Globalization Vocabulary 1

The accelerating pace of globalisation is having a profound effect on life in rich and poor countries alike, transforming regions such as Detroit or Bangalore from boom to bust - or vice versa - in a generation.

workers falling share

Many economists believe globalisation may be the explanation for key trends in the world economy such as:

Lower wages for workers, and higher profits, in Western economies
The flood of migrants to cities in poor countries
Low inflation and ...

The new-found affluence of the young workers in the IT sector has in turn changed attitudes to wealth and consumption in India - with educated young people for the first time being able to afford such luxuries as motor cars and home ownership.

The new-found affluence of the young workers in the IT sector has in turn changed attitudes to wealth and consumption in India - with educated young people for the first time being able to afford such luxuries as motor cars and home ownership.

Call Centre, India
India dominates the global IT services sector

Many service sector jobs are now under threat from outsourcing and offshoring, as global companies try to save money by shifting many functions that were once done internally.

Meanwhile the International Monetary Fund (IMF) and the World Bank, set up in 1944 as part of the UN system to run the international monetary system and to co-ordinate aid flows to poor countries, have come under criticism for not giving a bigger role to emerging market countries like India and China.

Crisis of legitimacy

The international institutions meant to deal with the globalising world are all in trouble.

global economic imbalances
For example, the World Trade Organization (WTO) is now under fire for failing to take into account labour standards or the environmental impact of trade.

The accelerating pace of globalisation is having a profound effect on life in rich and poor countries alike, transforming regions such as Detroit or Bangalore from boom to bust - or vice versa - in a generation.

workers falling share

Many economists believe globalisation may be the explanation for key trends in the world economy such as:

Lower wages for workers, and higher profits, in Western economies
The flood of migrants to cities in poor countries
Low inflation and ...

Crisis of legitimacy

The international institutions meant to deal with the globalising world are all in trouble.

global economic imbalances
For example, the World Trade Organization (WTO) is now under fire for failing to take into account labour standards or the environmental impact of trade.

Defining globalisation

In economic terms, globalisation refers to the growing economic integration of the world, as trade, investment and money increasingly cross international borders (which may or may not have political or cultural implications).

global economic growth - rich v. poor

Globalisation is not new, but is a product of the industrial revolution.

Meanwhile the International Monetary Fund (IMF) and the World Bank, set up in 1944 as part of the UN system to run the international monetary system and to co-ordinate aid flows to poor countries, have come under criticism for not giving a bigger role to emerging market countries like India and China.

In the post-war years more and more of the global production has been carried out by big multinational companies who operate across borders.

Who leads in global IT outsourcing

Globalisation is also being driven by the decision by India and China to open their economies to the world, thus doubling the global labour force overnight.

The accelerating pace of globalisation is having a profound effect on life in rich and poor countries alike, transforming regions such as Detroit or Bangalore from boom to bust - or vice versa - in a generation.

workers falling share

Many economists believe globalisation may be the explanation for key trends in the world economy such as:

Lower wages for workers, and higher profits, in Western economies
The flood of migrants to cities in poor countries
Low inflation and ...

Globalisation is blamed for many of the ills of the modern world, but it is also praised for bringing unprecedented prosperity.

There is even less international regulation of other aspects of globalisation.

Since 1960, increased trade has been made easier by international agreements to lower tariff and non-tariff barriers on the export of manufactured goods, especially to rich countries.

iPhone
Apple's new iPhone will be outsourced to Asian manufacturers

Those countries which have managed to increase their role in the world trading system by targeting exports to rich countries - such as Japan, Korea and now China - have seen dramatic increases in their standard of living.

Britain grew rich in the 19th century as the first global economic superpower, because of its superior manufacturing technology and improved global communications such as steamships and railroads.

Since 1960, increased trade has been made easier by international agreements to lower tariff and non-tariff barriers on the export of manufactured goods, especially to rich countries.

iPhone
Apple's new iPhone will be outsourced to Asian manufacturers

Those countries which have managed to increase their role in the world trading system by targeting exports to rich countries - such as Japan, Korea and now China - have seen dramatic increases in their standard of living.

Few places in the world have seen the dramatic effects of globalisation more than Bangalore, the Silicon Valley of India, which is experiencing an unprecedented IT boom that is transforming the prospects of the Indian economy.