CloballsaLlon generally refers Lo Lhe modern lndusLrlal and Lechnologlcal revoluLlon sLarLed afLer Lhe 2

nd

World warŦ Þeople ln general become more aware of lL afLer Lhe bombardmenL of lnnovaLlons ln Lhe
flelds of lnformaLlon Lechnology parLlcularly compuLers and lnLerneLŦ Þeople deflne globallzaLlon ln
Lhelr own wayŦ LconomlsL refers lL ln economlc Lermsţ lnvesLor sees lL wlLh a dlfferenL perspecLlve and
hlsLorlan presenLs separaLe deflnlLlon for globallzaLlonŦ
WebsLer ulcLlonary deflnes globallzaLlon as ºthe development of an increasingly
integrated global economy marked especially by free trade, free flow of capital, and the
tapping of cheaper foreign labor markets¨.
8uL Lhe deflnlLlon whlch ls more relevanL for undersLandlng ls glven by urŦ CŦ 8angara[anŦ CloballzaLlon
means lnLegraLlon of economles and socleLles Lhrough cross counLry flows of lnformaLlonţ ldeasţ
Lechnologlesţ goodsţ servlcesţ caplLalţ flnance and people (8angara[an 2006)Ŧ
1he Lerms globallzaLlon ls noL a new LermsŦ ln reallLy Lhe phenomena of globallzaLlon ls cenLurles oldŦ
Some hlsLorlans refer Lhe concepL of globallzaLlon Lo lndus valley clvlllzaLlonŦ Accordlng Lo frank a form
of globallzaLlon has been ln exlsLence slnce Lhe rlse of Lrade llnks beLween Sumer and Lhe lndus valley
ClvlllzaLlon ln Lhe Lhlrd mlllennlumŦ
CloballzaLlon ls an ongolng processŦ Cne can easlly observe LhaL globallzaLlon conLlnues over Lhe perlod
of LlmeŦ 8uL Lhe currenL wave of globallzaLlon has compleLely Lransformed Lhe worldŦ l can quoLe my
personal example how my own self experlence Lhe change ln my shorL llfeŦ My faLher Lold me how
dlfflculL ls Lo communlcaLe wlLh hls relaLlves abroad few years agoŦ 8uL l don'L agree wlLh hls argumenL
because l have no problem ln communlcaLlng wlLh people abroad Lhrough lnLerneLŦ 1he reason ls LhaL
globallzaLlon changes Lhe dynamlcs of whole worldŦ
1he lasL 30 years of Lhe 20
Lh
cenLury have Lurn around all Lhe dynamlcsŦ 1he recesslon and economlc
melLdown of greaL depresslons of 1930s and posLŴworld war ll developmenLs brlng revoluLlons ln Lhe
hlsLoryŦ 1here are numerous reasons for Lhe rapld growLh of globallzaLlonŦ 8uL arguably Lhe maln cause
of rapld growLh ln developmenL ls Lhe lnnovaLlons and developmenL ln LransporLaLlon lndusLryŦ SeL aslde
all oLher Lhlngsţ LransporLaLlon brlng Lhe people closer Lo each oLher and LhaL ls Lhe basls of rapld
developmenL of globallzaLlonŦ
1he world pollLlcal dynamlcs was redeflnedŦ Many new counLrles surfaced on Lhe globeŦ lormaLlon of
naLlons league (unlLed naLlons) brlng Lhe old enemles closer Lo each oLherŦ MosL of Lhe developlng
counLrles whlch galned lndependence from Lhe colonlal rule ln Lhe lmmedlaLe ÞosLŴWorld War ll perlod
followed an lmporL subsLlLuLlon lndusLrlallzaLlon reglmeŦ 1he world ls dlvlded lnLo sovleL and Amerlcan
blocŦ ln Lhe lasL Lwo decades of 20
Lh
cenLuryţ Lhe process of globallzaLlon has proceeded wlLh greaLer
vlgorŦ 1he former SovleL bloc counLrles are geLLlng lnLegraLed wlLh Lhe global economyŦ More and more
developlng counLrles are Lurnlng Lowards ouLward orlenLed pollcy of growLhŦ ?eLţ sLudles polnL ouL LhaL
Lrade and caplLal markeLs are no more globallzed Loday Lhan Lhey were aL Lhe end of Lhe 19Lh cenLuryŦ
WhaL ls sLrlklng ln Lhe currenL eplsode ls noL only Lhe rapld pace buL also Lhe enormous lmpacL of new
lnformaLlon Lechnologles on markeL lnLegraLlonţ efflclency and lndusLrlal organlzaLlon (8angara[an

