Friedman: Globalization of the World Economy
Declining trade and investment barriers, advancements in technology, economic dominance amongst Western international businesses, and the world’s changing foreign direct investment picture, have all contributed to the current state of our world’s economy. Although the United States still accounts for more than twenty percent of the worlds GDP, their economic dominance has declined dramatically due to these contributing factors. This shift in our global economy has made the idea of a more integrated global economic system, globalization, more desirable. As the concept of globalization continues to gain acceptance amongst international businesses, the United States and other developed nations will continue to experience a sinking economy, while new markets and new competitors will continue to cultivate in the developing regions of the world, such as China and India. “Forecasts predict a rapid rise in the share of world output accounted for by developing nations such as China, India, Indonesia, Thailand, and South Korea, and a decline in the share by industrialized countries such as Great Britain, Japan, and the United States” (Hill, 2010).
Transforming, shifting, and changing: The U.S. and World Economy In the early 1960’s, the U.S. dominated the world economy and the world trade picture; more importantly, the U.S. dominated world’s foreign direct investments (FDI). “U.S. multinationals dominated the international business scene about half the world--the centrally planned economies of the communist world-- was off limits to Western international business” (Hill, 2010). The United States was the world's dominant industrial power “accounting for about 40.3% of world manufacturing output. By 2007, the U.S. accounted for only 20.7% of the World GDP” (Hill, 2010). Other developed nations such as Great Britain and Japan, experienced a similar decline resulting in a very different world economy than...
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