Which of the following describes the effect of economic globalization on wealthy nations like the us

1 Definition and Context

Economic globalization involves a wide variety of processes, opportunities, and problems related to the spread of economic activities among countries around the world. There have been many periods in which it occurred, most recently including the latter nineteenth century to WWI, the quarter century after WWII, and the late 1960s/early 1970s to the present.

The latest period has involved several major trends, as capitalism has spread throughout more of the world. First, there has been an increased reliance on markets (versus government involvement in the economy) by most nations (including industrialized countries, developing countries, and formerly socialist countries like China with over one-fifth of the world's population). Second, many developing countries have shifted to the more open export-oriented approach based on production for external trade from an import substitution development strategy (production of essential goods for the internal market). Third, multinational corporations (MNCs) in manufacturing, service, and finance sectors have moved into new tiers of countries and have established burgeoning networks of subcontractors in many areas. Fourth, since the late 1970s, economic globalization has also involved structural adjustment policies (SAPs), mandated by the International Monetary Fund (IMF) as a condition for granting countries loans. SAPs require governments to take many steps that further promote globalization. They also require austerity measures that fall heavily on the poor, particularly women. Fifth, there have been shifts in the power of key institutions internationally. On the one hand, the influence of many national governments has been eroded by the rising importance of institutions like the MNCs, the IMF, and World Bank (WB), and trade organizations such as the World Trade Organization (WTO). On the other hand, there has been an increase in nongovernmental organizations (NGOs) advocating for the rights of groups of citizens (see Pyle 1999 for more information regarding each of these five trends).

Economic globalization has involved an increase in the international movements of goods and services, capital (portfolio investments or foreign direct investment by MNCs), and labor as people migrate for employment. This phase of globalization has been particularly facilitated by changes in technology (telecommunications and information technology) and transportation (UNDP 1999). It is often characterized as ‘neoliberalism’ because it is putatively based on increased reliance on markets (and correspondingly less on governments), liberalization of trade and investment policies, and a growing openness among economies. However, economic globalization has occurred in a very uneven manner. Countries are integrated into the global economy to very different degrees (UNDP 1999). This has resulted in rising inequality and tension, which are increasingly considered the flip side of the increased reliance on market forces and the changes in the international power structure. In the 1970s, scholars began to explore the gendered impacts of changes in the global economy. Gender has both a biological dimension (categorization as male or female) and socially constructed components. The latter reflect a society's views regarding appropriate roles for men and women and are reinforced by economic, political, social, cultural, and religious institutions. Global organizations such as MNCs and the IMF often use these social constructions to their advantage; however, globalization can undermine them or cause them to be more firmly defended. This article outlines the importance of the evolving study of the gendered impacts of economic globalization, the current issues regarding research, theory, and methodology, and likely future directions.

1.2 Internationalization of higher education

The information age has stimulated economic globalization resulting in a greater interdependence between countries. Globalization promotes the flow of people, capital, commodity, service, knowledge, technology and information between different nations. Globalization also improves the optimized disposition of productive elements and resources. At the same time, economic globalization promotes internationalization of higher education and the exchange of educational resources in the world. Economic globalization effectively compels the education sector in every country to be open to the world, so that other countries can utilize global educational resources.

Economic globalization needs people who are familiar with the international economic situation, who understand the legal and cultural framework of other nations, who have a good command of foreign languages, and who can use advanced technology. Such people who are the workforce of the globalised world are educated and trained in the institutions of higher learning. Therefore, in order to train people with strong ability, higher education must adapt to the trend of globalization. In order to adjust their own economic frame, developed countries transfer some industries to developing countries. Teaching content and methods should be adapted to the demands of international exchange and development as well, so that the graduates may be produced with international viewpoints and linguistic skills. So, higher education internationalization is a result of economic globalization - the inevitable outcome in the process of economic integration.

