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Issues in Globalization Suresh George Lecture Plan • • • • • • • Snapshot of globalization Issues in economic globalization Population Shifts Urbanization Technology and future Climate Change Globalization and War SNAPSHOT OF GLOBALIZATION Who own the food products we eat? 4 How does globalization affect us What is the future of the Automobile in the Global Economy • Take 5 mins to discuss in groups about what you think the future will be for the automobile? Urban Migration= Rise of Megacities= Grid Locks= No need for cars? Source:bloomberg Gridlocks= Traffic Jam= Infrastructure issues= Bid Budget= Environment Issues No Parking in cities Urban dwellers will order a ride to work on their phones Driverless Car picks up Are we looking for mobilty or the ‘40 Percent Ego’ driver? The Emerging Markets of China/India? traffic controlled by satellites and sensors Cars That Communicate with Each Other and the Road Product Modifications= New Opportunities? Electric Networked-Vehicle driverless taxicab automated “driverless” cars ISSUES IN ECONOMIC GLOBALIZATION Shifting Economies The dominance of the US$? Source:http://www.bloomberg.com/infographics/2014-07-16/u-s-dollar-sustains-global-dominance.html DEMOGRAPHIC SHIFT Massive Population Issues with Poverty and Inequality • For 40 years, the challenge has been of a rich world of 1Bn people facing 5Bn poor people. • With rapid development in many of the so called ‘ poor countries, about 80% of these population have experienced transformational developments, (Collier, 2008) • The real challenge today is the bottom group of countries that are failing because of poor governance, conflict & poverty trap. • The global economy will have to factor in the threats & challenges posed by the bottom 1Bn people URBANIZATION Urbanization levels Source: UN Population Division, World Urbanization Prospects (2011 revision). Megacities POPULATION The Effects of Population Shifts • • • • • • A need for population stabilization Urbanization and housing problems Education and population movement The aging population in the developed world Balance of the sexes Population and employment Food Security • • • • Prices: Food prices are lower , but poor stock levels may increase prices Growth in food demand Emerging market economies, especially China, are the largest source of increased demand for major crops In addition, increases in biofuel production could divert crops away from food use Corn is particularly vulnerable to supply shocks because it has the lowest stock-to-use ratio among major food crops TECHNOLOGY A connected world Source: PwC CLIMATE CHANGE GLOBALIZATION OF WAR Geopolitical Trends • The distribution of global political, economic, and military power is shifting: The rise of China, (most populous country) + India, the (Largest democracy,) will continue to reshape the international system- (QDR,2010) • The North Korea/Syria/Turkey/Iraq/Russia/US effect on Business • Globalization has transformed technological innovation while lowering entry barriers for a wider range of actors to develop and acquire advanced technologies. The non- state actors will exert influence. • The rising demand for resources, rapid urbanization of littoral regions, the effects of climate change, the emergence of new strains of disease, and profound cultural and demographic tensions in several regions are just some of the trends whose complex interplay may create future conflicts War and Global Business • • • World military expenditure in 2013 totaled $1747 billion, around 2.4 per cent of world GDP Military spending has fallen in the West-that is, in North America, Western and Central Europe, Oceania while it has increased in other regions. Why is the economic burden of a country's military forces on their economy increasing along with growth? • • • • • • • • • • • References Collier, Paul (2008) The Bottom Billion. Why the poorest Countries are failing and What can be done about it, Oxford University press. New York Guillen, M.F & Ontiveros (2012) Global Turning Points, Cambridge University Press Dicken, Peter (2011) Global Shift- Mapping the Changing Contours of the World Economy. 6th Edition. Sage Publications. UK Quadrunieal Defence Review Report (2010) (online)http://www.defense.gov/qdr/images/QDR_as_of_12Feb10_1000.pdf ( 09/07/2011) IMF(2014) World economic outlook : a survey by the staff of IMF. Washington, DC . USA. (Online) http://www.imf.org/external/pubs/ft/weo/2014/update/01/pdf/0114.pdf (24/02/2014) http://blogs.worldbank.org/ IMF (2014) World economic outlook: a gradual upturn in global growth during 2013. Washington, DC. USA. (Online) http://www.imf.org/external/pubs/ft/weo/2014/update/01/ IMF(2014a) Infographics, http://www.imf.org/external/pubs/ft/weo/2014/update/01/images/WEOinfographic.jpg WESP (2013) World economic situation report: Global Economic outlook 2013 revealed. New York. (Online) http://www.un.org/en/development/desa/news/policy/wesp2013.html WEO (2014) Global Risks 2013 – Ninth Edition