Drivers Of Globalization

The last decade or two have seen the world trade grow at exponential proportions. The major drivers of such a fervent growth are the political will of the governments across the continents and the technology which bridges all geographical boundaries.
The concept of globalisation is not new to the world, there have always been traders buying and selling their wares in foreign lands, the famed silk route in central Asia is an example of such trade practices being followed thousands of years ago. Globalisation from an economic perspective can de defined as the interdependence of world economies.
The expansion of world trade largely depends upon the economic and trade policies of the countries. A marginal decrease in import duties would give a sudden rise of inflow of capital from across the borders. The taxation laws of a country too can be an important factor which dictates the free flow of capital finance and globalisation of trade. (Dunning)
Globalisation is largely fuelled by the incredible desire of growth in a multinational organisation. The growth is in the form of larger sales, profits and the shareholder value. There is an increasing synergy between various large organisations to jointly own, produce and sell their products on a global platform. The Airbus consortium exhibits true global conglomeration, the airbus body is manufactured in Germany its doors in Spain, the wings are made in Britain and it is finally assembled in France (Hart). By going global an organisation not only has the advantage of economy of scales, they are also able to implement superior marketing practices which are continuously adapted to suit the local markets, this results in cheaper, better and more innovative products and services. The consequence is that the consumer gets international quality and a larger variety and hence the consumer prefers these goods over others.
The current wave of globalisation is mainly policy driven and technology driven. In the previous two decades many governments have adopted free trade policies. Taking advantage of such policies, organisations have built global collaborations and established production and marketing facilities with their foreign partners. Therefore international trade and business is largely dependant on deregulation of capital market which promote foreign direct investment. The tax regulations also often play a decisive role; as multinationals legitimately transfer profits to the country levying least tax liabilities thereby further increasing their bottom lines.
The other main driver of globalisation is technology in all its forms which have blurred all geographical boundaries, giving boost to international trade. The advancements in information technology in particular have created a revolution in banking and communication sectors. The uses of Internet and cellular telephony have enabled access to information, data and personnel across the globe and time barriers. The falling costs of transportation and communication as a bye product of globalisation fuel its very growth. The declining costs and increasing speeds in shipping and airline industry have boosted the volumes of goods and material which are now easily transported across the globe. Fresh vegetables from Zimbabwe are transported by air every night and sold in London. The efficacy of such an export trade is possible only because it is feasible today to transport these vegetables cost effectively in the shortest possible time. The drivers of such trade are reducing transportation costs, open trade regulations and declining communication costs.
Globalisation and international marketing have symbiotically helped each other to grow. They are interdependent and have to ensure the end customer satisfaction for which they continuously improvise and innovate. The true drivers of globalization are the multinationals themselves as they drive the global trade and exploit technology, government policies, speed of transportation and communication to achieve their utmost desire to grow and have a global presence.
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