Driving Force of Globalisation Essay

An NIC stands for a Newly Industrialised Country. It is a term used to describe a untaught that has moved by from an agriculture-based parsimoniousness and into a more change, urban sparing. These countries do a utmost growth assess. Current NICs include China, India, Brazil, Malaysia, Mexico, South Africa, Philippines, Thailand and Turkey. The average growth rate in the midst of these countries is approximately 7.64% comp ard to the piece average of 3.7% (2011). The average Gross national Product (gross domestic product) per capita for these NICs is US$10,769 compared to the world average GDP per capita of US$12,000.GDP is a useful indicator of development and a great rate for comparing differences among countries, therefore onlyowing a clear differentiation amongst countries that are Highly Industrialised Countries (HICs), Newly Industrialised Countries (NICs) or low-spirited Industrialised Countries (LICs). The Human Development Index (HDI) is another strong ind icator of development, it includes a combination of statistics life expectancy, education and income. The average HDI of these NICs is approximately 0.6874. The world average HDI is 0.862.India is now an NIC, as the IT services boom has transformed the dry lands scrimping, which is now growing at more than 9% per year, the selfsame(prenominal) rate as China. Indias HIC is 0.547(2011 estimate). Since China opened up its markets to the westmost in the 1980s, the city of yarn-dye has transformed into a booming capital consisting of about 21 million people. Shanghai accounts for 30% of Chinas foreign exports and attracts 25% of all foreign investment into the estate. The GDP of Shanghai alone is US450 billion Chinas HDI is 0.867 (2011 estimate). internationalization is the stage of processes and impacts that arrive at a orbiculate scale, usually economic systems, but it end include physical systems (global warming) and socio-cultural systems (fashion, music, film industry). o rbicularisation can be calculated using the globalization Index, which tracks and assess changes in the 4 key components of global integration. Another measure of globalization is the KOF Index of Globalisation. This calculates the overall index of globalisation and sub-indices referring to actual economic flows, economic restrictions, entropy on information flows, data on personal contact and data on cultural proximity.NICs give been and continue to be the driving force of globalisation. Manufacturing tends to occur mainly in industrialised countries. Globally, manufacturing output continues to append and most manufacturing still occurs in industrialised countries. Although relative contribution of manufacturing to most industrialised countries economies has declined, manufacturing remains fundamental to all economies. legion(predicate) of the new industrialised countries are dramatically increasing their manufacturing output, by establishing their unique multi-nationals and i mplement manufacturing plants in veritable countries. An example of a country doing this is South Korea. NICs produce a variety of advantages over fully developed countries, as they are able to benefit from bodacious labour costs, turn away business taxes, cheaper land and fewer environmental visualises.Multi-nationals are hugely answerable for a whopping majority of the rise in globalisation, for example the world of Trans-national companies (TNCs). These multi-nationals founder huge benefits, i.e. they have generated millions of new jobs in NICs, however they have too lead to social, political and economic problems at heart a country, as well as between countries. For example, Uganda, a very poor country with a GDP per capita of just $1,300 (2011), has been forced to lower its prices of exporting coffee, which is what its economy relies on.Coffee prices have fallen by 70% since 1997, costing exporters in developing countries $8 billion in lost foreign-exchange earnings . This divides the break between the rich and the poor, as the richer countries will benefit from trading, while the poorer countries, such(prenominal) as Uganda, will loose out in gaining money on exports, therefore making them poorer. TNCs dominate industrial production including manufacturing and services, therefore further dividing the gap between the rich and the poor, and organism the main leader of globalisation as a consequence.TNCs work to meet the demand for its good from HICs. For example, Toyota, like umteen other TNCs undertakes much of its manufacturing in LICs in order to meet the gamy and constant demand from HICs. Manufacturing in LICs is preferred as it provides these large companies with cheap labour. Toyota was recorded as the fifth largest TNC in 2010. It has 51 overseas manufacturing companies in 26 countries and regions, it has Design and Research and Development centres in the USA, Japan, Belgium, the UK, France, Thailand and Australia, and its headquarter s are in Japan.Globalisation inevitably increases pressure to liberalise switch and to elapse tariffs and non-trade barriers. Liberalisation of trade within OPEC clearly resulted in China (an NIC) for example, gaining a comparative advantage over the US (MIC) in the manufacture of machinery products.Globalisation has also been a resulting factor for the dramatic increase in technology. Bangalore, in the Silicon Valley of India is experiencing a remarkable IT boom, that is transforming the prospects of Indias economy. The internet is the instantaneous growing tool of communications. It took just 4 years for the internet to concern 50 million years, in contrast to the 38 years it took for radio set and 13 years for television. However, the bulk of internet traffic is between and within North America, Western Europe and, to a limited extent, East Asia i.e. HICs and NICs. In Asia, Japan accounts for the major share of internet traffic, which is the rationality for why this country has become an NIC, where as most other countries in Asia are LICs.A number of charismatic new Indian companies are now thought-provoking the multinationals for global leadership in this area, including TCS (TATA Consultancy Services), Infosys and WIPRO (the current global leader in technology). The IT services boom has helped to transform the Indian economy, which is now growing at more than 9% a year, comparable to China. The new-found affluence of the young workers in the IT sector has led to a change in attitudes to wealth and inspiration in the country. More and more young people are increasingly being able to afford such luxuries, for example cars and home ownership.On the other hand, NICs are not necessarily the driving force to globalisation. The reason for this is that these countries have only been able to develop due to the richer western countries. These MICs have the money to buy up land in poorer countries, as vocalisation of land colonization in order to meet the d emand of these MICs. Many of the new industrializing countries (NICs) are dramatically increasing their manufacturing output, however this is only as a result of industrialised countries becoming established in the NICS.The nucleus periphery is a theory to explain the process by which most countries become wealthy and others become poor, subsequently increasing the divide between them. The patterns of trade that emerges from the 1500s onwards created a wealthy core of European countries. The nations who add together these rich European countries remained poor and on the edge, known as the periphery. The Global core regions include North America, Europe and Japan. This core owns and consumes 80% of global goods and services, earns the highest incomes, makes most decisions about the global economy, e.g. what goods are produced, and provides most global investment. Therefore, richer countries control trade, and so have control of LICs to meet their large demand, subsequently being t he driving force of globalisation.Trade has been the engine of globalisation, with world wide trade in manufactures goods increasing more than 100 times (from $9.5 billion to $12 trillion) in the last 50 years. This has outpaced the overall growth of the global economy. Since 1960, change magnitude trade has been made easier by international agreements to lower tariff and non-tariff barriers on export of manufactured goods, especially to rich countries. Those countries which have managed to increase their lineament in the world trading system (through implementing TNCs) by targeting exports to rich countries such as Japan, Korea and now China. All these countries have seen a dramatic increase in their standard of living.In conclusion, I strongly believe that NICs have been the driving force to globalisation. Moving to a more industrialised, urban economy will help any country to perform better in the global market, helping it to gain a higher growth rate and GDP. Having a higher HDI in a country will also help those countries to receive higher standards of living and an enhanced quality of life. Globalisation occurs as factor of change to economic, physical and socio-cultural systems, which all have large global influences. HICs have therefore, increasingly been the cause for globalisation, as they develop from an agriculture-based economy into an industrialised, urban economy.