The Process of Globalization - Essay Example

? Analysis of the process of globalization [Supervisor’s Analysis of the process of globalization Introduction Globalization is the combination of various practices which includes sharing of knowledge, ideas, lifestyles cultures and trends that increase the interconnection between two nations. The paper attempts to critically analyze the term globalization from different perspectives and from different views of authors. The paper also discusses the key drivers of globalization over the past 20 years and attempts to analyze different aspects of globalization. Furthermore, the paper also discusses PESTEL Analysis and what benefits does it have in UK economy and their drawbacks. Lastly, it describes the future of globalization. The term ‘Globalization’ is defined as a process of integration which has been derived from the human connectivity and their exchange of ideas, products and different aspects of their culture and trends. In other words globalization is represented as a new term for changes in International relations which was exploited in the end of the twentieth century. Globalization refers to the larger context with respect to the globe rather than in a national context. The advancements and breakthroughs in transportation and telecommunication play an important role in the rise of globalization alongside with the increase use of the internet which has led to the growth in globalization. When economies are interconnected with each other, it has provided an opportunity for globalization to occur (Jones 2010). Globalization has various meanings and it has been the source of argument in the recent decade about its true meaning. Albrow (1990) argues that globalization is far broader concept than interconnection and relations between the different objects. He explained that globalization is referred to all those processes by which different people of the world and different products of the world are incorporated to form a single concept or a society (Gupta 2009). However, many of the terms superseded the previous terms due to change in the nature of the world. Appadurai (1996) suggested that globalization is the process of mixing of the culture with respect to different locations and identities of regions. The author tried to propose that globalization will occur if people from different identities and regions would come together and blend their culture to form one idea is to be known as globalization (Appadurai 1996). Carnoy (2001) defines globalization as the weakening of the state when it cannot cope up with the environment. This implies that if a country fails to adapt to the new conditions of the world in the global environment, then it blends up with the environment itself for keeping themselves alive in the market (Munck 2005). Many scholars have traced back the history to gather information on the origins of globalization which was found to present before the European age of discovery. When people moved to different regions, they tried to adapt to the certain environment and to the cultures of the particular region. It is where the role of globalization play its part when people share different ideas and merge it to become one single idea (Jones 2010). Aspects of Globalization Globalization has both the social and economical aspects, if understood; it can help nations to achieve greater heights of success and growth. In economical terms, it is the rapprochement of countries and their flow of goods and capital from one place to another due to various inventions that has been made by countries. The first wave occurred in the era of economic boom which made Great Britain to realize its capability and brought the nation into foreground. Many scholars term the modern globalization as the increase in the technological achievements of a country which have made possible for people to migrate and allowed the flow of capital and information to satisfy its needs. Scientific reforms and revolution have created new forms of transportation and the rise of the internet which has made globalization easier to its core. All these facilities have promoted the sharing of the knowledge, flow of the capital and enhance desires of people to create mutual associations amongst other countries (Rakic 2006). Thus, many foundations were established to promote the existence of free trade and mutual co-operation of people amongst various technologies rose for its support. Previously, Great Britain had been the country having source of attraction when it had many fleets for trade and had finances and industries to merge different ideas of people and construct a single idea to become the leading economical power (Douglass 2003). However, contemporary globalization has identified a new country to its foreground which has been dominated by USA. Economical globalization has many forms; it may include the trade or sharing of the business process amongst countries. Many businesses plan to produce not merely in their homes but also in other countries for the purpose of either evading the barriers or cutting their cost in the form of achieving cheap labour (Rakic 2006). The social dimensions of globalization have a direct impact in the lives and work of people, and have an impact in their families and societies. Many scholars have raised concerns that globalization have an impact on employment, income and protection of a person in a society. The new ideas affect people in many ways and change their lives accordingly. Social globalization