World 3.0
Globalisation has empowered various enterprises, business concepts and processes to make them extend outside domestic boundaries in search for greater scope of possibilities within global marketplaces. Inspite of clearness maintained within the conceptualisation of globalisation the manner it is executed is yet not convincing which is the root cause of problem. The common public maintains the idea that the world market has turned flat due to fewer borders and narrowing of restrictive policies but in actuality the truth of globalisation is an over assumed fact that is driven by inappropriate forecast and assumption (Bei 2017). In real scenario trade across border is not extending as promptly as it is anticipated due to barriers such as excise duties and restrictive trade norms that govern free trade. As such globalisation is moving slower than anticipation due to these barriers. Efforts are in place for negotiations amongst nations to reduce impediments to free trade so as to boost considerable outcomes with more scope of business that will widen new market places in emerging nations and will increase employment of local people (Perelman 2015). Moreover globalisation is growing with onset of technological advances as world has witnessed rapid development in communication and technological means and this has dynamically transformed business scenario in present world. According to Stros, Coner and Bukovinski (2014) technology has revolutionised to lend support to globalisation where more businesses and government of different countries are seeking ways to attract new business projects to meet demand of their domestic consumption. However globalisation has few criticisms where some people argue that it has paid well to the development of already prosperous nations in Western part of world where large multinational firms are originally located that too at cost of domestic business and cultures. According to van Meerhaeghe (2012) while supporter of globalisation argues that globalisation has added to development of underprivileged and developing nations by exposing them to more trade opportunities thus enhancing employment and standard of living for people of such nations. Hence despite of ups and down and large debate surrounding the concept of globalisation it is widely acceptable and many reforms have been made through World Trade Organisation, International Monetary Fund’s and the World bank to consistently improvise the real picture and extend more scope equitably for all nations through efforts of capital management, flow of labour etc that is underpinning rise of globalisation.
World 3.0:
As stated by Nuno (2015) in 1600 AD the World 1.0 was in full growth which had permissible national boundaries and with better trade advances the world 1.0 evolved to world 3.0 with effects of globalisation where boundaries of nations united for trade development. However there is several criticism of world 3.0 which relies on concept of uniting world economic systems with federal regulations for achieving larger well being through adherence to regulations imposed by governments. With onset of globalisation more enterprises have adopted this concept for larger economic expansion and benefits to meet change in preference of mass consumers. According to Federico and Tena-junguito (2017) Globalisation is characterised by flat world which supports the conceptualisation of single large market in world. This no boundary world would provide easier access to trade associations between different nations which would increase rapid development of global economy to overcome blows of recession that hit world in 2008. Also as stated by Ghemawat and Vantrappen (2015) globalisation lends empowerment to several nations supporting them to respond to economic meltdown. During recession globalisation played a significant role to provide stability across global economies through outsourcing business process to minimise costs which helped many nations achieve economic scale. However with all good also comes critics and one of the largely debated views is of Ghemawat’s where he states that the world is yet not flat. Various other researchers have also revealed that globalisation is only territorial and full globalisation is still not obtained.
Anthony Giddens idea of Globalization
According to Dobado-gonzález, García-hiernaux and Guerrero (2015) as common phenomena enterprises in most nations rely on local and regional markets for economic prosperity as globalisation brings in larger risk environment due to business in various nations and because of their unpredictable nature. As such enterprises depend on regional approach to gain scale of business expansion where they extend operations outside local boundary to neighbouring nations as the status quo and market dynamics are mostly same to that of home nation. Ghemawat in order to evidence his claims that world is yet not flat completely showed that rate of globalisation is still lower than being forecasted by various experts. For instance he took case of cross border telecommunication business where due to onset of globalisation about 10% rise in business was predicted but in actuality the rise was just 1%v thus insisting that globalisation has not attained much acceptance as experts have anticipated. Another example is exports where it is found that it delivers to only around 20% of overall global GDP in sharp divergence to over 30% that was forecasted by business analysts. The primary logic behind this divergence in facts and figures is multiplied counting of specific product in certain global marketplaces. Nonetheless FDI throughout world delivers about 10% of overall investments that are made. Also from viewpoint of consumers it is likely that people are more interested in localising than globalising. Example it is found that in actuality on 2% of students chose to register for foreign education programs as compared to 30% that was predicted. Thus from these instances it is evident that Ghemawat’s claims that world is yet not flat is true which is indeed a pressing concern for multinational enterprises (Ghemawat 2011).
