of changes:

1. It includes stretching of social, political and financial situations across regional, national, and
continental political borders.
2. It allows magnification of the increasing scope, the interconnectedness and the trade flow, finance,
investment, migration, culture, and among others.
 3. It keeps global interconnectedness in speeding up interactions and processes in communication and
transportation, merger of ideas, information, people, goods and capital.
4. It tells about global interactions and global consequences resulting to a blurry possibility between
domestic and global affairs.

Five Components of Global Interconnectedness

1. ECONOMY
Trade
- Trade is the interchange of goods and services among the economies various nations.
Exports in international trade continue to increase and the export in agriculture of
developing countries remains unmoved since the middle of the 1980s.

- Despite this scenario, jobs have been created, remarkable increase in competition as
well as health, technological and educational developments alleviate poverty through
global trade.

Finance
- Global finance is translated as capital flow through the exchange of financial instruments or assets
among nations by public or private entities

Foreign Aid
- Aid is transmission of funds in form of loans or grants or may be in combination of both as well as
includes the giving technical assistance or capacity building. World Bank and among other major
organizations are channels where foreign aid can be coursed through by giving two nations a bilateral
agreement or multilateral support.

- In this stage, an innovative idea, whether in the form of a new product, service, or in other form, develops
into the market or become known to the trendiest consumers. In this stage, entrepreneurial and business
firms participate to develop and innovate ideas.

2. Politics
Power is so much wielded in the first world countries wherein they create allies to other
nations. Global politics take roots not in the old-fashioned geopolitical matters but largely on
the social, economic, and ecological issues. “Pollution, drugs, terrorism, human rights are
amongst an increasing number of transnational policy issues which cut across territorial
jurisdictions and existing political alignments.

3. Migration (People and Culture)

Migration
- Migration can be provisional or permanent transfer of residence among individuals between nations. It is
a gateway to find employment, study, or run away from difficult political circumstances. Migrants can be
classified as permanent immigrants, high- and – low skill workers, asylum applicants, refugees,
undocumented individuals, visa free migrants and students.

People and Culture

- When daily life experiences are being diffused into ideas or through things and while
it is shared globally, a phenomenon known as cultural globalization happens. It is
associated with the internet, electronic business, global travel and popular culture
that will fashion uniformity of the human experience.
 Cultural globalization is greatly influenced by the United States and other first world countries
with the creation of so many social network sites and various media channels such as films, television,
and many others.

4. Ideas
- The most powerful tool that shapes development is ideas being passageway of transmitting and handling
intellectual formulations of transmitting and handing intellectual formulations in any endeavor that will
affect the production of systems, managerial and structural activities, governance, in the legal arena and
the trends in technology. Intellectual property is one category of ideas that is bound by legal rights over
product of creation or invention.

5. Environment
- Globalization also takes watch of managing nuclear power and prevention of acid rain, avoiding overspill
from environmental destruction from one state or known as environmental refugee, protecting against
oceans and the atmosphere from pollution and degradation, maintaining ecological system from various
parts of the world, moving toxic discards and global transfer of dirty factories, creating global companies,
administration, networks and contracts that contribute to manage safety for the environment.

--------------------------------------------------------------- end of module --------------------------------------------------------------