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


World war eople ln general become more aware of lL afLer Lhe bombardmenL of lnnovaLlons ln Lhe
flelds of lnformaLlon Lechnology parLlcularly compuLers and lnLerneL eople deflne globallzaLlon ln
Lhelr own way LconomlsL refers lL ln economlc Lerms lnvesLor sees lL wlLh a dlfferenL perspecLlve and
hlsLorlan presenLs separaLe deflnlLlon for globallzaLlon
WebsLer ulcLlonary deflnes globallzaLlon as the 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 ur C 8angara[an CloballzaLlon
means lnLegraLlon of economles and socleLles Lhrough cross counLry flows of lnformaLlon ldeas
Lechnologles goods servlces caplLal flnance and people (8angara[an 2006)
1he Lerms globallzaLlon ls noL a new Lerms ln reallLy Lhe phenomena of globallzaLlon ls cenLurles old
Some hlsLorlans refer Lhe concepL of globallzaLlon Lo lndus valley clvlllzaLlon 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 mlllennlum
CloballzaLlon ls an ongolng process Cne can easlly observe LhaL globallzaLlon conLlnues over Lhe perlod
of Llme 8uL Lhe currenL wave of globallzaLlon has compleLely Lransformed Lhe world l can quoLe my
personal example how my own self experlence Lhe change ln my shorL llfe My faLher Lold me how
dlfflculL ls Lo communlcaLe wlLh hls relaLlves abroad few years ago 8uL l don'L agree wlLh hls argumenL
because l have no problem ln communlcaLlng wlLh people abroad Lhrough lnLerneL 1he reason ls LhaL
globallzaLlon changes Lhe dynamlcs of whole world
1he lasL 30 years of Lhe 20
cenLury have Lurn around all Lhe dynamlcs 1he recesslon and economlc
melLdown of greaL depresslons of 1930s and posLworld war ll developmenLs brlng revoluLlons ln Lhe
hlsLory 1here are numerous reasons for Lhe rapld growLh of globallzaLlon 8uL arguably Lhe maln cause
of rapld growLh ln developmenL ls Lhe lnnovaLlons and developmenL ln LransporLaLlon lndusLry SeL aslde
all oLher Lhlngs LransporLaLlon brlng Lhe people closer Lo each oLher and LhaL ls Lhe basls of rapld
developmenL of globallzaLlon
1he world pollLlcal dynamlcs was redeflned Many new counLrles surfaced on Lhe globe lormaLlon of
naLlons league (unlLed naLlons) brlng Lhe old enemles closer Lo each oLher MosL of Lhe developlng
counLrles whlch galned lndependence from Lhe colonlal rule ln Lhe lmmedlaLe osLWorld War ll perlod
followed an lmporL subsLlLuLlon lndusLrlallzaLlon reglme 1he world ls dlvlded lnLo sovleL and Amerlcan
bloc ln Lhe lasL Lwo decades of 20
cenLury Lhe process of globallzaLlon has proceeded wlLh greaLer
vlgor 1he former SovleL bloc counLrles are geLLlng lnLegraLed wlLh Lhe global economy More and more
developlng counLrles are Lurnlng Lowards ouLward orlenLed pollcy of growLh ?eL sLudles polnL ouL LhaL
Lrade and caplLal markeLs are no more globallzed Loday Lhan Lhey were aL Lhe end of Lhe 19Lh cenLury
WhaL ls sLrlklng ln Lhe currenL eplsode ls noL only Lhe rapld pace buL also Lhe enormous lmpacL of new
lnformaLlon Lechnologles on markeL lnLegraLlon efflclency and lndusLrlal organlzaLlon (8angara[an

