Essay title: ‘Marketing & Management: What is

driving modern day globalisation?’

Word Court: 2033

CONTENTS
1. Introduction..............................................................................................................1
2. Population Movement in Age of Economic globalisation..................................2
a) International mobility of labour.......................................................................2
b) Skilled emigration.............................................................................................3
3. International Division of Labour............................................................................5
4. Cross-border Trade.................................................................................................7
5. Conclusion................................................................................................................9
6. Appendix.................................................................................................................11
7. Reference...............................................................................................................12
1. Introduction
Nowadays, economic globalization has become an important feature and an
obvious trend in the development of the world economy today (Hamilton,
2014). There is a controversy over what is driving globalisation today and
what factors could influence global business. For the purpose of this essay,
‘globalisation’ will be defined as a process in which the flow of material and
spiritual break through regional and national boundaries and affects life in
every corner of the globe. ‘Economic globalisation’, as the core of
globalisation, refers to the free flow of goods, assets, services, technologies
and information across borders. Since the beginning of the 21st century, great
changes have taken place in the world economic pattern. With the
accelerated growth of trade and investment, especially the growing scale of
international transnational corporations, more and more countries are
participating in the process of globalisation (Peng and Nan, 2012). This essay
will argue that economic globalisation is shaped by population migration,
international division of labor and cross-border trade which are affected by
national policy, these factors should be both results and drivers, not simply
one or the other. In order to demonstrate this, firstly, the influence produced
by the interaction between population movement and global business will be
discussed. Secondly, the role of international division of labor in the
globalisation process will also be identified in order to show how crucial this
factor is to this phenomenon. Lastly, it will claim that the cross-border trade,
as the both driver and result, push and produce by economic globalisation is
also very important during the development of world economy.

2. Population Movement in Age of Economic Globalisation

It is difficult to judge whether population movement is a driver or a result or
trend of economic globalisation, but it could be a significant factor to shape
the current global business. However, the impact of economic globalisation on
different countries is different due to their different national conditions and
status.
a) International mobility of labour
International mobility of labour as the non-negligible role produced by global
business and meanwhile drive the global integration is shaping the economic
globalisation. There is a gap between low-income and high-income countries
is driving the workforce to shift location. This mobility of international labour is
the foundation of global economic development (Freeman, 2018). As Qian
and Wu (2000) point out, the ratio of national income per capita for the richest
fifth of the world's population to the poorest fifth was 30 to 1 in 1960 and 71 to
1 in 1997. The statistics indicate that there is growing polarization, which is
caused by labour movement, around the world and the data may demonstrate
that the mobility of labour could be an inescapable consequence of economic
globalisation. However, this seemingly negative population flow may
strengthen and shape the process of economic globalization. Another national
policy, related to labour movement and may drive the polarization, could also
argue that labour movement is a key factor to shape the global business.
Under the North American Free Trade Agreement (NAFTA), the migration
from Mexico to the United States could reflect the influence of immigration in
economic globalisation. The data reveal that at least half a million Mexicans
who come from poor areas move to the United States each year because of
good working conditions, rapid economic growth of the United States and
Mexico's chaotic economy due to NAFTA (Hao, 2017). This phenomenon
might cause Mexico to lose many talents but strengthen cultural and
economic exchanges as well as cooperation between the two governments
(Qian and Wu, 2000). Based on the result of above studies of labour
movement driven by economic globalisation, it is possible to speculate that
migration accelerates the process of economic globalisation by strengthening
links between the sending and receiving countries. Meanwhile, the national
policy drives the immigration which caused by economic globalisation could
also be the reason that economic globalisation is both the cause and the
result of immigration; it is not simply one or the other.
b) Skilled Emigration
Skilled emigration as a special category of population movement also
impacts on economic globalisation. High-skilled emigration could be defined
as workers who have university degree or working experience move around to
get maximum investment return (Iredale, 2001). Over the past 25 years,
globalisation has increased the supply and demand of highly skilled migrants
(Gonzalez, 2018). Especially in the United States, high-skilled immigrants
account for an increasing proportion of workforce in the fields of science and
engineering technology, about one-quarter of foreign-born staff with an
undergraduate degree and more than 45 percent of PhDs (Kerr and Turner,
2015). Indeed, it could be concluded that this increase is partly due to
globalisation because it drove the enhancement of high-skilled immigrants
coming to the United States based on the increased demand for highly skilled
immigrant work visas, it is due to those industries that are currently at the
heart of globalization (Gonzalez, 2018). Another statistic could also show that
globalisation as a driver to increase the demand of highly skilled immigrants
move to developed countries.
“In 1970, the percentage of scientists and engineers in the U.S. labor force
who were native-born was 92.4%, while the remaining 7.6 percent were
foreign-born. By 1990, native-born group had dropped to 88.6 percent,
while the foreign-born group grew to 11.4 percent. By 1997, the
percentage changed to 85.2 percent native-born and 14.8 percent
foreign-born”. (Espenshade, 2001).
Over time, foreign-born populations have grown in certain jobs that require
higher education and training. These findings could be interpreted as meaning
that high-skilled immigrants penetrate into various careers and industries
(Gonzalez, 2018) because of globalisation might boost demand for highly
skilled migrants. From above demonstration of increasing demand of skilled
emigration, it could be concluded that economic globalisation reshapes the
role of skilled migration and while meeting the needs of globalisation, the
emigration helps the large countries to grow the pace of globalisation. It is
clearly to argue that skilled emigration is both consequence and navigator of
economic globalisation.

