A fundamental shift is occurring in the world economy. We are moving progressively away from a world in which national economies were relatively isolated from each other by barriers to cross-border trade and investment - by distance, time zones, language, national differences in government regulation, culture and business systems. And we are moving toward a world in which national economies are merging into an interdependent global economic system, commonly referred to as globalization.
The electronics industry is the largest and fastest growing manufacturing industry in the world. The rapid rate of globalization is made possible by the rapid development and expansion of the Internet economy, which in turn is fueled by the unprecedented growth of high-tech electronics manufacturing.
In just one human generation, the high-tech revolution has spread out from its birth place Silicon Valley to encompass vast sections of the globe. A typical computer now contains components manufactured and assembled all over the world - semiconductor chips made in New Mexico or Scotland or Malaysia, a disk drive made in Singapore or Thailand, a CRT monitor made in Japan, circuit boards made in China and assembled in Mexico or Costa Rica.
As the global economy becomes larger, more complex and more inter-dependent global trade issues have begun to dominate international relations. International bodies such as The World Trade Organisation, and treaties such as North American Free Trade Agreement have been enacted to set the rules for international commerce. These new initiatives are driven by international trade and business concerns, and global high-tech giants often play a dominant role. Environmental labor and human rights issues have taken a back seat.
What is Globalization?
Globalization refers to the shift towards a more integrated and inter-dependent world economy. Globalization has two main components: globalization of markets and globalization of production.
Globalization of markets:
Refers to the merging of historically distinct and separate national markets into one huge global market place. The taste and preferences of consumers in different nations are beginning to converge on some global norm, thereby helping to create a global market. The global acceptance of consumer products such as Citicorp credit cards, Coca Cola, Levi's Jeans, Sony Walkmans, Nintendo game players and Mc Donald's hamburgers are all frequently held up as examples of this trend. Firms such as Citicorp, Coca Cola, Mc Donald's are more than just benefactors of this trend - they are also instrumental in facilitating it. By offering a standardized product worldwide, they are helping to create a global market.
The most global markets currently are not markets for consumer products - where national differences in taste and preferences are still often important enough to act as a break on globalization - but markets for industrial goods and materials that serve a universal need the world over. These include the markets for industrial products such as microprocessors, DRAMS, commercial jet aircrafts etc. In many global markets, the same firms frequently confront each other as competitors in nation after nation. Coca-Cola's rivalry with Pepsi is a global one. Thus diversity is replaced by greater uniformity. As rivals follow rivals around the world, these multinational enterprises emerge as an important driver of the convergence of different national markets into a single and increasingly homogeneous global market place.
Due to such developments in an increasing number of industries, it is no longer meaningful to talk about "the german market", "the American market", "the Brazilian market" or "the Japanese market"; for many firms there is only the Global Market.
Globalization of Production:
The globalization of production refers to the tendency among the firms to source goods and services from locations around the globe to...