2006)Ŧ CloballzaLlon of flnanclal markeLs has far ouLpaced Lhe lnLegraLlon of producL markeLsŦ A very
slmple example can be glven Lo undersLand how globallzaLlon flourlshes Lhrough Lhe advancemenL of
LransporLaLlon and people Lo people conLacLŦ lor Lxampleţ ln ÞaklsLan Lhe cosL of CoLLon ShlrL ls $ 2ţ Lhe
same coLLon shlrL when manufacLures ln uSA cosL $ 20Ŧ When people ln uSA come Lo know LhaL Lhey
can geL same shlrL aL a cosL of $ 2Ŧ Why Lhey are wasLlng $ 18Ŧ So Lhey Lhlnk of geLLlng Lhese shlrLs from
ÞaklsLanŦ Same ls Lhe case wlLh ÞaklsLanŤ Lhe uSA can provlde ÞaklsLan wlLh goods and servlces LhaL are
very expenslve or dlfflculL Lo geL from ÞaklsLanŦ
1he Lechnologlcal lnnovaLlons resulLed ln reduclng Lhe cosL of LransporLaLlon of goods and lnformaLlon
around Lhe world as wellŦ 1hls has resulLed ln Lhe lncrease ln overall economlc acLlvlLy of Lhe worldŦ
1echnologlcal lnnovaLlon also resulLed ln easy movemenL of caplLalŦ now a daysţ one can remlL Lhe
money ln seconds Lo anywhere ln Lhe worldŦ Lasy avallablllLy of lnformaLlon forced Lhe governmenLs Lo
llberallze Lhelr economlc pollcles and governmenLs have no oLher opLlon buL Lo llberallze Lhe Lrade
pollcles and forelgn dlrecL lnvesLmenLsŦ A broker ln lndla can easlly operaLes ln n?SL or London SLock
exchange wlLhouL golng Lo new york or LondonŦ
1he Lechnologlcal deLermlnlsm conLends LhaL Lhe shrlnkage of Llme and space has been so dramaLlc and
so pervaslve LhaL Lhere ls essenLlally noLhlng LhaL can be done Lo sLop lLŦ Accordlng Lo Lhls vlewţ
Lechnologlcal changes have propelled lnLernaLlonal economlc acLlvlLy and governmenLs have been
largely lrrelevanL (Ceoffrey CarreLL 2010)Ŧ Þrevlously Lhe governmenLs ln general deslgn pollcles Lo
proLecL Lhelr lndusLrles or Lhelr own vesLed lnLeresLsŦ 8uL Lhe lnflux of lnformaLlon forces Lhe
governmenL Lo raLher faclllLaLe Lhe globallzaLlonŦ ueveloped world has shlfLed Lhe labour lnLenslve
lndusLrles Lo ueveloplng counLrlesŦ lor Lxampleţ !AÞAn whlch was consldered Lhe manufacLurlng hub of
Lhe world has Lransferred ma[orlLy of lLs lndusLrles Lo Chlnaţ 1hallandţ Pong kong Ǝ MalayslaŦ uSA and
Luropean counLrles has also shlfLed Lhelr labour lnLenslve lndusLrles Lo ueveloplng counLrlesŦ
1he shlfLlng of Lhe ManufacLurlng hubs from Luropeţ uSA and !AÞAn creaLes a flood of economlc
acLlvlLy LhaL resulLed ln growLh of globallzaLlonŦ 8y dolng Lhls WesLern and develop world focus more on
emerglng sclences and new lndusLrlesŦ lor Lxampleţ Lhe sofLware lndusLry ln uSA creaLes more revenue
Lhan CuÞ of cerLaln counLrles of Lhe worldŦ MlcrosofL 8evenue ls more Lhan Lhe revenue of ÞaklsLanŦ
1he oLher maln drlver of globallzaLlon ls Lhe change broughL by lnformaLlon Lechnology ln banklng and
flnanceŦ 1he case for a Lechnologlcally deLermlned vlew of globallzaLlon ls far sLronger wlLh respecL Lo
lnLernaLlonal flnance Lhan Lo mulLlnaLlonal producLlon or LradeŦ ln Lhe era of 24Ŵhour global Lradlng ln a
seemlngly llmlLless array of flnanclal lnsLrumenLsţ governmenLs can only hope marglnally Lo lnfluence
conLrol crossŴborder llquld caplLal movemenLs (Culllen )Ŧ Lver fasLer and blgger semlconducLorsţ flber
opLlcs and Lhe lnLerneL have radlcally cuL Lhe cosLs of LransmlLLlng lnformaLlon ln Lhe pasL 20 yearsŦ
llnanclers can llLerally operaLe wherever and whenever Lhey llkeţ cuLLlng deals ln whaLever flnanclal
lnsLrumenLs Lhey can dream upŦ lL ls Lhe specLer of Lruly fooLloose llquld caplLal LhaL generaLes lmages of
hapless governmenLs seeklng Lo regulaLe yesLerday's flnanclal lnsLrumenLs wlLhln Lhelr bordersŸwhen
Lhe essenLlally homeless markeL makers Lhey are Lrylng Lo conLrol have already moved on Lo newer and
more exoLlc Lypes of LransacLlonsŦ