could be defined as when people from different social and cultural background interact and coordinate with each other in different phases of their lives. The life is ever so changing in the current era and the biggest reason for change in our lives is the inclusion of new technology, new thoughts and ideas, change in lifestyles, change in vision and consumer products. This interact is becoming the way for the people to expose towards the new forms of life and different way of thinking (Ergil 2010). Globalization has both the negative aspects and the positive aspects. The positive aspects include the interaction and the sharing of ideas and knowledge among people. The negative aspects include the widening of disparities between the East and West. The uneven wealth distribution is increasingly leading towards civil war and the collapse of economies due to unequal trade relationship (Wirkkala 2010). PESTEL Analysis of UK Economy Political Factor The government of United Kingdom is trying many ways to increase globalization with the help of good relations with different countries. It has developed agreements like World Trade Agreement due to the expansion of European Union. UK is giving subsidies to its local companies to expand its business in various countries to share their expertise. The mutual consent of both countries is essential in the agreement so to have better sharing of ideas and their lifestyles (Oxford 2007). Economical Factor UK is emphasizing on overseas economic growth by producing and marketing their product across the globe. This has been a perfect way to increase global competitiveness in the market by competing with other products from different countries. However, UK has strong currency which makes exporting of its product more difficult because it is less likely for people living outside UK to purchase the particular product due to higher price. As the world inflation is rising, it makes more difficult for UK to cope up with the change in the business environment for UK. It increases higher wage demands from labour and raises the cost of firms. This is the reason why majority of the UK firm is establishing business units outside UK to decrease their cost and increase competitiveness (Oxford 2007). Social Factor Migration of people has increased from UK to other European countries for the purpose of improving their lives in the verge of investing their capital. People are searching for better opportunities elsewhere in order to enhance their living standards. The increase in the ageing population in UK has increased the cost of firms who are bound to pay for their pensions. The demands for related products have also increased in the region which has an impact in the growth of the firms (Oxford 2007). Technological Factor: UK has been the country that is exposed to various technologies in which the use of internet tops the list. It is the way to communicate to different people around the globe to share information and ideas. UK provides online internet services to different countries because it has various benefits for the people as it does not require additional taxation for the purpose. Online buying and selling on the internet and virtual universities have been the great concept which were derived from the country and has become the source for greater revenues (Oxford 2007). Environmental Factor Due to global warming and the frequent climate change has also affected the business of UK. It has given rise to certain industries such as transportation and tourism for the purpose of people travelling in other countries. UK has increased production of products that are user friendly and which does not harm the environment. It has increases business opportunities by focusing on developing products which are more efficient and has less negative effects on the environment (Oxford 2007). Legal Factor UK has internal agreement of human rights which increases the collaboration of the country with other countries in order to improve the situation of the world. UK has designed ways and policies for the protection of environment and helped companies that have promoted the use of environmentally friendly products. UK has undergone many legal changes that have also changed the behaviour of its firms. The recent laws include the protection disabled people and different class people in their increase in the minimum wage and have enforced laws for firms to start recycling their products. It can change the behaviour of firms and customers as people would be willing to buy products that are trying to protect the country’s environment (Oxford 2007). Key drivers for Globalization The main drivers that have driven globalization are the advancement of technology innovations, the changes in economic policies and various political changes. Amongst various technological advancements, the speed of transportation and communication has played its part in the growth of globalization. Massive developments in the mode of transportation have allowed people and goods to be transferred from one place to another without any hurdle (World Trade Organization 2008). The increase use of the international shipping, the development of aircrafts that could fly faster and developments in construction of road infrastructure has allowed trucks and various vehicles to distribute their products around the world. The other change was witnessed in the information and communication sector as new products were made such as iPhone, iPad, android technology, tablet PC’s and buying and selling on