Global Vs. UniversalFrench thinker Jean Baudrillard stated that the 21st century is a struggle between the global and the universal.
Globalization is the hope of the economy and advances the values of commerce.
Globalization primarily concerns production and markets.
Universality is the hope of humanity and advances the human experience.
Universality concerns ways to help unify people through human relations and assistance.
Globalization & production, markets, economies:
Globalization of production is the sourcing of goods and services from locations around the world to take advantage of national differences in the cost and quality of components. Think about Boeing or Airbus planes? The Boeing 777 contains over 100.000 major parts produced around the world by over 500 suppliers. Similar story with the Airbus ‘new super jumbo and the new Boeing 787.
Globization of markets is the merging of historically separate national markets into one global marketplace. i.e. McDonalds, and Mercedes.
The Global economy is evolving into one in which barriers to trade and investment are tumbling fast. Distances are shrinking due to advances in telecommunication and transportation technologies. Culture convergence is taking place and national economics are merging into an interdependent Global economic system. Example: A US commuter might drive to work in a car designed in Japan, assembled in Mexico, from components made in the US and Germany, fabricated from Korean steel and Malaysian rubber with a Chinese made radio, Nokia cell phone, and Brazilian leather.
Globalization & current events, time zones, travel:
-International Business requires following current events. Good or bad news effects the speculation of the market.
-International business requires following time zones. There are 25 time zones, 24 hours plus Newfoundland. The prime time zones for international business are the 4 zones in the US, the 4 western zones in Europe and 2 most eastern in Asia.
-International business requires frequent flights. There are about 18 million air flights a year and about 50,000 each day.
Globalization & people:
In 2009, there are 6.8 billion people on earth.
Only 1.6 billion are connected to the internet.
That means 80% of the world is disconnected from global communication and e-commerce.
Of the 6.8 billion people on earth, 3 billion live on less than $2.50 a day.
1 out of every 2 children is born into poverty.
Basic survival needs are nutrition, shelter, safety, education and emotional support. Key indicators of augmented survival, or wealth, are land ownership, tool/vehicle ownership, the ability to save money, the ability to support livelihood activities and long term resource sustainability.
The world’s poor:
The world’s billionaires are just 497 people worth $3.5 trillion in a 70 trillion world economy.
50% of the world’s 100 hundred wealthiest bodies are corporations.
20% of the world population controls and consumes 75% of the world's resources.
Global spending in 1998:
Global Priority | $U.S. Billions |
Cosmetics in the United States | 8 |
Ice cream in Europe | 11 |
Perfumes in Europe and the United States | 12 |
Pet foods in Europe and the United States | 17 |
Business entertainment in Japan | 35 |
Cigarettes in Europe | 50 |
Alcoholic drinks in Europe | 105 |
Narcotics drugs in the world | 400 |
Military spending in the world | 780 |
Compare that to costs to achieve universal access to basic services in all developing countries:
Global Priority | $U.S. Billions |
Basic education for all | 6 |
Water and sanitation for all | 9 |
Basic health and nutrition | 13 |
Global responsibility:
Contemporary social consciousness now resists the shallow and wasteful turnover of commercial production. We socially esteem the potential to re-use, re-cycle and re-consider enduring values. The successful global business today is responsible and integrated into commerce and humanity.
Do you think Globalization is good or bad? Why? Can you name ways international business benefits from globalization? What about the harm of globalization like outsourced labor, which deceases domestic jobs and may suppress other nations?
G-20 and BRICK
-Beginning in 1999, the G-20 includes as finance ministers of the world’s largest economies
-Includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, E.U.
-G-20 has no staff and simply meets to discuss financial stability
-G-20 represents top of the economy, the former colonies represent the bottom of the scale
-Collectively, the G-20 economies comprise 80% of world population and 85% of the Gross National Product
-GNP is total world activity of output and input (expenses and income) including foreign profit. GDP is gross domestic product is output and input plus income used by foreigners abroad and minus income by foreigners living in the country and GDI is gross domestic income
-BRICK is simply an economic term describing Brazil, Russia, India, China and S. Korea, the fastest growing new economies
G-20: USA
Political head: Barak Obama
Economic head: Secretary of the Treasury, Timothy Geithner
Economic profile from Wikipedia:
Largest economy in the world, GDP estimated at 13.8 trillion
Gross external debt is largest in the world at 13.6 trillion
Federal debt is 11.4 trillion
GDP per capita (person) is $48,000, number 10 in the world
Suffered a great depression with stock market decline in 1929, resolved during the 1930’s
Major recession between 1973-1975
Current recession identified as beginning in December 2007
Highest activity sectors include construction, manufacturing, wholesale and retail trade, finance and insurance, health and social care.
Highest trade Canada, Mexico, Japan, UK and China.
Other aspects you may want to consider:
Market Size; Market Growth Rate, Market Consumption (% of middle class), Commercial infrastructure, Economic Risk (political and economic freedom)
The US has had a consistent market growth rate until recently. They have had a stable middle class, stable infrastructure and economic risk making then attractive to investors.
Notable successful international business:
Apple, Coca-Cola, FedEx, Goldman Sachs, GE, Google, Kraft, McDonalds, Microsoft, Starbucks,UPS
Recent international business news:
Apple Cuts Prices Strategically
Thanks to Doug Ware and www.score.org and www.scoreorlando.org. Image of the earth at night, www.nasa.gov and Statistics www.wikipedia.org, www.internetworldstats.com and www.globalissues.org
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