1he lmmergence of Lradlng blocs has also boosLed Lhe world economyŦ CreaLlon of Luţ nAl1Aţ W1Cţ
ASLAnţ SAA8C and oLhers have resulLed ln removlng Lrade barrlersŦ now ln order Lo enLer lnLo Lu
markeL one has Lo deal wlLh Lu onlyŦ 1hls eradlcaLes Lrade barrlers and easy access Lo many counLrles ln
one goŦ 1he W1C reglme forces Lhe governmenL all over Lhe world Lo dlscourage proLecLlonlsm of local
lndusLrlesŦ 1hls forces Lhe sLaLes all over Lhe world Lo lncrease lnLernaLlonal cooperaLlon and LradeŦ 8uy
goods where lL ls avallable on compeLlLlve prlcesŦ
1he cosLs of producL lnnovaLlon have skyrockeLed ln many secLors (parLlcularly Lhose wlLh Lhe hlghesL
value addedţ such as avlaLlonţ compuLersţ pharmaceuLlcalsţ auLomobllesţ weapons eLcŦ)Ŧ 1hls has greaLly
lncreased Lhe mlnlmum efflclenL scale of producLlon for numerous lndusLrlesŦ uecllnlng LransporLaLlon
cosLs have also made mulLlnaLlonal producLlon more efflclenL because Lhey lower Lhe cosLs of movlng
goods among locaLlons ln dlverslfled and complex producLlon reglmesŦ 1he lnLerneL has radlcally
reduced Lhe cosLs of coordlnaLlng complex supplyţ producLlonţ and dlsLrlbuLlon neLworks LhaL are
geographlcally decenLrallzedŦ 1he auLomoblle lndusLry ls a classlc exampleŦ lL may long have been
efflclenL for volkswagen Lo buy gear boxes ln Lhe unlLed SLaLesţ bulld englnes ln Cermanyţ assemble cars
ln 8razllţ and sell Lhe flnlshed producL cars all over Lhe worldŦ Same ls Lhe case of 8oelng and Alrbus (1he
economlsLţ ConsLrucLlon 2000)Ŧ

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