Economic globalization is the basis of higher education internationalization. Economic globalization is the outcome of the development of the world economy, and economic globalization accelerates economic development, expands the market horizon and increases productivity. Economic globalization improves the efficiency of enterprises and plays a great role in increasing the size of the economy of every country. Economic development improves living standard and level of education of people. It also lays the material basis for the development of education. Therefore, studying in one’s home country is not the sole choice and students can study in other countries, and so education becomes highly internationalized. Economic globalization needs institutions of higher learning to meet the need of international exchange of staff, technique and curriculum. In doing so, obstacles arising from differences in value and culture need to be handled efficiently.

In addition, economic globalization requires higher learning institutions such as, universities to train people with higher inner qualities. Economic globalization is the result of the development of economy and high technology. Economic globalization causes world-wide distribution of industries and renders the world as one. Thus it can be argued that producing adequate numbers of high quality talents is an urgent task for institutions of higher leaning if a country wants to adapt to globalization.

4.4 Summary

In the context of economic globalization and intensifying market competition since the 1990s, Siemens has to formulate a corresponding global strategy and business sectors. Aiming to achieve sustainable value creation, Siemens operates within the framework of One Siemens and mobilizes global resources and technical personnel within and outside the company to build global R&D, manufacturing, supply chain, and sales and service networks so as to configure operations across regions and industries and globally integrate value-creating activities. This helps the company to expand market opportunities, lower operational costs, increase innovation capacity, and raise the level of customer satisfaction, thus enhancing the company’s core competencies and helping it establish a sustainable competitive edge in a global sense, to achieve sustainable, profitable growth and continually increase company value.

Based on the framework of microcosmic GPN studies proposed in Chapter 3, Analytical Framework of Microcosmic GPN Studies, this chapter examined Siemens’s global networks on the whole and its global R&D, manufacturing, supply chain, and sales and service networks from the value perspective in terms of value objectives, global strategy, networks, location selection, and network governance and assesses the value added of all the networks. It also explains the GPN of medical devices and the trade structure of China’s medical device industry from the perspective of embeddedness, and describes how Siemens Healthineers gets embedded in China on the levels of strategy, region, and dimension. The case study of Siemens helps to better understand the micro-GPN framework and explain the drivers and benefits of GPNs as well as how MNCs operate based on GPNs on the microlevel, and figure out how MNCs get embedded in China and the pattern in the evolution of the process, thus contributing to development of both China’s economy and MNCs.

2.1.3 Network of Multinational Corporations

Since the 1990s, economic globalization has been gathering momentum, and GPNs have emerged and been expanding, effecting dramatic changes to the competition and cooperation among MNCs. The competition between individual firms has been gradually replaced by that between consortia of firms. As GPNs undergo further changes, modular value chains, relational value chains, captive relationships, and other new types of governance grow in popularity and MNCs no longer make FDI through internalization but form production networks through contract manufacturing, alliances, and other nonequity-based means. Traditional theories of MNCs focus on developed countries, parent firms, hierarchy, and economy but pay little attention to developing countries, subsidiaries, networks, and lack of economy. The strategic management theory addresses competition and competitive advantages much more than the alliances of firms in various forms. Therefore, both face serious challenges in explaining the formation and development of GPNs.

Against such a backdrop, the theory about the network of MNCs has drawn increasing attention and includes such concepts as internal network, external network, strategic linkage, and local embeddedness, as summarized by Ye (2008). This theory responds to the changes in organizations and can explain the various factors that cause the formation and evolution of GPNs. It also examines the various network relationships that can be induced or exist inside or outside firms and their structures. The theory offers good explanations about why GPNs exist, network participants and their relations, what network resources firms have access to, what competitive advantages they have, the spatial characteristics of networks, and their relations with regional economy. Its all-round and in-depth examination of how GPNs operate helps us understand the significance of GPNs to the organizational form and performance of MNCs and to local industries and economic development. Therefore, the theory about the network of MNCs is an important theoretical foundation of GPN research.

