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Globalization laid the foundation of open economies through its various means like liberalization, privatization and capitalization of economies. Globalisation has been beneficial for the world economies as it not only exchanges good, services and people but also ideas, innovations, creativeness and technologies.
Globalisation has its wide ranging impacts on various nations. With passing time, the drawbacks of Globalization has surfaced. It is argued that the super power countries are retreating from it to save themselves from the perils of Globalization.
The past three decades have witnessed the emerging trend of Globalization. Every nation was promoting it and wanted to participate. But as change is all-pervasive, the big powerful and capable countries are trying to pull themselves out of any kind of association on international levels.
Most popular steps taken by most popular and strong nations i.e. United States of America and United Kingdom. As per the reports in 2017 America’s Trump is being opposing the globalisation as a result he has not appointed any ambassador at World Trade Organisation (WTO). America is now restricting its investment to go abroad (The Indian Express, 2017). In 2017, America also announced that it would withdraw itself from the Paris Agreement as well. It has also terminated Trans-Pacific Partnership (TPP), which was constituted between twelve nations and took seven years to form and was signed by the former President Barack Obama in his second term. TPP aimed at providing no trade barriers and no tariffs in the view to increase the trade and market (Shesgreen, 2018). The President Trump also announced in year 2018 that he will shortly terminate the North (NAFTA) America Free Trade Area (Thrush, 2018). A very recent announcement during the COVID-19 pandemic by the Trump Government was suspension of the H1 Visa that used to allow hundreds of thousand foreigners to work in USA. It was in order to limit the immigration in America (Shear and Jordan, 2020).
Globalisation’s retreat is not limited to USA only, there are other powerful nations such as, France, Italy, Britain and Germany. The United Kingdom has already pulled itself back from the European Union.
Globalisation refers to free movement of goods, services, people, capital and investment from one nation to another. But the reality has been walking away from what the world has seen from last three decades. People’s movement were always restricted more than goods and capital but now in today’s scenario even the goods and capital don’t have much of the freedom to move.
Globalisation has done a lot of good to the world. It is undergoing major structural and systematic transformations. The globalisation that started three decade back is turning into digital globalisation. As previously it was more of trade of goods and services but in today’s era it is more correlated to digital technology led by some emerging economies.
Research by the McKinsey Global Institute shows that because of globalisation the world’s GDP is 10% higher than it would be without globalisation (World Economic Forum, 2017). There have been so many measures to reach to a point that globalisation is in retreat, such as 2008 crisis and the recession it caused, put a three decades long globalisation to an end. There are many other issues such as unemployment, dislocations of capitals, deindustrialization, inequality and much more. But this all is just a part of a story. Globalisation is still there. It is growing with its speed but it has opted a different path. Digital technology is promoting more people to participate in small businesses from cross-borders as compared to before. This era is not degobalization, but it simple has a new path. Now this kind of globalisation will benefit the people more in regards to social benefits and linking to consumers and suppliers (Lund and Tyson, 2019).
Although the actions taken by the US president Trump might have shocked the globe yet globalisation has been considered supreme and more powerful than any present or ancient leader or politician. Globalization is not a static force but more of a dynamic force. Today globalisation has moved far away from the meaning such as supply of goods from one place to another. Today the world has moved towards digitalization such as automation of factories, smartphones, 3D printing and much more. The goods shipped from a county to another is not an appropriate measure of globalization. We are in digital era (Donnan and Leatherby, 2019).
Whatever this generation is experiencing now cannot be accumulated as an end of globalisation. It has not died, it’s changing to a new phase. The markets are expanding in the ways that nobody ever imagined. We are now living in a new emerged global economy where globalisation is not limited to exports and imports, movement of people and capital but it is more about the digital boosters. For instance, Netflix, Amazon Prime, Zomato, Swiggy, PUBG, PokemonGo and many such other digital applications are the perfect example that how the globalisation is shifting towards digitalisation (Bhattacharya and Augustinraj, 2017).
Global standards like technological standards, accounting standards, environmental standards are being framed. So that the world can function as one large economy.
Globalization is still there. It has not disappeared in the era because of several steps taken by the powerful nations of the globe which seem to be promoting de-globalisation. It has entered in a new world of digitalization and automation. National borders are not relevant in this scenario where people are reaching cross-border through internet medium. Many countries are criticizing United States and European nations for promoting de-globalisation. But it is important to study efficiently what they are thinking and not reaching to a conclusion and proving them as racist and religious bigots (Sirkin, 2016).
