Transcript What About Globalization?

What About
Globalization?
Stefania Reginelli
Universita’ Politecnica delle Marche
May 14th, 2005
Definition
 “Globalisation
is a process by which the
market and the production of different
countries started being more dependent of
each other after the creation of the market
of goods, services, capital and technology.
It is not a new phenomenon, but it began
many years ago.”
(European Commission’s Annual Economic Report, 1997)
Principal Causes
 Technological
Progress
 Political and Institutional Changes
Principal Causes
 Technological
Progress
 Political and Institutional Changes
The Three Stages of Technological
Progress
 1st
stage: from 1870 to the end of XIX
century
 2nd stage: from 1945 to 1980
 3rd stage: started at the end of XX century
1st stage: Technological
Discoveries
 Faster
and stronger ships with iron body
and submerged screw were created in
1870
 The Suez Canal was opened in 1869
 Trans-Atlantic telegraphic services were
created to connect London to New York in
1866 and Melbourne to Buenos Aires in
1872
2nd stage: Technological
Discoveries
 The
telephone: a new means of
communication
3rd stage: Technological
Discoveries
 Internet
technology
Globalization: not a neverending
process

Globalization stopped by:
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
The two World Wars
The 1929’s Depression
The Protectionism
Worldwide GDP
1870
1914
1950
1980
2000
Principal Causes
 Technological
Progress
 Political and Institutional Changes
Major Examples
 De-Regulation
 Opening
of ex-Socialist countries to
international market and to international
investment and exchanges
Major Consequences
 Reduction
in the costs of deals
 More flexibility to enterprises
 Development of sub-supply
 Specialisation on different production
stages
• Competition increases
• Prices are lower
• Companies become international
International Enterprises and
Hosting Countries
 Can
the activity of International enterprises
have a positive influence on hosting
countries?
International Enterprises and
Hosting Countries (cont’d)
 The




effects depend on many conditions:
how international companies enter the
economy of foreign countries
the goal of international enterprises
the characteristics of the exported production
activity
the characteristics and the structure of the
economical system in which the tecnological
innovations are introduced
Main Problems
 International
enterprises sometimes do not
export R&D and technological production
 Hosting countries become dependent on
international companies
 This calls for:


MARKET CONTROL
SUSTAINABILITY
A Famous Quote…
 “The
rapid process of globalisation of
economic system needs to estabilish who
is responsible for welfare and for the
exercieses of the social right. Free market
is not able to do such a thing on its own.
There are a lot of human needs that free
market doesn’t consider”
(Giovanni Paolo II January 1st, 1999)