Globalization - Integration of National Economies

Globalization widely pertains to integration of national economies through removal of barriers resulting to faster flow of products or goods, services, capital and labor. This is through faster and seamless transactions in trade, capital flow, labor, trade, investment, migration and technology. Thomas Friedman, in his book, “the World is Flat,” sees outsourcing, supply chaining, globalized trade and political liberalization as tools that ‘flattens’ the world economy (Friedman, 2005).

There are forces driving globalization and the megatrends that results to various shifts in economy are shifting economic power, population change, technology, environmental shifts and pressures, and changing values. The shifting economic power means that the GDP of emerging economies are increasingly growing compared to developed countries. In fact, developing countries is expected to account for 1/3 of the global output by the year 2030. Technology drives globalization through becoming an instrument on how today’s consumers’ needs are met by manufacturers and retailers. The fast development of technology drives globalization in a faster scale since it does not only facilitate goods/ service/ capital exchange but also exchange of ideas. The difference of technology from one market to another also serves as an advantage or disadvantage for a national market on how they can adapt and stay competitive to globalization. The environmental shift, population change and values are also some forces that drives integration of economies to globalization. The changing demographics and needs according to sets of values of the population creates disruption in current market needs. (Bouhmprey & Brehmer, 2018).

Several backlashes are taking different forms in countries and regions. One of the premier backlash is risk associated in multilateral finance and trade regimes. The financial system, specifically the international monetary system is prone to crises as witnessed by several financial crises in the past. Stalemated trading system is also a concern (Bergsten, 2000). The expansion of market also leads to expansion of free markets and global transfer of wealth. The expansion of free markets leads to economies not ready or not competitive enough to suffer from big industries that expanded their own market share. There is also a consequence in cultural aspects of countries and regions. Because of fast transfer of cultural in the form of food, movie, lifestyle and value as a result of immigration, local national culture has become diluted and at the brink of being forgotten (Short, 2016).