Globalisation is the process by which the businesses or other organisations develop international influence or start operating on an international scale.
Contrary to the general view, globalisation dates back to many thousands of years. For thousands of years, people-and, later, corporations-have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages.
However, policy and technological developments of the past few decades have spurred increases in cross-border trade, investment, and migration so large that many observers believe the world has stepped into a qualitatively new phase in its economic development. Since 1950, for example, the volume of world trade has increased by 20 times, and from just 1997 to 1999 flows of foreign investment nearly doubled, from $468 billion to $827 billion.
The current rage of globalisation is attributable to policies that have opened economies domestically and internationally.Many international commerce-friendly policies have caused an astounding surge in world trade.
Post the Second World War, and especially during the past two decades, many governments have adopted free-market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to commerce and have established international agreements to promote trade in goods, services, and investment. These conducive measures gave birth to opportunities for global trade. Taking advantage of these new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalisation, therefore, is an international industrial and financial business structure.
Globalisation is deeply controversial. However, proponents of globalisation argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalisation claim that the creation of an unfettered international free market has benefitted multinational corporations in the western world at the expense of local enterprises, local cultures, and common people. Resistance to globalisation has therefore taken shape both at a popular and at a governmental level as people and governments try to manage the flow of capital, labour, goods, and ideas that constitute the current wave of globalisation.
Globalisation is a fascinating spectacle that can be understood as global systems of competition and connectivity. However, an increase in integration has not brought increased equality. Globalisation creates winners and losers among countries and global corporations, making competition the beating heart of the globalisation process.
A closed economy by choice, India formally adopted globalisation when the new economic policy of 1991 came into force. Mounting debts and pressure from IMF had left the nation with no other choice but to go global. The process of globalisation has been an integral part of the recent economic progress made by India. Globalisation has played a major role in export-led growth, leading to the enlargement of the job market in India.
One of the major forces of globalisation in India has been in the growth of outsourced IT and Business Process Outsourcing (BPO) services. The last few years have seen an increase in the number of skilled professionals in India employed by both local and foreign companies to service customers in the US and Europe in particular. Taking advantage of India’s lower cost but educated and English-speaking work force, and utilising global communications technologies such as voice-over IP (VOIP), email and the internet, international enterprises have been able to lower their cost base by establishing outsourced knowledge-worker operations in India.
There is no denying the fact that globalisation India and its citizens have realised many gains from globalisation. Access to umpteen number of brands, billions of jobs that have emanated from the establishment of multinational companies and the increase in forex reserves of the country are all effects of globalisation. Indian citizens have also experienced an increase in the standard of living by opening up of the country’s trade routes to the world. However, there exists a contrary argument to that.
The domestic producers fear marginalisation and pulverisation due to the entry of foreign and often better quality products. It was to safeguard the domestic producer from foreign competition that India had initially adopted a closed economy stand with very limited access to foreign producers into Indian markets. However, despite the fact that we are a nation that had embraced globalisation long ago, there is still a debate in the country over permitting FDI in some sectors.
Just about a year back, FDI in retail was rolled back because of huge resistance against the move from many political parties who sought to protect the interests of domestic retailers.
Globalisation has had both desirable and undesirable consequences for India and the world. Where it has accelerated progress in some countries, it has also widened the gap between the rich and the poor in others.
Thus, globalisation has the fair and rough share of its impacts and thus we can surely hope for more advancement in the global economy due to this process.