Changes in pattern of Globalisation – UPSC GS1

NOTE: Good content for essays on globalisation
Globalization in the past
  • Human beings have travelled to distant places to survive, trade, and communicate.
  • Harappan seals dating back to 3000 BCE found in Mesopotamia indicate trade and contacts between ancient civilizations.
  • The number Zero, algebra, gunpowder, religions spread around the world like wildfire.
  • Globalization isn’t ending, it’s changing. World is witnessing emergence of a new global economy, an economy without borders driven by digital rocket boosters.
  • Current phase of digital technology-enabled globalization has disturbed the fabric of human society and sovereign states.
  • Companies that have learnt to thrive in this increasingly connected world have built large global businesses at astonishing speeds.
  • Economic nationalism and protectionism are growing.
  • WTO data indicates that India and the US rank among the countries with the most number of trade restrictive measures in recent years.
  • At the same time, the ability of multilateral institutions to establish and enforce shared rules seems to be weakening.
  • The dominant role of the multilateral financial institutions that traditionally have provided global capital appears to be receding, as new financial institutions, such as China-backed Asian Infrastructure Investment Bank and the New Development Bank, emerge.
  • Advanced digital manufacturing and global digital platforms are changing the structures in the world economy.
  • Advanced digital manufacturing systems (“Industry 4.0”), for example, are enabling businesses to alter their global production and distribution networks by making it feasible to operate smaller, more flexible facilities closer to customers, instead of concentrating production in large plants in countries with low labour costs.
  • The global market has been growing as both traditional companies, such as General Electric, and relative newcomers, such as Uber, Airbnb and India’s Flipkart, gain access to borderless global markets through their information technology platforms and networks of local partners.
  • Together, these shifts are leading to a different kind of globalization, more-fragmented, with decentralized supply chains and more countries involved. This creates a host of challenges for global corporations.
  • The emergence of a new model of globalization does not mean, of course, that the old ways of engaging with the world will suddenly become irrelevant. The precise contours of the new global economy have yet to be defined.
How has globalization impacted nation-states at present?
  • MNC’s began the wave by selling dreams and their products. As they expanded beyond boundaries, Non-profit organizations followed suit, enabled by advances in telecom and communication.
  • This was famously described by Jessica Mathews in her 1997 article, Power Shift. She suggested that these networks were inverting traditional nation-state borders, which were established by the 1645 Peace of Westphalia.
  • Anne-Marie Slaughter added to Mathews “new-medievalist” world order that instead of being a weakened State was being transformed into a new trans-governmental order. Here the governments across the world were connected and working together on fields like banking, antitrust environment or justice.
What were the challenges associated with globalization?
  • Stieglitz highlighted the issue that MNC’s were impacting the local business like street vendors.
  • Some opined that these networks also supported the rise of transnational terror networks.
  • This also created a generation of ‘Baby Zoomers’ (new ‘generation’ of babies) driven by social media, e-commerce and AI.
  • Virtual transnational networks have increased inequalities, particularly during pandemics. Those with access to technology and capital have enjoyed growth and employment. Others have been left behind.
  • This shows that the view of Yuvan Harari’s reality of two worlds, one of the people with technology and capital and another of unskilled and unemployed workers, seems to be coming true.
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