Economic Globalization

For some people, economic globalization is what globalization actually means. Certainly, it is an immensely powerful force which impacts on all other globalizations. It consists of a number of different elements. One is the acceptance of the use of free-market approaches as the best means of generating wealth, a view which has migrated to affect the structure and practice of many public sectors around the world. Thus, socialist prime ministers like Tony Blair talk of the choice between private and public provision of a service as a purely pragmatic decision: “what matters is what works” (quoted in Ainley, 2004: 507). Yet, so do Chinese communist premiers like Deng Xiaoping, who argues that the choice of communist or free-market economics in developing China's economic base is no more important than choosing between a black or a white cat to catch mice: it doesn't matter as long as it succeeds in achieving the ultimate objective. Free-market economics is then the overwhelmingly dominant global economic standard.

Yet, such adoption is not entirely a nation-state option, for, a second element of economic globalization is the influence of supra-national bodies like the World Trade Organization, the International Monetary Fund, and the World Bank, which facilitate the entry of nation-states into international agreements which prevent them from firewalling their economies against global financial movements. In so doing, nation-states become increasingly vulnerable to global financial market trends, a situation exacerbated by the speed of such transactions. Nation-states, however, are also weakened by a further force, – their increasing dependency upon the investments of multinational corporations, who search out the most profitable national locations for their operations, moving these as and when they see greater profitability elsewhere (see Korten, 2001).

The acceptance of the free-market paradigm globally, the global nature of financial transactions, the national vulnerability to international financial transactions, and the actions of multinational corporations, are large elements in what Bobbitt (2003) argues is the transmutation of the nation-state into the market state. According to him, nation-states, unable to provide the historic degree of protection and welfare to its citizens, are aligning themselves with neoliberal economic policies through the provision of an increasingly privatized range of different educational mechanisms. Their role then is reduced to providing opportunities for citizens to generate individual wealth. This, Bobbitt argues, has been most strongly seen in the regimes of Bush in the US and Blair in the UK, and likely underpins policy moves in England over the last few years toward greater consumer choice, through the creation of specialist schools with a degree of private investment and considerable private control. While such effects may be rather more parochial than Bobbitt might believe, and vulnerable to changes in political leadership, this does seem a good example of how difficult it is to appreciate national policies without understanding the global context within which such ideas are generated.

Finally, because markets reduces educational activity to that of an individual good, such globalization effects prevent the articulation of the kind of vision for education which Grace (1995) suggests it must have. For him, education can develop in citizens “a moral sense, a sense of social and fraternal responsibility for others”(p. 214), and by doing so, provides the basic conditions for making democracy possible. He argues that, because of this quality, education should be accorded the status of a public good. Given such a global economic context, a third essential leadership disposition, then, in addition to those of irony and autonomy, is a belief in education as an activity transcending the satisfaction of the purely personal, and of the re-statement of education as a good for society as a whole.

The Deepening of International Energy Interdependence

With the development of economic globalization and global energy integration, the interdependence of economy and energy among countries in the world is being intensified gradually, making it increasingly unlikely to achieve energy independence. At the same time, the energy interdependence of all countries and the increase of common energy interests make it feasible for the international community to popularize the concept of energy security and establish a global energy security system through global energy security dialogs and cooperation.

Compared with the two oil crises, the current international energy supply has improved greatly. It is less likely for exporting countries to implement oil embargo and initiatively cut off supply, and the impact of high oil prices on the world economy has also diminished significantly. However, regional imbalance of energy supply and demand has been further aggravated, energy environmental problems become increasingly exacerbated, and the geopolitical conflicts and frictions have increased. All these problems make energy security more complicated and tough, causing an urgency to strengthen the dialog and cooperation on global energy security.

