As services produced within a country’s boundary within a

As described by Jan De Vries globalization
can be distinguished between ”soft” and ”hard” globalization.

Ø  Soft globalization – It started during the times of 1571 via manila where “silver”
trade was conducted between Columbian & Magellan.

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Ø  Hard globalization – It is de?ned by O’Rourke and
Williamson as ”integration of markets across space from the 18th
century onwards. The, globalization which was started in the West in 1st
half of 18th century, when markets in Europe, within Europe &
the U.S.A., started to integrate with each other.

Inequality across the world developed
with rise of Industrial Revolution, in 19th century starting, which
helped few countries to grow exponentially. 
This revolution helped them to maintain the front row till the time of
globalization took off.  Due to globalization some emerging nations turned
as global engines of growth.  The economic inequality across countries
declined since mid-1990’s. 

Components of Globalization

The
components of globalization include GDP, Human Development Index and Industrialization.
The GDP measures market value of all finished goods and services produced within
a country’s boundary within a given year, which helps to calculate overall
economic output. The Human Development Index has 3 components: Country’s
population’s life expectancy, Literacy rate & Income, Education &
Knowledge. Industrialization helps to drive technological innovation, economic
development & social change

The Economic Impact on Developed Nations Due
to Globalization

1)     
Risk reduction through diversification can be achieved easily

 

2)     
Companies can deal with international financial institutions for
better support 

 

3)     
Increase partnership with local and MNC’s.

 

4)     
Advanced technology/techniques can be used for production at the international,
national and sub-national levels.

 

5)     
World’s different financial markets can integrate in a more better
& efficient way

 

6)     
Evolved production methods will change the working process, labor
conditions etc.

 

7)     
New technology can be accessed and can be utilized in business
processes

 

8)     
Improves specialization, economic integration & economies of
scale  

 

9)     
Help to tap new & wide range of distribution channels 

 

10)   Entry for new business organizations is
provided easily, which will increase the FDI in that country.

 

Globalization Played Against
the West

The world we live in has been
continuously evolving since many ages and this led to inequality among
different nations. The income gap between a citizen of India or an African
nation compared to Western countries upper class society is very high.

When Europeans first opened to global
economy for countries like Asia, Latin America & East Europe, they did not
expect that globalization, will make things or services so cheap, turn up the
standard of living of the people and increase innovation & technology.  It did not anticipate the huge migration of
people between nations. 

But the real fact is that, the
biggest losers of the globalization process are the “global upper middle class”,
who lie in the 75th to 90th percentile of
income distribution they are usually the poorer section of the population in
Western countries. These groups have not seen rise in their income levels for
the last 2 decades and their income stood stagnant, while others got increased

Western nations competitive edge
industries like hi-tech firms, aerospace corporations, pharmaceuticals are now
facing tough competition from industries of emerging countries and these
companies are eating up the share of previously well-established companies. The
private companies in Europe are not able to offer any employment benefits to
their employees after retirement and the government run corporations might stop
giving the benefits to the employees in few years because of their collapsing
economies.

American situation is no way better
than european nations and their real disposable incomes are fixed for 14-years.
Industries like textiles, shoe-making, machine tools etc. have vanished over
the years in these nations.

There was a new middle / upper middle
class has emerged in Asia, middle classes in the Western nations have not seen
any development. This leads us to the risk of western governments to halt or
tighten the globalization process through trade barriers & strict immigration
policies. This stagnant situation of middle-class in West may last long to
another 5 decades or more.

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