According to Gujrati (2016) so as to improvise the current condition of globalisation it is largely significant that enterprises move their focus towards differentiation of products than on costs as many of them have embraced globalisation for attaining economic prosperity and reducing cost of production. Hence time has come when enterprises need to focus on product distinctness over cost leadership as enterprises are more interested for regionalisation thus giving rise to localisation. This would help in extending GDP as World 3.0 is founded on liberalisation of immigration conceptualisation. In order to enhance rate of GDP in world 3.0 Ghemawat has proposed that the prime focus of enterprises should be on regions that are undervalued due to possibility of generating only 2-3% GDP from liberalisation of trade. Hence Ghemawat proposes that once such GDP ratios in those regions are attained then service liberalisation can further drive to add GDP growth to 4-5%. Moreover the rate of GDP can also be extended through movement of products, capital, information and labour. Movement of people from one to other nation is also proposed in world 3.0 with an intention to drive trade associations thus assuring growth of nearly 10% in GDP (Cetkovic and Zarkovic 2012). Ghemawat states that in current scenario enterprises focus more on developing nations to extend business rather than focusing on all other form of economies which is the main reason for slow globalisation.
Anthony Giddens idea of Globalization
As stated by Giddens globalisation is accumulation of worldwide community coalition related to border countries which is brought about in a manner that drives regional business through proceeding at faraway places and vice versa. According to Giddens globalisation is divided into four extent that are capitalist economy, nation-state system, military system and industrialised systems (Giddens 2018). Capitalist emerge as power hubs of worldwide economies where major type of production is capitalist economic trade. Different government revolving around economic proceeding comprehend domestic and international policies of such capitalist states. According to Dasgupta (2013) though the institutional enterprises of such states shields the economy from political conditions to a greater extent thus empowering the enterprises that builds regional liaison in other places despite of being established at a specific state to drive their global business. In present business scenario many transnational enterprises have strong financial capabilities however there are some dimensions where power of such enterprises fails to challenge the power of states that revolves around various facets of territoriality and governing ways of irregularity. Further Giddens stresses that enterprise act as agents to dominate inside global economy as states impact on worldwide political structure is strongly governed through its capital and association with military power and prosperity.
According to Majidi (2017) the second aspect of globalisation is nation-state system which has contributed significantly in reflexivity nature of modern world. It also stresses that sovereignty’s continuance should be pretended as unspecified that is being perceived naturally. Gibbens further said that sovereignty can be associated with replacing frontier conceptualisation with that of border conceptualisation in initial development phases that revolves around nation-state systems. This aspect of globalisation also persists that democracy in an area maintained by the state gets consent from recognition of other border states.
As stated by Bodislav, Bran and Iovitu (2015) the third aspect of globalisation is military system which describes that power and capacity of military of all states within the world due to the supremacy generated from ownership of modem ancillary that can be lead to bigger losses is far from excessive of even the largest of pre-modern communities. Several third world nations with instable economy own powerful military power. Gibbens further states that military power was manifested from ancient times when during Cold war a bipolar system of military collaboration with massive scale was formed by US and USSR which became the most militarily powerful states. Further it was essential for countries that engaged in this collaboration to retain a limitation on their scope of externally forming separate military strategies.
According to FLUCK (2016) the fourth aspect of globalisation surrounds industrialisation where expansion of worldwide division of labour is most apparent dimension for industrial growth. This also involves level of distinctiveness between more industrialised sections of world with that of less industrialised. The modern industry is majorly formed on division of labour which is based not only on job activities but also on territorial classification in form of industry category, capabilities and production of materials. After World War II worldwide reliance on division of labour extended rapidly and with distribution of advanced technologies on global level this division due to globalisation largely influenced industrialisation. However the implication of industrialisation is not limited to sectors of manufacture only but is largely extended now to other sectors which impacts regular lifestyle of people. Moreover these even impacts on the manner people communicate within this informative environment. As such the idea of people living in single world has emerged from industrialization and evolution of technologies that has revolutionised communication aspects.
End of Poverty Movement and Trade not Aid approach
According to Bacallao-pino (2016) the formative idea of trade not aid approach is that if developing countries are capable of extending their trade associations with developed nations then this would lead to development of more secure wealth. Further it would mean that such developing nations would rely less on external aids for implementation of their infrastructural projects. Moreover with extension of trade relations standard of living of people in underprivileged nations would also improvise eventually which would be probable through export of product/services to prospering nations that are reluctant to buy these materials thus resulting into growth of export within the economy. Hence trade not aid concept synchronises with lowering of poverty where primary relevance is given to establishment of export business to enhance growth. But unfortunately excise duties in developed nations on material exported from developing nations is contrastingly more than those being produced in developing nations. As a consequence exporters whom sell goods in developed nations have to give more taxes which compel them to establish higher market price of products. Further subsidies are offered from developed nations to only localised industries thus making them to retain low prices which subsequently drive them out of competition from exporter’s materials. For instance, to access market in USA nations such as China, Indonesia spend high tariffs that are imposed by US on material like clothing, automobiles etc that accounts to 50% of revenue gathered from overall duties inspite of the reality that these materials make only 2% of imports (FLUCK, 2016). Hence it is clear that though lesser materials are exported to US from developing nations but they are charged with more taxes which establish a demerit for developing nations.
