The Main Drivers Stimulating Globalisation
The following essay looks at the main drivers stimulating globalisation and how they impact on global strategies. Globalisation is about the increased interaction and linking of world societies and there economies. The world economy is now more closely linked than ever through global markets and the global organisation of the production of goods and services. “Globalisation is a process in which the world appears to be converging economically, politically and culturally. Globalisation is seen by many as a fundamental change where national borders become irrelevant, a process accelerated by development in information and communications technology.”
(Needle, 2004) The first and probably the most important driver stimulating globalisation is the triumph of economic neo-liberalism with regards to changes in government policies. Neo liberalism is a set of economic policies that have become widespread over the past 25 years or so. These economic policies have on the whole been looking at reducing barriers to the movement of goods, services and capital across national borders. Many people believe the most important being the reduction of government created barriers to trade such as tariffs and quotas(GATT/WTO) which in the past would have minimised and stifled international trade. These changes in government policy interventions saw an increase in the moving from government controlled systems/business’s to privately run business’s that are run for profit which really kick started competition within the market. Due to these reductions in barriers to trade and tariffs business’s can look at the world as one big global market, they can export and import goods for a minimum cost, they can base production at a location to optimise production and therefore lowering costs(greater economies of scale) and they also have a greater access to cheaper raw materials in order to become more cost efficient. Another driver is the vast and growing spread of international
(Needle, 2004) The first and probably the most important driver stimulating globalisation is the triumph of economic neo-liberalism with regards to changes in government policies. Neo liberalism is a set of economic policies that have become widespread over the past 25 years or so. These economic policies have on the whole been looking at reducing barriers to the movement of goods, services and capital across national borders. Many people believe the most important being the reduction of government created barriers to trade such as tariffs and quotas(GATT/WTO) which in the past would have minimised and stifled international trade. These changes in government policy interventions saw an increase in the moving from government controlled systems/business’s to privately run business’s that are run for profit which really kick started competition within the market. Due to these reductions in barriers to trade and tariffs business’s can look at the world as one big global market, they can export and import goods for a minimum cost, they can base production at a location to optimise production and therefore lowering costs(greater economies of scale) and they also have a greater access to cheaper raw materials in order to become more cost efficient. Another driver is the vast and growing spread of international