Globalisation, losing party ?
Globalization has long been considered a silver bullet that could propell a country's economy to great heights, but is that always true ?
There have been arguments that it is a relatively new phenomenon, but that is not true too!
In reality, we are in the midst of the world's second era of globalization. The first great globalization occurred from the middle of the 19th century to the eve of World War I, fueled partly by liberalized trade and immigration policies and partly by steep declines in transportation costs. This earlier era has been studied extensively by economic historians. What these investigations have shown is that by 1913, globalization—whether measured in flows of goods and people or in the convergence of national economies' prices and wages—had been realized to an extent never before seen.
I can see Globalization invading our quarters right in the 19th century, actually even earlier when the British started tampering the minds of Indians and eventually conquered them. They surely gave us their language, institutions and communications networks..well, they took just too much in return. Globalization, that is normally talked about is more about trade crossing national boundaries bringing in economies of scale, improving quality wherever it permeates. It has been there for a long time but has received a lot of attention recently because of an explosion in communication technologies.
Globalization is not only about seeing a Walmart, McDonalds or a BurgerKing in your country. It is not just confined to the retail sector. It was widely seen in the Mfg sector (Remember those "Made in China" labels :)) and now there is explosive growth being witnessed in the Service sector, all because of one thing 'Communication'! A good communications network makes geographical distance a moot point for the service industry..
So, what does all this mean for us. We are surely shifting our focus from a more reginal, national mindset to an international mindset when we do anything (True for all entrepreneurs). We have let other countries invade our space in almost every sector and at the same time we can reach out and serve a bigger audience. But, serving a bigger audience, is that possible for a company with low finances? I surely understand that "bigger" corporates would surely have the financial muscle and the mettle to deal with this (in fact, like it), but will a poor farmer/poor equipment manufacturer be able to compete against the cost efficiencies that these huge multi-national companies have realised? Probably not! Will it kill entrepreneurship at that level, surely! But, will it make better entrepreneurs, SURELY. So, what do we do as a country? I surely see this as a evil necessity :), but we can sing a happier tune adopting it, if the government policies are conducive to do that. If it can grant loans more easily for these "small" players and arrange for programmes/bootcamps of how to compete against such influx, talk about the benefits of consolidation and then competition, it would make it a lot more easier for these players.
Globalization has also been alleged with increasing pollution and "encouraging" child labor in poorer countries. But again, there are flip sides to this too. It surely increases the per capita income of people in poorer countries making it easier for them to buy vehicles that increase pollution but at the same time "imported machinery" used in manufacturing is a lot less polluting! And coming to child labor, well since the per capita per household increases, there might not be any necessity to send children to work! But forces of need for more labor, greed for money might foster it. All this again can be averted with "good government policies".
I guess I can go and on and on about this thing, but to summarize my thoughts (as if you care about it !), I think Globalization is not something to jump in, it should be done with a plan..adapting to it while adopting it!!!
There have been arguments that it is a relatively new phenomenon, but that is not true too!
In reality, we are in the midst of the world's second era of globalization. The first great globalization occurred from the middle of the 19th century to the eve of World War I, fueled partly by liberalized trade and immigration policies and partly by steep declines in transportation costs. This earlier era has been studied extensively by economic historians. What these investigations have shown is that by 1913, globalization—whether measured in flows of goods and people or in the convergence of national economies' prices and wages—had been realized to an extent never before seen.
I can see Globalization invading our quarters right in the 19th century, actually even earlier when the British started tampering the minds of Indians and eventually conquered them. They surely gave us their language, institutions and communications networks..well, they took just too much in return. Globalization, that is normally talked about is more about trade crossing national boundaries bringing in economies of scale, improving quality wherever it permeates. It has been there for a long time but has received a lot of attention recently because of an explosion in communication technologies.
Globalization is not only about seeing a Walmart, McDonalds or a BurgerKing in your country. It is not just confined to the retail sector. It was widely seen in the Mfg sector (Remember those "Made in China" labels :)) and now there is explosive growth being witnessed in the Service sector, all because of one thing 'Communication'! A good communications network makes geographical distance a moot point for the service industry..
So, what does all this mean for us. We are surely shifting our focus from a more reginal, national mindset to an international mindset when we do anything (True for all entrepreneurs). We have let other countries invade our space in almost every sector and at the same time we can reach out and serve a bigger audience. But, serving a bigger audience, is that possible for a company with low finances? I surely understand that "bigger" corporates would surely have the financial muscle and the mettle to deal with this (in fact, like it), but will a poor farmer/poor equipment manufacturer be able to compete against the cost efficiencies that these huge multi-national companies have realised? Probably not! Will it kill entrepreneurship at that level, surely! But, will it make better entrepreneurs, SURELY. So, what do we do as a country? I surely see this as a evil necessity :), but we can sing a happier tune adopting it, if the government policies are conducive to do that. If it can grant loans more easily for these "small" players and arrange for programmes/bootcamps of how to compete against such influx, talk about the benefits of consolidation and then competition, it would make it a lot more easier for these players.
Globalization has also been alleged with increasing pollution and "encouraging" child labor in poorer countries. But again, there are flip sides to this too. It surely increases the per capita income of people in poorer countries making it easier for them to buy vehicles that increase pollution but at the same time "imported machinery" used in manufacturing is a lot less polluting! And coming to child labor, well since the per capita per household increases, there might not be any necessity to send children to work! But forces of need for more labor, greed for money might foster it. All this again can be averted with "good government policies".
I guess I can go and on and on about this thing, but to summarize my thoughts (as if you care about it !), I think Globalization is not something to jump in, it should be done with a plan..adapting to it while adopting it!!!
posted by Vijay Challa | 9:36 AM
0 Comments:
Post a Comment
<< Home