This new form of globalisation supports digitalisation over capital and labour. It is more knowledge intensive. It needs are much different such as internet connections than shipping lanes and ports. It reduces various barriers such as on entry and exit, competition and changes. Previously it was nearly impossible for the small businesses of any nation to export due to lack of resources. Well, now due to the availability of the digital platforms such as Alibaba, Amazon, Flipkart and other such online platforms even small businesses can tap and reach international market. The new globalisation is in favour of small scale entrepreneurs (World Economic Forum, 2017).
Before this new digital globalisation the interconnection between the countries was negligible, but this new era has brought world together and work together. Flows of goods and services has lost momentum in last few years but the cross-border exchange of signals have its speed high. Digital platform have changed the way of doing businesses cross-borders. Businessmen are need not to be dependent on export and imports as there are new ways to reach out to people across the globe (Digital Globalization: The New Era of Global Flows, 2016).
As along the study there were several facts that were laid down about the globalisation. It has been evidently proven that how the USA and the United Kingdom have impacted the brain of the people to think that they are promoting de-globalisation. But the reality is different. The reality shows that how digital globalisation is taking place in every nation. Digitalisation have become new globalisation.
Then tensions that the steps of most powerful nations have created, are huge and valid up till some extent but it is necessary to understand their thinking behind that step. The COVID-19 pandemic has changed the face of globalisation as not only us but the businesses have been in touch with cross-border markets via broadband connections.
It is the truth that the businesses are moving towards digitalization from traditional exports and import of goods. It is the responsibility of the Governments to understand the effects of digitalisation and technology on the global trade and it will contribute to the economic growth. Government shall have to be prepared for it and must formulate their national strategies accordingly. It is essential that the Governments start multilateral trade and develop some of the common rules. Countries need to understand the benefits of the digitalisation over the trade of physical goods.
Bhattacharya, A. and Augustinraj, R. (2017). Globalization is not ending, it’s changing. [Online] mint. Available at: https://www.livemint.com/Opinion/XF7o6jevNo1OBOpu4DGZ1I/Globalization-is-not-ending-its-changing.html [Accessed 9 Sep. 2020].
Digital Globalization: The New Era of Global Flows. (2016). [online] McKinsey & Company, pp.23–97. Available at: https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Digital%20globalization%20The%20new%20era%20of%20global%20flows/MGI-Digital-globalization-Full-report.ashx [Accessed 9 Sep. 2020].
Donnan, S. and Leatherby, L. (2019). Bloomberg - Are you a robot? [Online] Bloomberg.com. Available at: https://www.bloomberg.com/graphics/2019-globalization/ [Accessed 9 Sep. 2020].
Lund, S. and Tyson, L. (2019). Globalization Is Not in Retreat. [Online] www.foreignaffairs.com. Available at: https://www.foreignaffairs.com/articles/world/2018-04-16/globalization-not-retreat#:~:text=By%20many%20standard%20measures%2C%20globalization [Accessed 9 Sep. 2020].
Shear, M.D. and Jordan, M. (2020). Trump Suspends Visas Allowing Hundreds of Thousands of Foreigners to Work in the U.S. [Online] The New York Times. Available at: https://www.nytimes.com/2020/06/22/us/politics/trump-h1b-work-visas.html [Accessed 9 Sep. 2020].
Shesgreen, D. (2018). Trump’s long list of global trade deals, agreements exited or renegotiated. [Online] USA TODAY. Available at: https://www.usatoday.com/story/news/2018/11/21/donald-trump-foreign-policy-iran-nafta-russia-mexico-canada-trade/1732952002/. [Accessed 9 Sep. 2020].
Sirkin, H.L. (2016). How to Cure the Globalization Backlash. [Online] Forbes.com. Available at: https://www.forbes.com/sites/haroldsirkin/2016/12/15/how-to-cure-the-globalization-backlash/#38086c255d6c [Accessed 9 Sep. 2020].
The Indian Express. (2017). Globalisation in retreat. [Online] Available at: https://indianexpress.com/article/opinion/columns/globalisation-in-retreat-4960947/ [Accessed 9 Sep. 2020].
Thrush, G. (2018). Trump Says He Plans to Withdraw From Nafta. The New York Times. [Online] 2 Dec. Available at: https://www.nytimes.com/2018/12/02/us/politics/trump-withdraw-nafta.html [Accessed 9 Sep. 2020].
World Economic Forum. (2017). Globalization isn’t in retreat. It’s just gone digital. [Online] Available at: https://www.weforum.org/agenda/2017/02/why-globalization-isnt-it-in-retreat-its-gone-digital [Accessed 9 Sep. 2020].
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