What Is Globalization - Business

Globalization is indicative of the fairly recent trend that has resulted in the integration of the economies, societies and cultures of the world via trade and advances in communication. It may also describe the incorporation of domestic economies into the international economy via the means of direct foreign investment, migration, the dispersal of technology and trade.

In general, the chief factors that will foster globalization are technological, political, biological and economical. It may also refer to the increased circulation of information as it relates to language, ideas and popular culture throughout different nations worlwide.

It is said that the rise of globalization was in part a response to World War II. Politicians believed that by integrating the global communities, the probability for prosperity would be more likely, by fair trade and the potential to destroy barriers. This idealism prompted the Bretton Woods conference, where politicians began developing the framework for international trade and finance. It also led to the implementation of a few international institutions that would direct this process.

The institutions that were then put in place include: International Bank for Reconstruction and Development also known as the World Bank and the International Monetary Fund or IMF. The process of globalization has been enhanced by the development of specific technologies that have allowed the decline in the cost of trade and trade negotiations rounds. Under the General Agreement on Tariffs Trade or GATT many former trade regulations were done away with to open up free trade.

The agreements that were drafted have since prompted a decline in the barriers that were at first used in international trade. GATT and the WTO have been responsible for certain other results including:

* Encouraging free trade by ending tariffs, the creation of free trade zones that use little to no tariffs.* Decreasing transport costs, specifically by establishing the use of containerization for shipping via sea.* Decreased or total elimination of capital controls* Decreased, total elimination of subsidies usually awarded to local businesses.* The creation of subsidies used for global corporations* Stringently enforced intellectual property laws in most states with greater limitations.* Recognizing the intellectual property rights of foreign territories.

Globalization also occurs in cultures and has been encouraged by the creation of specific technologies. In general it is agreed that this led to the wide acceptance of western ideals and culture. While this initially seemed to be a way of bridging the gap some people soon complained that their own special cultures were being slowly eradicated.

Since globalization became prominent the total world exports have increased from 8.5% in 1970 to 16.2% in 2001, meaning it almost doubled in the past 30 odd years.