The driving force of energy interdependence is the development of global energy (especially oil) market integration. Since the mid and late 1980s, the world oil market has gradually become diversified. Not only has the number of producing countries increased by a large margin, from over 20 in the 1950s and 1960s of the 20th century to more than 50 at present but also the number of oil and gas importing countries is increasing. In addition, the number of participating enterprises has also increased dramatically. At present, in the field of exploration and development, there are many independent small- and medium-sized oil enterprises besides international oil companies and oil-producing state-owned oil companies. If oil trading companies and oil refining companies are also taken into account, oil-market participants could be countless. With the diversification of the participating structure, the world oil market has gradually changed from monopoly to competitive. At the same time, the oil spot market, the quasi-spot market, and the futures market have developed rapidly. The trade pattern between oil supply and demand has gradually become market-oriented. With the worldwide development of supply–demand balance and value comparison on quantity and price of oil trade, the steps of the integration of global oil market has greatly quickened. Moreover, the mutual penetration and interdependence between producing and consuming countries have so greatly intensified, and the factors affecting the market and oil prices have so significantly diversified that neither party could unilaterally control the market and oil prices for a long time.

The gradual globalization of state-owned energy companies has further promoted the interdependence of producers and consumers. In recent years, the traditional state-owned oil companies have also followed an international trend in their operations, and quite a number of them are shifting towards multinational oil companies. In addition to Statoil ASA (Norway's national oil company), Petrobras (Brazil's oil company), Saudi Aramco (Saudi Arabia's national oil company), and Petronas (Malaysia's national oil company), state-owned oil companies in China, Russia, and Algeria are also developing towards internationalization. The internationalization of state-owned oil companies not only changes the relationship between multinational oil companies and state-owned oil companies but also deepens the interdependence of oil producers and consumers. John Knight, senior Vice President of business development and M & A at Statoil ASA, said there was no energy independence now, and we must start discussing the energy interdependence [21].

In history, the contradiction between consumers and resource countries was the principal contradiction in the field of international energy security. However, since the mid-late 1980s, as the resource countries have been gradually opening up to the outside world, the contradictions between the two sides have been greatly weakened, but interdependent relationships strengthened. In the meantime, as the commodity attribute of oil becomes more and more prominent, the intervention of political factors to international markets has also weakened and the possibility of the use of petroleum weapons in Arab countries has greatly reduced. Since the 1990s, many countries like Iraq and Iran have proposed using “oil weapons” to fight against their “enemy,” but in vain. The US Embargo on Libya, Iran, and other countries made oil companies in France, Italy, and Spain grasp the opportunity. In peacetime, the contention between consumers and suppliers, in fact, is a scramble for oil profits and oil markets. The aim is to get higher profits by selling more products, rather than restricting the oil consumption of other countries. When the competition is more and more fierce, investment will be made more global and the international market supply will become more adequate.

The development of economic globalization and energy market integration has made different countries become a community with a common future. For example, in Northeast Asia, when energy crises occurred, it was difficult for any country to be immune from it. Although Japan, with more than 160 days of oil reserves, can guarantee domestic energy supply, its economy would inevitably suffer from economic fluctuation or economic dislocation of other Northeast Asian countries troubled by the lack of energy supply. The United States and China, the two largest energy consumers in the world, have many common interests, and both of them desire a stable and reliable energy supply. These two countries are deepening their interdependence in many fields such as trade and investment. If China's energy shortage led to an economic recession, it would also cast a shadow over the growth of the United States and the global economy.

Economic development and resource constraints have led to the increase of dependence on foreign energy in many consuming countries, and currently there is no measure to provide economic and practical alternatives to replace imported oil in the short term or medium term. Although the energy-exporting countries are vigorously developing nonpetroleum economy, their national economy cannot get rid of their dependence on energy export for quite some time. At the same time, the links between energy and economy between different consumer countries as well as different exporting countries are increasingly tightened. All energy consuming and exporting countries are inevitably mutually constrained and interdependent in the energy market.

2.1 Introduction

Increasing numbers of wealthy people, growing economic globalization, transformation of data telecommunications technologies, and worldwide integration of financial markets (stock exchanges, currency markets, and so on) are propelling change in the private wealth management industry and the market for its services (Maude, 2006). In the past, private bankers focused on taking deposits and providing investment advice about stocks, bonds, and real estate, as well as advising on trusts, estate planning, and the like. While these services fit those with modest wealth, perhaps under several million dollars (US) of investable wealth, such services are no longer adequate for people with wealth approaching US$5 million, as well as for those with substantially greater investable wealth. Even the family office, which formerly handled private wealth management for an individual family, is transforming, especially for extremely wealthy families. Multi-family offices are one solution to these trends, but even that approach may not suffice and a conglomerate of family offices may develop (Lowenhaupt, 2008).

