Global Economy Essay

Globalization is corporate driven; it’s the system which allows trans-national business and finance to invest what they want where they want; to produce what they want; and to buy and sell what they want, everywhere, with the fewest restrictions possible coming from labour laws, social conventions or environmental regulations. Globalization is also finance driven. Corporate-led, finance-driven globalization has been extremely successful (George 2008, p. 1). Globalization has been extremely beneficial to those at the top of various societies. The benefits of globalization for ordinary people have been problematic particularly in the mature capitalist countries. Those who advocate for neo-liberal globalization claim it thrusts the floor upwards for everybody an extremely debatable proposition in a world where a billion people exist with a buying power of a dollar a day and approximately half the world with less than two dollars a day (George 2008, p. 1). Multi national corporations, finance corporations and wealthy persons contribute less and less proportionally in taxation to national budgets. This means the ordinary people, consumers and local businesses pay more than their reasonable allocation (George 2008, p. 1). More and more people are doubtful as to whether globalisation has delivered on its promises and benefits. 57 % of the people recently interviewed in the G7 countries are of the opinion that globalisation has moved too fast in recent years. In twenty seven other countries, 64 % were of the opinion that the advantages and troubles of globalisation were unjustly shared. Only in ten out of the thirty four countries polled did the bulk of the people think of globalisation as a positive factor for local economic development (Falk 2008, p. 1). World Sourcing and Outsourcing In the corporate world, companies are exploiting the emerging markets in line with globalization. A company like Levono has its products, human resources and facilities in 160 countries around the world. Market trends such as outsourcing have created a time zone that universal. This means that the company can access the resources it needs from any part of the globe where the costs are lower at any time regardless of its time zone. It is a top-down strategy designed to save on costs by handing the non-core operations to a third party who offers the lowest price. World sourcing is a business strategy that influences the positive aspects of globalization to maximize on value and quality that the company delivers to customers globally (Walker 2008,p. 3). Companies in the global economy can source for everything where the best talent exists and like wise sell where the best market is located. Companies that practice world sourcing create value twenty four hours a day. The global distribution of resources such as talents and markets has created a nucleus of excellence strategy. A company in this case can have its marketing department in India, designing being done in Japan, its fulfilment centres located in North America and the manufacturing facilities located in China, Latin America, India and Europe. This distribution of resources also means as companies tap into the skills and talents spread across the globe, career choices then cease to be hindered by geographical boundaries (Walker 2008,p. 5). World sourcing as a globalization strategy is envisaged on the principle that brand cuts across nationality and geographical boundaries. The more a company extends to the entire world for the finest ideas, human resources and processes, the more it develops in the refined essence of its brand name. It is appraised not by nationality, but according to the excellence of its products, services, degree of corporate social responsibility, governance, environmental practices, transparency, and ultimately, the degree of value it conveys to customers globally (Walker 2008, p. 7). Global corporations that world source their products and services are exposed to the inquisitive light and censure from challenging consumers and government watchdogs in different countries. They can only build confidence by complying with the highest principles of governance, compliance transparency, and excellence (Walker 2008, p. 7). Global Networking Debate on networked economy began as early as 1865 in Paris. However it is the advancement of Information and Communication Technology (ICT) that has turned the world into a truly global village. This means a global networked economy. By definition a global village or a global networked economy means that there is instantaneous relay of information from one part of the globe to another. The connectivity of the internet today has contributed greatly towards global connectivity (Tarjanne 1997, pp. 2-3). The International Telecommunication Union (ITU) has played a vital part in networking based on global connectivity. The Radio Regulations, one of the inter-governmental treaties of which ITU is the guardian recognizes the electro-magnetic spectrum as a universal resource of humanity. A Recent development in this field is the advancement of satellite handsets, the Global Mobile Personal Communications by Satellite (GMPCS). Satellite systems will enable access to essential telecommunications from any part of the globe regardless of time zones and geographical boundaries (Tarjanne 1997, p. 4). However global networking is still not yet fully attained. Access to technology is largely influenced by wealth. Approximately 97% of all Internet hosts are based in the developed countries which represent 16% of the world’s population. There are approximately fifty countries that still lack an Internet host within their boundaries. One of the objectives of the ITU is to support the extension of the benefits of the new telecommunications technologies globally (Tarjanne 1997, p. 5).