the internet has increased the mode of communication between people in cross borders(Bauernfeind 2006). Changes in the production methods and techniques have also influenced change which has produced new products or has made the production system more efficient. In today’s world, firms are more focused on improving their processes and reducing their cost because of increase in global competition. This global competition has increased due to reason that people have access to different varieties of products and are aware of their features due to increased mode of transportation. The decision of countries to move towards oil and gas from coal and increased their dependency of oil is another reason for rapid globalization in past 20 years (World Trade Organization 2008). The political developments have been far more complex in the rapid growth of globalization. The increase in the rate of wars and fighting against terrorism has led to the increase change in the global policies. The war in Iraq, Afghanistan and riots in Syria, Egypt and Libya gives a clear indication in the shift of the global economy policies. Before the Libya war, half of the European market was dependent on the oil which was produced in Libya. But after the war, countries had to change their foreign trade policies for the betterment of their country. The change in the economic policy has also become the main driver of globalization because it has eliminated restrictions that were imposed on free trade and financial transactions among countries. Countries have been forced to reduce their tariff to increase foreign investments and to liberalize their industries for the purpose of increase in competition in the global arena. Exports from Asian market especially China and India have become the greater source for the globalization as it has intensified the competition and has taken into the next level (Ritzer 2010). Conclusion Globalization is the increase in the interrelations and interconnectivity of one country with another country which has incorporated in the society by sharing of knowledge and ideas throughout the globe. Globalization had started when people wanted to adapt to certain environmental and social changes which made them to change their lifestyles. There have been various aspects of globalization in which social and economical aspects have created huge impact in the lives of people. It has enabled countries to achieve success and growth. In economical terms, the flow of goods and capital have played a major part in expanding globalization as people wants to be highly competitive in the global market so they expand their businesses for the sake of growth in their country. Free trade agreements with countries and rise of the internet has increased competition as people have become aware of the products that are offered in other countries and are also easily available to them. UK have been enforcing laws and changing its economic and global policies and providing legislations for the protection of the rights of its people and the environment. The main driver that has led change in the past 20 years is the increase in the technological advancements and change in economic and political systems. Developments in the mode of transportation and changes in the production techniques have allowed firms to reduce their costs and increase their efficiency. Countries have been forced to reduce their tariff and to liberalize their industries for the increase of their growth. Globalization has affected lives of billions of people and earth which has been reflected in the change in the global policies of countries. Globalization has thrived even before the human history and it is still remain the source for countries in improving lives of their citizens. Previously, globalization had been directed by the West but today it set to have rested in the hands of East in which India, China, North Korea tops the list. Globalization would be defined in a new way that it has never been introduced in the human history. Now the globalization has reached to its maximum width and in the future it is going to get deeper and intense. Globalization would likely be faster than ever before and it will expand more rapidly. List of References Appadurai, A., 1996. Modernity At Large: Cultural Dimensions of Globalization. 1st ed. Minnesota: University of Minnesota Press. Bauernfeind, M., 2006. Drivers of Globalization: Integration of Theories and Models. 1st ed. Berlin: GRIN Verlag. Douglass, G., 2003. The globalization of economic life. [Online] Available at: [Accessed 10 September 2012]. Ergil, D., 2010. Social and cultural impacts of globalization. [Online] Available at: [Accessed 10 September 2012]. Gupta, S., 2009. Globalization and Literature. 1st ed. Cambridge: Polity. Jones, A., 2010. Globalization: Key Thinkers. 1st ed. Cambridge: Polity. Munck, R., 2005. Globalization and Social Exclusion: A Transformationalist Perspective. 1st Ed. New York: Kumarian Press. Oxford, 2007. PESTEL analysis of the macro-environment. [Online] Available at: [Accessed 10 September 2012]. Rakic, B., 2006. Economic Aspects of Globalization. Economics and Organization, 3(1), pp.13-20. Ritzer, G., 2010. Globalization: A Basic Text. 1st ed. London: John Wiley & Sons. Wirkkala, R., 2010. Positive and Negative Aspects of Globalization. [Online] Available at: [Accessed 10 September 2012]. World Trade Organization, 2008. World Trade Report: Globalization and Trade. Research. Geneva: World Trade Organization World Trade Organization. Read More