GLOBALIZATION

DEFINITIONS OF GLOBALIZATION
 Globalization is a process of interaction among the people, companies and governments
of different nations, a process driven by international trade and investment and aided by
technology
 Globalization is the acceleration & intensification of economic interaction among the
people, companies & governments of different nations
 Globalization is the growing interconnectedness between the economic, political and
cultural spheres
 Globalization is the global integration of cultural, economic, environmental, political,
technological & social processes
HISTORY OF GLOBALIZATION
Globalization is commonly thought of as a new phenomenon but contact with diverse
individuals and countries are not at all new. The integration process already started as early as
4000 BCE which makes globalization process as old as civilization.
Phases of Globalization (Thomas Friedman, 2000)
1. Globalization 1 (1492-1800) “globalization of countries”
Globalization process is a tool for imperialism. Many explorers from around the
world wanted to find new lands in order to gain wealth and glory for their home country
and to spread their culture and way of life.
The world has grown from size large to size medium
2. Globalization 2 ( 1800-2000) “globalization of companies”
Globalization process is a tool for capitalism. During this stage multinational
companies started operating in foreign lands to extend consumer base and to maximize
profit.
Industrial Revolution paved the way for the development of early satellites, steam
engines & railroads, and telephones & telegraphs which in turn accelerated the
globalization process.
The world has grown from size medium to size small
3. Globalization 3 ( 2000-present) “globalization of individuals”
Globalization process is a tool for socialization and interaction among individuals
from diverse culture
Currently in progress and this time, it has grown from size small to size tiny
DRIVERS OF GLOBALIZATION
1. Technological Advancement
2. International Trade
3. International Investment
Technological Advancement
 It drives globalization by making it easier for people goods & ideas to move across
borders
1. Advancement in transportation
Transportation is the process of moving goods & people from one place to another.
Mode of Transportation : roads, water, rails, air & pipelines
Benefit: carry thousands of people & large volume of goods over longer distances at
higher speed (lesser time)
2. Advancement in telecommunication
Telecommunication is the transmission of signs, signals, messages, writings, images,
sounds and intelligence by wire, radio, optical or other electromagnetic systems.
Telecommunication comes from the Greek prefix “tele” meaning “distant” & the Latin
“communicare” meaning “to share”
Benefits : Allows for quick & efficient transmission of messages & information
Economic : Helps build global business empires
Social: Have social conversations & stay connected with friends & family
Cultural : Increases public’s ability to access music & film
Modern Media : Telephone, radio & television, internet, LAN & WAN
3. Information Technology
Information technology refers to the use of computers and the Internet to bank, retrieve,
send, process, and disseminate information
4. Advancement in automation (production)
Production refers to the transformation of inputs into outputs.
Automation is the used of machines & robots in place of human labor
Benefit: Faster & more efficient manufacturing process
Increase in volume & flows of goods & services
International Trade
 No man is an island
 International Trade is the exchange of goods & services among countries.
 Trading means exporting and/or importing.
 It drives globalization by encouraging & strengthening interdependence among countries
thru exchange of goods & services
 Free trade & elimination of trade barriers
International Investment
 It drives globalization by increasing economic integration
 Leads to creation of productive enterprises, jobs & new sources of income
 International investment is the process of acquiring a production facility or financial asset
from abroad.
2 Forms :
1. Foreign Portfolio Investment (FPI)
 buying and selling of foreign currency-dominated financial assets
2. Foreign Direct Investment (FDI)
 Buying or building of facilities to produce goods in another country.
DIMENSIONS OF GLOBALIZATION
o Economic Globalization
o Political Globalization
o Cultural Globalization
o Ecological/ Environmental Globalization
1. Economic Globalization
 the intensification and stretching of economic interrelations around the globe
 increasing economic interdependence of national economies across the world through a
rapid increase in cross-border movement of goods, services, technology, and capital
 it refers also to the free movement of goods, capital, services, technology and
information.
Primary measure : International trade ( Exports & Imports)
Economic globalization comprises:
 Globalization of Production
 Globalization of Markets
Factors that Accelerated Economic Globalization
 Advancement in Science & Technology
 Market-oriented Economic Reforms ( Free Trade Policies & Free Trade Areas)
 Multinational Corporations
International Trade Organizations
1. GATT ( General Agreement on Tariffs & Trade)
 Promote & enhance free trade in the world
 Negotiations focused on tariff reductions
2. WTO ( World Trade Organization)
“The WTO is the only international organization dealing with the global rules of
trade between nations. Its main function is to ensure that trade flows as smoothly,
predictably & freely as possible.”
3. ASEAN (Association of Southeast Asian Nations) & AFTA (ASEAN Free Trade Area)
Aims to eliminate tariff & non-tariff barriers among Southeast Asian Nations to
promote greater competitiveness, economic efficiency & productivity.
ASEAN Vision 2020:
“resolved to create a stable, prosperous & highly competitive ASEAN economic Region, in w/c
there is a free flow of goods, services, investments, capital & equitable economic development &
reduced poverty & socio economic disparities.”
4. EU ( European Union)
A politico-economic union which aims to ensure free movement of people, goods,
services & capital within the internal market.
Multinational Corporations
Multinational corporation is an organization that owns or controls production of goods or
services in one or more countries other than their home country.
Examples: McDonald, Nestle Philippines, Ford Motors Philippines

2. Political Globalization
  Political Globalization is the intensification and expansion of political interrelations
around the globe
“Political globalization is the expansion of a global political system, and its institutions, in which
inter-regional transactions (including, but certainly not limited to trade) are managed.”
- William Thompson
“Political globalization refers to the growing power of institutions of global governance such as
the World Bank, the International Monetary Fund (IMF) and the World Trade Organization
(WTO).”
- Colin Crouch
Primary Measures:
 Diplomatic Relations
 Membership in international organizations ( e.g. United Nations)
Cultural Globalization
 the intensification and expansion of cultural flows (movies, music food and cuisine,
fashions & lifestyles) across the globe
 the transmission of ideas, meanings, and values around the world in such a way as to
extend and intensify social relations
“Many societies, particularly indigenous people view culture as their richest heritage, without
which they have no history or soul. Its value is other than monetary. To commodify is to destroy
it.”
-M. Barlow
Ecological/Environmental Globalization
 the internationally coordinated practices and regulations, often in the form of
international treaties, regarding environmental protection.