The management of private wealth must deal with a global approach across many asset classes (stocks, bonds, currencies, real estate, art) and geographies (Maude, 2006). As the scale of private wealth of individuals has grown and with increasing numbers of “high net worth individuals” (HNWIs), specialization of financial service providers in sectors such as law and accounting has increased. Consequently, an entire cluster of services has emerged which includes the private wealth management units of large commercial and investment banks, private banks, and fund management firms, along with law and accounting firms. These interrelationships among service providers contribute to agglomeration of private wealth management in a few major financial centers (Beaverstock, 2012; Beaverstock et al., 2013; Lowenhaupt, 2008; World Wealth Report, 2013). Asia is the most rapidly growing market for wealth management, and if trends persist it will soon become the largest market based on numbers of wealthy and total amount of investable wealth (PWC, 2011).

The private wealth management industry employs various definitions and categories of HNWIs; the following is one widely accepted approach. The industry focuses on HNWIs who possess investable assets of US$1 million or more, excluding primary residence, collectibles, consumables, and consumer durables. This group sometimes is subdivided into those with US$1–US$5 million (millionaires next door), those with US$5–US$30 million (mid-tier millionaires), and those with US$30 million or more (ultra-HNWIs). The “millionaires next door” comprise 90% of HNWIs and 43% of HNWI wealth; the “mid-tier millionaires” comprise 7% of HNWIs and 22% of wealth; and the “ultra-HNWIs” comprise just 1% of individuals, but 35% of wealth (World Wealth Report, 2013). A brief summary of current dimensions of the wealth management industry sets the stage for examining Asia.

Recent Developments

There have been always winners and losers from economic globalization. Who the winners and who the losers are from the inexorable forces of globalization are determined by whether people live in the global North or in urban and developed parts of a country, whether they are skilled and educated, whether people have acquired the capacity to adjust to change and new situations easily, whether they possess assets, their gender and ethnic status, and such factors over which people have little control (Streeten, 2001).

Globalization-induced improvements in a nation's standard of living also can promote women's status and raise household income, education, nutrition, and life expectancy, while lowering birthrates. The key issues clearly are: discerning the factors which create the winners and losers; identifying the vulnerable groups affected by these factors; determining the conditions and actions that would reduce the vulnerability of people; and promoting and supporting the creation of these conditions and enabling people to engage in these actions. Enhancement of people's capabilities to discern and assess the options and make the choices can happen through effective access to education, knowledge, and information.

The quality of human resources determines success for a nation in the era of intensified globalization. The intellectual capital of a nation has become more important than natural resources and financial capital to a country's ability to compete in the global economy.

The economic crisis of 2008–9, manifested in the meltdown of the financial market, causing huge contraction of capital, decline in consumption, and increase in unemployment has posed new challenges to the legitimacy of the premises underlying economic globalization. This situation creates new opportunities for the civil society and NGOs to reinforce the international coalitions and compromises that are necessary to mitigate the negative aspects of globalization and enhance the positive effects – putting a higher premium on global human solidarity than on unimpeded global competition. Education and learning, in multiple ways and in the broadest sense, have to be regarded as a critical element in this effort.

See also:

Agriculture, Economics of; Economic Development and Women; Economic Globalization and Gender; Gender and Environment; Gender and Feminist Studies; Gender and Feminist Studies in Economics; Gender and Feminist Studies in History; Gender and Feminist Studies in Political Science; Gender and Feminist Studies in Psychology; Gender and Feminist Studies in Sociology; Gender and Place; Gender and Technology; Gender, Economics of; Gender History; Household Production; Land Rights and Gender; Poverty and Gender in Developing Nations; Rural Industrialization in Developing Nations and Gender; Rural Sociology