Globalization By: Allison Chen

Overview  “Globalization is a process that results in the growing interconnectedness of the world”  Driven by technological innovations  Effects similar to chaos theory

Main Controversies  Trade  Environment  Media  Development  Women  Investment  International law  Technology  Culture  Migration  Human rights  Energy  Education  Health

Economic Globalization  Accelerated in 1980s and 1990s  free-market economic systems  Reductions in barriers to commerce and international agreements  Growth and development levels increase  higher wages, shift from labor-intensive to more capital and knowledge intensive industry  Foreign direct investment (FDI): measure of foreign ownership of productive assets, such as factories, mines and land  Largest form of private capital inflow to developing countries  Brings technical information, jobs, and transmission of ideas  Most direct effect on people through their work and employment  Local markets exposed to global competition

Volume of World Merchandise Trade Growth

Multinational Corporations  Multinational corporation (MNC): a business organization whose activities is located in multiple countries and is the organizational form that defines FDI  Dominant role in trade and financial interactions globally  Creates competition between countries vying for investment  Political as well as economic force  Comprises one-third of the world’s exports  Inequality: wealth and strong bargaining position relative to the often poorer (and weaker) developing countries in which they invest

MNC Example: Nike, Inc.  Headquarters: Beaverton, Oregon  Development, marketing, and selling of athletic equipment  Manufacturing locations: 45 countries, factories mostly in Asia (Indonesia, China, Taiwan, Indian, Thailand, Vietnam, Pakistan, Philippines, and Malaysia)  Operates in 120 countries and has over 20,000 employees

Technology  Promotion of new products and ideas across nations and cultures  channels to exchange information  Internet creates new ways to make transactions and run businesses  Individuals connect globally and collaborate on ideas and technological innovations

Inequality  Income gap between rich and poor nations increasing  Capital directed at capital-generating industrial sectors  Alienation, massive unrest, and political and social instability  Spending directed away from social welfare and towards export sectors  Race to the bottom: a dynamic whereby companies seek the lowest level of regulation and taxation  lowering of standards of labor, human rights, and environmental protection

Global Governance  Creation of global institutions (ex. IMF, WTO, WHO, and World Bank)  Loss of national sovereignty in certain issues  Treaties are strongest and most binding type of law  International Court of Justice (UN): settles legal disputes  Enforced through reciprocity, shaming, and collective action

Environment  Global warming caused by fossil fuel combustion, the burning of forests, and biomass combustion  Produce halogens (carbon dioxide, methane, etc.)  Ozone depletion  Exploit resources of countries with little regard to environmental cost  Illegal international wildlife trafficking  Spread of invasive species

Cultural Globalization  Diffusion of Western culture  Defense of local and traditional cultures  Languages  countries trying to protect languages from the immigration of foreign words  Democratization  Entertainment translated into multiple languages

Major Languages Spoken Around the World

Benefits of Globalization  Allows for countries to specialize: labor, natural resources, and technology  Increases the variety of goods and services available  Increased competition spurs domestic firms to invest in equipment and software embodied with the latest technologies  Poor countries provided access to new ideas and technologies

Downside of Globalization  Creates people in certain industries who cannot compete with foreign manufacturers  Move production overseas for cheaper labor, creating increased unemployment  Rising income inequality between the low-skilled and high-skilled workers