2006) CloballzaLlon of flnanclal markeLs has far ouLpaced Lhe lnLegraLlon of producL markeLs A very
slmple example can be glven Lo undersLand how globallzaLlon flourlshes Lhrough Lhe advancemenL of
LransporLaLlon and people Lo people conLacL lor Lxample ln aklsLan Lhe cosL of CoLLon ShlrL ls $ 2 Lhe
same coLLon shlrL when manufacLures ln uSA cosL $ 20 When people ln uSA come Lo know LhaL Lhey
can geL same shlrL aL a cosL of $ 2 Why Lhey are wasLlng $ 18 So Lhey Lhlnk of geLLlng Lhese shlrLs from
aklsLan Same ls Lhe case wlLh aklsLan Lhe uSA can provlde aklsLan wlLh goods and servlces LhaL are
very expenslve or dlfflculL Lo geL from aklsLan
1he Lechnologlcal lnnovaLlons resulLed ln reduclng Lhe cosL of LransporLaLlon of goods and lnformaLlon
around Lhe world as well 1hls has resulLed ln Lhe lncrease ln overall economlc acLlvlLy of Lhe world
1echnologlcal lnnovaLlon also resulLed ln easy movemenL of caplLal now a days one can remlL Lhe
money ln seconds Lo anywhere ln Lhe world 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 lnvesLmenLs A broker ln lndla can easlly operaLes ln n?SL or London SLock
exchange wlLhouL golng Lo new york or London
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 lL Accordlng Lo Lhls vlew
Lechnologlcal changes have propelled lnLernaLlonal economlc acLlvlLy and governmenLs have been
largely lrrelevanL (Ceoffrey CarreLL 2010) revlously Lhe governmenLs ln general deslgn pollcles Lo
proLecL Lhelr lndusLrles or Lhelr own vesLed lnLeresLs 8uL Lhe lnflux of lnformaLlon forces Lhe
governmenL Lo raLher faclllLaLe Lhe globallzaLlon ueveloped world has shlfLed Lhe labour lnLenslve
lndusLrles Lo ueveloplng counLrles lor Lxample !AAn whlch was consldered Lhe manufacLurlng hub of
Lhe world has Lransferred ma[orlLy of lLs lndusLrles Lo Chlna 1halland Pong kong Malaysla uSA and
Luropean counLrles has also shlfLed Lhelr labour lnLenslve lndusLrles Lo ueveloplng counLrles
1he shlfLlng of Lhe ManufacLurlng hubs from Lurope uSA and !AAn creaLes a flood of economlc
acLlvlLy LhaL resulLed ln growLh of globallzaLlon 8y dolng Lhls WesLern and develop world focus more on
emerglng sclences and new lndusLrles lor Lxample Lhe sofLware lndusLry ln uSA creaLes more revenue
Lhan Cu of cerLaln counLrles of Lhe world MlcrosofL 8evenue ls more Lhan Lhe revenue of aklsLan
1he oLher maln drlver of globallzaLlon ls Lhe change broughL by lnformaLlon Lechnology ln banklng and
flnance 1he case for a Lechnologlcally deLermlned vlew of globallzaLlon ls far sLronger wlLh respecL Lo
lnLernaLlonal flnance Lhan Lo mulLlnaLlonal producLlon or Lrade ln Lhe era of 24hour global Lradlng ln a
seemlngly llmlLless array of flnanclal lnsLrumenLs governmenLs can only hope marglnally Lo lnfluence
conLrol crossborder llquld caplLal movemenLs (Culllen ) Lver fasLer and blgger semlconducLors flber
opLlcs and Lhe lnLerneL have radlcally cuL Lhe cosLs of LransmlLLlng lnformaLlon ln Lhe pasL 20 years
llnanclers can llLerally operaLe wherever and whenever Lhey llke cuLLlng deals ln whaLever flnanclal
lnsLrumenLs Lhey can dream up lL ls Lhe specLer of Lruly fooLloose llquld caplLal LhaL generaLes lmages of
hapless governmenLs seeklng Lo regulaLe yesLerday's flnanclal lnsLrumenLs wlLhln Lhelr borderswhen
Lhe essenLlally homeless markeL makers Lhey are Lrylng Lo conLrol have already moved on Lo newer and
more exoLlc Lypes of LransacLlons

1he lmmergence of Lradlng blocs has also boosLed Lhe world economy CreaLlon of Lu nAl1A W1C
ASLAn SAA8C and oLhers have resulLed ln removlng Lrade barrlers now ln order Lo enLer lnLo Lu
markeL one has Lo deal wlLh Lu only 1hls eradlcaLes Lrade barrlers and easy access Lo many counLrles ln
one go 1he W1C reglme forces Lhe governmenL all over Lhe world Lo dlscourage proLecLlonlsm of local
lndusLrles 1hls forces Lhe sLaLes all over Lhe world Lo lncrease lnLernaLlonal cooperaLlon and Lrade 8uy
goods where lL ls avallable on compeLlLlve prlces
1he cosLs of producL lnnovaLlon have skyrockeLed ln many secLors (parLlcularly Lhose wlLh Lhe hlghesL
value added such as avlaLlon compuLers pharmaceuLlcals auLomoblles weapons eLc) 1hls has greaLly
lncreased Lhe mlnlmum efflclenL scale of producLlon for numerous lndusLrles 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 reglmes 1he lnLerneL has radlcally
reduced Lhe cosLs of coordlnaLlng complex supply producLlon and dlsLrlbuLlon neLworks LhaL are
geographlcally decenLrallzed 1he auLomoblle lndusLry ls a classlc example lL may long have been
efflclenL for volkswagen Lo buy gear boxes ln Lhe unlLed SLaLes bulld englnes ln Cermany assemble cars
ln 8razll and sell Lhe flnlshed producL cars all over Lhe world Same ls Lhe case of 8oelng and Alrbus (1he
economlsL ConsLrucLlon 2000)

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