Trade not aid concept further stresses that giving international aid to developing nations is not very constructive idea because it creates a tendency of over-reliance amongst these nations. And in some instances it has been observed that the aid given is misused by recipient nations. As such the most feasible manner to improvise economic condition in developing nations is to focus on enhanced trade affairs which can be embraced through liberalisation of policies and tariff obstacles so that these encourage free trade. The supporters of free trade are reluctant to set legal structures surrounding open market thus lowering government involvement as these will also develop drivers that will leverage innovation, efficiency and enhanced economies of scale. The main purpose of free trade policies is to lower power of trade unions and their mediation which will bring end to corruptive activities, reduce corporation and income taxes thus encouraging more investment in export sectors with support of free trade. This will remove poverty and will help to achieve sustained development in poor nations all over the world. According to Dasgupta (2013) the main reason of poverty in underdeveloped nations is unemployment. It is evident that developing nations have attained growth through increase in trade which has lowered their unemployment rate too, thus boosting standard of living for their people and economic development for the nation. For instance, inspite of getting around 1.4 trillion dollars as foreign aid since last fifty years poverty in Africa has not ended still. But recent opportunities of trade has paved way for improved education and heath in Africa and now the farmers in Africa use their profits that are gained through export business to make investment for construction of schools and health facilities thus improvising the standard of living for their community.
Hence inspite of critic’s free trade is widely accepted as efficacious manner to improvise economic conditions in developing nations, removing social issues and obstacles. As such trade is an enduring solution by which developing nations can secure their development as against aid which is a temporal solution. This is due to the fact that these aids are generally used for development of infrastructure which does not bestow improvement of developing nation’s economic conditions. Further these aids are minimal as against funding that is actually needed for underdeveloping nations so seeking for trade associations will free underdeveloping and developing nations by stimulating their economic upliftment instead of relying on aids.
Globalization in current context
According to Gujrati (2016) initial stage of globalisation had continued from mid 1800-1920’s where labour was largely available. In era of 1800’s nearly 300,000 people migrated from Europe annually which eventually rose to 1 million. Prior to year 1914, even passport was not need for foreign travel except war time. Similar to today’s scenario the labour of prospering nations in those times also feared competition in their jobs in context to wages. Then during initial stage of globalisation there emerged free movement of trade and capital which resulted to construction of units in far reaching locations from home territories where these larger enterprises were originated. As such many wealthy enterprises imported materials from remote locations to meet their production demand which were mostly sent through sea routes. Although WW-I, Russian revolution and Great recession suddenly halted the first stage of globalisation. This was due to the fact that there was difference in philosophies between communism and capitalism. And post 1990’s the world economy witnessed rebirth and second stage of globalisation came into formation that was propelled with advanced in technology and communication.
Other than WTO super powerful bodies such as World Bank supports funding of initiatives that surrounds national economic growth and has made relevant efforts to support the culture of globalisation. Further IMF has also regulated exchange rates and enforced policies for global monetary structures to empower globalisation as these would drive development across the world thus improvising standard of living for people everywhere by extending wealth creation, flexibility of labour market in both developed and developing nations.
According to Federico and Tena-junguito (2017) free trade due to globalisation has also enhanced production capacities of countries and boosted their per capita income. Like for instance, large retail firms have controlled inflation and gave a boost to production by compressing unorganised supply chains. Also it is forecasted that removal of barrier in free trade will further lead to rise in worldwide earnings thus leveraging developing marketplaces. By creating flexible labour markets in developed countries globalisation has also generated several positive leverages through rapid re-structure of labour among industries that have high demand needs other than giving power to employees. Also globalisation has generated outsourcing of labour that has added to economic improvement in developing countries such as India which is now the most attractive market for investments due to skilled IT workforces. Many businesses are outsourced to India because of lower cost of labour who are highly skilled and due to globalisation the outsourcing sectors in India are witnessing high profits.
Although certain form of jobs get outpaced because of globalisation but at the same time various new jobs are also generated in some nations due to concept of globalisation. Also harmony among diverse group of people with distinct cultures has been created as they are made to work together due to globalisation so irrespective of distinct beliefs, customs and communication globalisation has united people across culture. As such it has enabled both people and nations to leverage effectiveness for shared benefits and growth. For instance some of the best wines are imported from France, best diamonds from South Africa and best in class automobiles are imported from Japan all due to globalisation and free trade opportunities. However some experts have argued that globalisation has resulted to pollution by deregulation of environment status and regulations. For instance, developing nations such as Brazil, Malaysia and Thailand have eased their restrictions on environmental policies to attract foreign trade which is alarming the concern for rise in pollution intensive industries.
Conclusion
Hence it can be said that inspite of increasing acceptance for globalisation throughout the world its results are still not up to the mark in meeting the anticipated level of growth that jad been predicted by trade experts and global analysts. So still a wide way is to be covered to fully attain globalisation by empowering both developing and underdeveloping economies to adapt to conceptualisation of globalisation so that really backward economies too get uplift. So inspite of claims of globalised world and single market by several people the reality is unfolded and unattained as the world is yet to become flat or truly boundary less.
References
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