Drivers of Globalisation for Economies and Businesses

TASK 3

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
What are the current drivers of globalisation for economies of world and individual businesses
.....................................................................................................................................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
Globalisation has paved the way for doing businesses internationally and flow of goods
and services are taken place at a rapid rate. Present report deals with listing out current drivers of
globalisation for economies and businesses around the world. The main drivers of globalisation
such as containerisation, technological change and less protectionism will be explained with
significant examples in the report. Major drivers of globalisation will be summarised and impact
of these drivers on world economy will be examined. Thus, impact of globalisation on
economies and businesses will provide useful insight about the topic.
MAIN BODY
What are the current drivers of globalisation for economies of world and individual businesses?
The globalisation has led to way the businesses compete in effective manner through free
flow of goods in the international market. The current drivers are listed below-
Driver 1: Containerisation
It is the system consisting of freight transport (inter-modal) by utilising inter-modal
containers and have structured dimensions. This has cut down the costs of ocean shipping which
helps in bringing prices in manufacture closer to prices in export market (Globalisation. 2018).
Example- In 2009, 90 % of non-bulk cargo worldwide is moved by containers in which 26 % of
container transhipment has been carried out in China. In addition to this, 105, 976, 701
transhipments were carried in China, in which 21,040,096 taken place in Hong Kong and
34,299,572 in the US. This particular factor has influenced globalisation because of wide reach
to customers, goods can be shipped by eradicating costs up to a high extent and raise exports.
This has helped into reduction in shipping costs making economies of scale.
Driver 2: Technological change
The technology has transformed the way economies and businesses are getting together
for supplying products to customers globally (Semenza and et.al., 2016). Increased in efficiency
of output and decreased time of processing of goods and services such as input are major
technological change observed in the recent past (Najam, Runnalls and Halle, 2016). Example-
Businesses have invented vacuum cleaning robot, people are benefited as they just push a button
and all cleaning is done by robot which is called increased efficiency through technological
change. It has also influenced globalisation as technological advancement has eased-off day-to-
day activities as it is time-saving and cost-effective which is liked by customers. This factor has
1

influenced and attracted globalisation as faster services can be provided to consumers with
minimum human effort with enlarged efficiency.
Driver 3: Less Protectionism
The protectionism is the way which restricts domestic industry from the foreign
competition in effective manner (Amadeo. 2019). It reduces competition from international trade.
However, protectionism is reduced but not eliminated so as to protect domestic markets.
Example, EU and US are negotiating on Transatlantic Trade and Investment Partnership aiming
for promoting trade and economic growth in a better way by lifting barriers to trade restrictions
and ensuring simultaneous growth of countries. This will benefit businesses of both countries as
well (Cuervo‐Cazurrra, Mudambi and Pedersen, 2017). It has influenced globalisation as free
flow of goods are now possible with decreased trade restrictions in order to protect domestic
market from foreign competition. Thus, profits are maximised as if particular product fails in one
country which can be improvised by making it profitable in other country. Thus, losses are
mitigated due to less protectionism. This factor has attracted globalisation as customers demands
can be met from goods which are not available in their domestic country. But with the help of
less protectionism, goods can be imported, thus, satisfying their demands.
CONCLUSION
Hereby it can be concluded that globalisation plays crucial role in the economic
development of countries in effectual manner. With the help of globalisation, international trade
becomes possible as goods and services are offered to wide spectrum of customers. The current
drivers of globalisation such as technological change, containerisation and less protectionism
have led to affect economies and businesses up to a major extent. On the other hand, it can be
ascertained that globalisation has increased the efficiency of output as manufacturing and
distribution of goods have transformed in a better manner leading to cost-effective and timely
mechanism.
2

REFERENCES
Books and Journals
Cuervo‐Cazurrra, A., Mudambi, R. and Pedersen, T., 2017. Globalization: R ising
skepticism. Global Strategy Journal.7(2). pp.155-158.
Najam, A., Runnalls, D. and Halle, M., 2016. Environment and Globalization: Five Propositions
(2010). The Globalization and Environment Reader. p.94.
Semenza, J. C and et.al., 2016. Observed and projected drivers of emerging infectious diseases in
Europe. Annals of the New York Academy of Sciences.1382(1). pp.73-83.
Online
Amadeo. 2019 Trade Protectionism and Its Methods With Examples, Pros, and Cons [Online].
Available Through: <https://www.thebalance.com/what-is-trade-protectionism-3305896>.
Globalisation. 2018 [Online]. Available Through:
<https://www.tutor2u.net/economics/reference/globalisation>.
3