Download Global Economic Issues

Overall Course Objectives
1. Examine 2 perspectives on globalization to explore
how “flat” todays world really is
2. Explore the impact of globalization in todays world for
countries, businesses & individuals
3. Define the key trends & forces which underpin
globalization
4. Examine how globalization impacts businesses
competitiveness & strategic focus
5. Understand the impact of globalization on your
competitiveness as a business graduate & develop
skills to assess your position in the global talent pool
Overview of Course Structure
Week
1
2&3
4
Topic of Instruction
Introduction - Global Economic Issues
How interconnected is our world?
Driving forces & trends underpinning globalization
5
6
7
8
9
10
11
12
Globalization & Governments
Global Homogenization
Globalization & Businesses Part 1 / Fall Break
Globalization & Businesses Part 2
Globalization & Individuals
Global Labor Market
Global Talent Pool
Leveraging the global forces to improve your strategic competitive
advantage
Global Leadership
Course Summary - Final Examination
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14
Week 1 - Objectives
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Course Assessment
What is Globalization?
Todays Global World
Perspectives on Globalization
Drivers of Globalization
The Rise of BRIC
Reasons for Globalization
Key Issues
What's next
What is Globalization?
• It refers to the rapid increase in the share of
economic activity taking place across national
boundaries
• International Monetary Fund defines
globalization as the growing economic
interdependence of countries worldwide through
increasing volume and variety of cross-border
transactions in goods and services, free
international capital flows, and more rapid and
widespread
Today’s Global World
• Global income is more than $31 trillion a year,
but 1.2 billion people of the world’s
population earn less than $1 a day
• 80% of the global population earns only 20%
of the global income, and within countries
there is a large gap between rich & poor
Today’s Global World
• The 3 billion people living in the 24 developing
countries that increased their integration into
the world economy enjoyed an average 5%
growth rate in income per capita, longer life
expectancy & better schooling
• The digital & information revolution has
changed the way the world learns,
communicates & does business
Today’s Global World
• Two billion people, living in countries in sub
Saharan Africa, the Middle East & the former
Soviet Union, have been unable to increase
their integration into the world economy, &
their economies have contracted, poverty has
risen & education levels have risen less rapidly
than in more globalized countries
Perspectives on Globalization
• “The World Is Flat” (Thomas Friedman)
• Globalization is the “ability to
click, connect & collaborate”
• Pankaj Ghemawat argues that the
world today is not as “globalized”
as many strategists believe, and
that cross-border differences
still matter in the world economy
• Both schools of thought will be explored throughout this
course
The Drivers of Globalization
• Multinational businesses which carry out business
across national boundaries
• The World Trade Organization (WTO), through which
international trade agreements are negotiated &
enforced
• The World Bank & International Monetary Fund (IMF)
assist governments in achieving development aims
through provision of loans & technical assistance
• National governments, who together with these
international institutions, are instrumental in
determining the outcomes of globalization
The Rise of BRICS
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New players in the world economy – BRIC 2010
Brazil
Russia
India
China
South Africa
Mexico was not initially included in this group in
2010 but has become one of the new players in
the world economy
The Rise of BRICS - stats
• In 2010, the BRICS countries accounted for over a
quarter of the world's land area and more than
40% of the world population, hold a combined
GDP of 20 trillion dollars
• India has 10 of the 30 fastest-growing urban
areas in the world and, based on current trends,
estimated a massive 700 million people will move
to cities by 2050. This will have significant
implications for demand for urban infrastructure,
real estate, and services
Top 5 largest economies
by 2050
The ten largest economies in the world in
2050, measured in GDP (billions of 2006 USD),
source - Goldman Sachs Report (2007)
Reasons for Globalization
Firms operate globally / internationally for a number of
different reasons;
• They may be seeking to secure better sources of raw
materials & energy
• They may want to obtain low cost factors of production
such as labor
• They may be attracted to certain countries because of
subsidies those countries provide
• They may be seeking new markets for their products
• Domestic markets may no longer be able to absorb
production at minimum efficient scales
Key Issues of Globalization
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Damage to Environment
Exploitation of labor
Monopoly of power
Damage to cultures