Globalization and Regionalization

David J. Boggs, Ph.D.

Eastern Illinois University

My Childhood Libraries and notebook paper Telephones Cold War Typewriters Import taxes Travel

Globalization Speed: fast Government: democratic (?) Economy: capitalistic (?) Language: English Technology: Internet Competitors: everyone everywhere Leader: USA (?) Powers: multinationals Currency: dollar (plus euro)

Some Terms International Business Imports Exports Globalization GATT, WTO, World Bank, and IMF Born-global MNC or multinational corporation

Globalization Symbols Satellite dish Cargo carriers

(ships)

Internet CNN Global brands

Global Brands

Coca Cola McDonalds Disney Nokia Sony BMW

Elements of Globalization Communication Culture Demographics Economics Politics and law Technology Transportation

Communication English as the lingua

franca Mobile phones Free and low-cost

long distance calls Internet Media Overnight mail

Culture

English Music Movies Television Sports Education Food

Demographics

Urbanization Mobility Family size Sex and age distribution

Economics Deregulation and trade liberalization Privatization and competition for FDI Harmonization of technical,

professional and labor standards Trade groups Focus on innovation to achieve profits Impacts on the skilled versus unskilled

Regional Economic Associations

EU NAFTA MERCOSUR ANCOM or CAN CARICOM CIS

CACM LAIA APEC ASEAN ECOWAS

Politics Democratization International agreements

– Trade– Investment– Intellectual property– Environment– Human rights– Labor– Defense

Technology Intellectual property rights

– Patents– Trademarks– Copyrights

Employee hiring Conferences and trade shows Reengineering

Transportation Planes, trains, automobiles, trucks,

and boats Bigger, better, faster, more More freedom for people, goods, and

services to move about the globe Communications technology

substitutes for some travel

New Systems? 1990s: Globalization replaced the Cold

War as the defining international system, with integration, rather than separation, as the guiding theme.

Today regionalism and the War on Terror seem to take precedence over globalization.

Important Issues and Trends

EU expansion Growth of developing countries Demographics Wider access to communications,

information, technology, investing and finance Weakening of traditional nation states Move from industrial to information economy Corruption as a continuing problem Resource scarcity?

The Electronic Herd (Thomas

Friedman)

Anonymous stock, bond, and currency traders and MNC investors

Individuals, firms, governments, pension funds, hedge funds

“The herd in not infallible” Democratization of finance, technology, and

information

The Electronic Herd Supermarkets of NYC, Chicago, London,

Tokyo, Frankfurt, Hong Kong, Singapore, Bombay, Sao Paulo, etc

Stocks, bonds (everything is securitized), currencies, commodities

Options, forwards, futures, leveraging High and low risks, short and long term, to

hedge or to speculate

Discussion How is international business different

from domestic business? Why do firms engage in international

business? What are benefits and harms from

globalization? Name countries that are more “global”

than others. Why do you think they are?