INTERNATIONAL BUSINESS MANAGEMENT

GLOBALIZATION

Individual
Lê Nguyễn Minh Trang
Assignment
#1
1852801
2021 - 2022
HOW HAVE CHANGES IN TECHNOLOGY
CONTRIBUTED TO THE GLOBALIZATION OF
MARKETS AND PRODUCTION? WOULD THE
GLOBALIZATION OF PRODUCTION AND
MARKETS HAVE BEEN POSSIBLE WITHOUT
THESE TECHNOLOGICAL CHANGES?

Technology advancements have resulted in the reduction of

trade barriers, the realization of market and production

globalization, and the creation of a platform on which the

world's resources may be maximized and put to the greatest

possible use. Of which an integrated world is perhaps the most

important step forward in globalization: integration of

information and financial space, integration of production

systems and markets. Advances in technology, such as

transportation, communication, and the Internet, have ushered

in a new era of globalization of markets and production.

Communication technology has reduced the cost of communication while also increasing the

possibilities for negotiations.

Increased transportation technology has helped reduce shipping costs, particularly via the notion

of containerization.

Businesses from all across the world may now interact and order products more easily thanks to

the internet. The Internet is the information backbone of the global economy while information

and data are the most important resources in management decision making.

Companies began to migrate throughout the world as a result of the establishment of

subsidiaries overseas, as well as mergers and acquisitions with lower costs and more efficiency.

Technology of one country may be produced in another. Resources from different geographical

locations can be used whenever and regardless of geographical distance.

Without these technical advancements, globalization of production and markets would have been

conceivable, but at a considerably slower rate, and the world would not have been the same as it is

now.
IF CURRENT TRENDS CONTINUE, CHINA MAY
BE THE WORLD’S LARGEST ECONOMY BY
2030. DISCUSS THE POSSIBLE IMPLICATIONS
OF SUCH A DEVELOPMENT FOR:

1. The world trading system

While developed countries such as the US, Germany, France,

Italy, the United Kingdom, and Canada,... have witnessed a

decline in share of world output and exports, China has had

faster economic growth at 17.1 percent of world output and is

the global leader in this category (table 1.2). It can be clearly

seen that China has affected the world trading system

dramatically. China is still a developing country, so it can be

predicted that it will continue to grow strongly in the future and

with that larger economy it may surpass the US.

20

15

10 THE CHART IS DRAWN

FROM TABLE 1.2

Demographics of World

Output and World Exports,

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IF CURRENT TRENDS CONTINUE, CHINA MAY
BE THE WORLD’S LARGEST ECONOMY BY
2030. DISCUSS THE POSSIBLE IMPLICATIONS
OF SUCH A DEVELOPMENT FOR:

2. The world monetary system

As a result of the shift in the trading system, the China currency

would surpass the US dollar because the trade of other

countries around the world gradually was affected by China.

3. The business strategy of today’s European and U.S.-

based global corporations
Global firms situated in Europe and the United States would

have to change their strategy today by outsourcing part of their

activities to other emerging countries.

4. The business strategy of today’s European and U.S.-based global commodity prices
If China is a developed country, investment from other countries will be saturated, but it is still

a developing country, so it attracts a lot of foreign investment and other investment

organizations. Therefore, with increasing capital it is possible to improve production

processes, upgrade technology and produce more products. According to the price law of

supply and demand, when production increases and exceeds demand, prices will fall, but still

not enough to meet demand, prices will increase. Therefore, we can see that Chinese

production greatly affects the world's supply-demand balance, especially global commodity

prices.
RESEARCH TASK

GLOBALEDGE.MSU.EDU
https://www.kearney.com/foreign-

direct-investment-confidence-index
RESEARCH TASK

1. About the Kearney Foreign Direct Investment (FDI)

Confidence Index
The Kearney FDI Confidence Index rates the economies most

likely to receive investment over the next three years, based on

an annual poll of worldwide business executives. In 1998, the first

report was published.

The rankings are based on questions concerning the possibility

of respondents' firms making a direct investment in a country

over the next three years, and they give a unique forward-

looking study of the markets investors want to target for FDI in

the future years.

2. What Is Foreign Direct Investment (FDI)?

Foreign direct investment as an equity investment by a company

in one country in a company in a different country. (KEARNEY)

3. Does the FDI Confidence Index Actually Predict Future FDI

flows?
At the macro level, the FDI Confidence Index® is a reasonably

good predictor of where FDI inflows will head over the next

three years, closely watched by the countries ranked in the

following countries last years. However, investors' intentions are

not constant, so they may change if affected by economic or

political changes in the host market or by other factors.

GLOBALEDGE.MSU.EDU
https://www.kearney.com/foreign-

direct-investment-confidence-index