Some Driving Influences Which Can Potentially Affect an Increase of Globalization

Surely, there are few main factors which affect an increased phenomenon of globalization. Well, ever since the end of the World War II, such a distributing system between countries’ barriers to provide goods, services, and capital had already occurred. In other words, it is due to the dramatic series of technological developments in the area of communication, information, and transportation sectors over the last few decades.

1. THE DECLINE IN TRADE AND INVESTMENT BARRIERS

In any circumstances, an international trade happens when a company exports goods or services to consumers in other countries. Foreign Direct Investment so-called FDI occurs when a company is investing its resources in the business activities outside its home country. Such barriers to international trade, generally, are in the form of high tariffs on imports of the manufacturing goods. Besides, the main purpose of this barrier, actually, is simply to protect domestic industries from foreign competition. However, one of the consequences of the tariff policy is the 'beggar-thy-neighbor trade policies' or vengeance, where other countries increase trade barriers against one another by purpose.

2. THE ROLE OF TECHNOLOGICAL CHANGE

A decline of trade barriers, theoretically, makes the global market and production can possibly be achieved. Such changes in technology, in fact, have already made this thing happened, as it becomes today's reality. Ever since the end of the World War II, the earth has experienced a great deal of technological progress in communication, information, and transportation and this includes the emergence of an internet so-called the World Wide Web (www).

In general, such technological advances in telecommunication and transportation have created a certain uniqueness of the global audiences. For example, from Buenos Aires to Boston or from Birmingham to Beijing, many people nowadays are able to fly faster by plane routes. Due to the fact that the transportation costs are associated with the global production, therefore, the production sites must be separated geographically at any locations where they have more economic advantages.

On the other hand, several results of the technological innovations in information and communication have also declined dramatically in the last two decades. Such development as to enable companies to create and manage its production systems which can be distributed globally might further be needed to be facilitated in the area of global production. In any case, a network of communication that spreads around the world, indeed, has become essential for many international businesses and perhaps, we can have a look at how Dell Company is using the internet to coordinate and control its global production system as an example.

Note: Kindly look through the “Category” section for the complete list of articles published. Don't forget to subscribe and share our articles as many times as possible on any social media platform.