3. International Division of Labour

International division of labour as an essential outcome of economic
globalisation has a major impact on globalisation. International division of
labour could be explained as the division of labor among countries or regions
in the world, which is the labor connection formed by the producers of all
countries through the world market, and it is the foundation of international
trade and economic contact of all countries (Zhang, 2007). It means the
international division of labour expands regional markets into world markets,
which could strengthen economic ties between countries and promoting the
development of economic globalization. Another definition of international
division of labour also could possibly indicate that international division of
labour is shaping economic globalisation. According to Hyman   (1997),
international division of labour refers to the multinational companies distribute
resources rationally and find satisfactory production place in the worldwide,
especially transfer some conventional production process or low content of
technology to less developed countries. From Hyman’s definition of
international division of labour, it could be concluded that international division
of labour has effectively strengthened commercial cooperation between
developed and developing countries, thus expanding the scope of capital flow
to the whole world, and this collaboration has made international division of
labour become a driver of economic globalisation.
International division of labour also promotes international economic
exchanges among all classes.
“With the emergence of international division of labour and the development
of international exchange, the bourgeoisie began to travel around the
world continuously in pursuit of profits and easing the contradiction
between production and consumption”. (World Trade Report, 2013)
A conclusion that could be made from the findings is during the process of
growing globalisation, international division of labour serves as a driving factor
to strengthen the connections among countries in the world and thus shapes
the globalisation.
However, international division of labour and economic globalisation affect
each other in the tide of world economic development. Mittelman (1995)
argues that the tremendous expansion of cross-border trade in the 19th
century empowered countries to specialize in the production of the most
efficient products, thereby strengthening and accelerating the international
division of labour. The finding might indicate support for the argument that
while promoting economic globalisation, international division of labour is also
affected by economic globalization and it is not only the cause of economic
globalisation but also result of development of global business.
4. Cross-Border Trade
Transnational corporations as the main forces on the world economic
development stage has a profound impact on economic globalisation.
However, these transnational corporations with strong economic strength
conduct a series of cross-border trade among various countries (Westaway,
2012), thus deepening the economic exchanges among countries and finally
promoting the economic globalisation. According to Conley (2000), the term
‘integration’ reflects the national economic openness, which could measure
the development of economic globalisation. It means, the higher the national
economic openness, the faster the process of globalization. Keohane and
Milner (1996) claim that increased cross-border trade promotes the integration
between domestic and international markets, where ‘integration’ could be
defined as prices of goods, services and capital converge in global markets.
From above findings, it is reasonable to argue that cross-border trades to
some extent, has influenced the process of globalisation.
UNCTAD (1994) shows that integration could be divided into shallow
integration (e.g., rate of world trade, world output and world export, etc.) which
includes the extending of market connection through ‘greater trade and factor
flows’; and deep integration (e.g., foreign direct investment, etc.)
encompasses international production which ‘goes beyond arm's length
market exchanges by internalizing cross-border exchanges related to
productive assets located in different countries under the common
governance of TNCs’. With regard to the data of shallow integration, there has
been massive advance since World War II (UNCTAD, 1994) and these
statistics possibly show the development of the national economic openness.
During the period from 1950 to 1973, world trade grew at a rate of 7.2% per
year (UNCTAD, 1994). From 1973 to 1990, world trade grew by 3.9%
(UNCTAD, 1994). Between 1990 to 1998, world merchandise exports grew at
an average annual rate of 6.5% (UNCTAD, 1994). From 1990 to 1998, global
services grew by 7% (UNCTAD, 1994). These statistics could demonstrate
that the world trade growth after WWII. From this increasing of export trade
between multinational corporations we might draw the conclusion that the
process of economic globalisation developed with the increasing of shallow
integration, which reflects national economic openness and grows by the
increasing cross-border trade.
Another data (see Table 1) from UNCTAD (1994) show clearly that foreign
direct investment (FDI) - deep integration - surged in the period from 1960 to
1997. This surge of world FDI stock and world FDI inflows could indicate the
increasing trend of economic globalisation judging by the positive correlation
between the growth of cross-border trade and national economic openness.
As a result, cross-border trade could become currently result and driver to
shape the economic globalisation. From this argumentation, it is not simplistic
to see factors as just causes or results of economic globalisation.

5. Conclusion
To sum up, this essay has explored that economic globalisation is formed by
factors such as population migration, international division of labor and cross-
border trade which are influenced by national policies. At the same time, these
factors emerged due to the development of economic globalisation and affect
the economic globalisation in the future business development of the world.
The role of these factors is not simply one or the other, but both of result and
cause. From the analysis presented here, it may generally be shown that
international labour movement meet the needs of economic globalisation and
promotes the development trend of it. In terms of International division of
labour, it might deepen by economic globalisation which promotes the world
market’s unceasing expansion, and it becomes the core of economic
globalisation operation. In addition, globalisation provides a large number of
opportunities for multinational corporations to conduct cross-border trade and
it drives the global business in the following globalisation development. These
factors undertake both the role of driver and consequence of globalisation.
What factors would shape the economic globalisation in the future business
development will continue to be a debated issue for researchers to argue.
Appendix
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