2. Defining Globalization
Economic globalization is a “set of processes
leading to the integration of economic activity in
factor, intermediate, and final goods and services
markets across geographical boundaries and the
increased salience of cross-border value chains in
international economic flows.”
Source: Introduction to Aseem Prakash and Jeffrey Hart,
eds., Globalization and Governance (Routledge:1999)
3. Value Chain
Concept invented by Michael Porter
A value chain is more comprehensive than a supply
chain because it extends backward to R&D and
innovation and forward to commercialization
Michael Porter
Harvard Business
School
4. The Role of ICTs in Globalization
Reduced time, cost, and effort to coordinate activities
across great distances
Similar to the impact of the introduction of new
transportation and communications infrastructures in the
past (telegraph, railroads, ocean shipping)
BUT also continuing relevance of international regimes
(e.g. WTO, World Bank, IMF, global monetary system)
11. Other Ways of Thinking about
Globalization
Deterritorialization, e.g. of
diasporic communities
MNCs
Cultural Convergence
leading toward a universal “sameness”
Globalization as a Myth or Fad
See, for example, Arjun Appadurai, Modernity at Large.
12. Appadurai’s Cultural Landscapes
Ethnoscapes
Mediascapes
Technoscapes
Finanscapes
Ideoscapes
“The suffix scape also allows us to point to the fluid, irregular
shapes of these landscapes, shapes which characterize
international capital as deeply as they do international clothing
styles.”
13. Diasporic Communities
any people or ethnic population forced or induced to
leave their traditional homelands, the dispersal of
such people, and the ensuing developments in their
culture
examples: Jews, Cubans, Chinese, Pakistanis, Indians,
etc.
14. Examples of Globalized Culture
Corporate logos
Who Wants to be a Millionaire
MTV
World Music, e.g. Reggae or Ska
Anime, Manga, Pokemon (J-pop)
Disneyland, Disneyworld theme parks
Action movies with little dialogue
15. Will Territorial Based Systems
Become Obsolete?
No (short answer)
Territorial-based systems may become less important
relative to others but it is more likely that more
complex relationships among governance systems at
different levels of aggregation -- local, national,
regional, etc. -- and nonterritorial governance systems
will have to be established.
16. Coping Strategies: National
Governments
Many coping strategies are still possible.
Downsizing the state is not always desirable
(e.g. the case of the formerly centrally
planned economies).
National governments are likely to play a
role in reducing inequalities accentuated by
globalization.
17. Theoretical approaches:
Neoclassical (industrial policy is bad and
counterproductive)
Regulatory State (regulation necessary for markets to
work properly, but industrial policy is still bad)
Developmental State (industrial policy is useful for
catching up)
Competition State (industrial policy has to take
globalization into account)
18. The Developmental State vs. the Regulatory
State
Developmental Regulatory
Type of Elite, Insulated Transparent,
Bureaucracy Accountable
Support for New Extensive Limited
Industries
Use of State- Extensive Limited
Controlled Banks
Stance w/regard Tutellary Regulatory
to Private Firms
19. Industrial Policies
Includes a wide variety of policy instruments that are
intended to advance the international
competitiveness of “national champion” firms, such
as:
Investment subsidies
Public R&D expenditures
Science parks and free trade zones
Export incentives
20. The Impact of Globalization on
National Economic Strategies
Greater volatility in global financial markets
requires changes in financial market regulations
in all countries
To remain internationally competitive, firms have
adopted global production strategies
Even regulatory states have to compete for inflows
of foreign direct investment
Developmental states cannot succeed with pure
national champion strategies
21. Examples of Coping Strategies
Promotion of inward FDI
Raising the skills of the workers via education and
training programs
Scholarships and fellowships for college
Increased spending on research and development
(R&D)
Regional development efforts
22. Example of GM in China
2010 sales of 2.3 million vehicles in China
World-class production facilities (joint venture with
SAIC)
Modified Buick as a chauffeur-driven luxury car
Not competing with low-end national champions like
Geely
23. Example of LG LCD Production
Joint venture with Philips
Only major competitors globally are
Samsung and Sharp
Production facilities use best materials
and tools from global suppliers (e.g.
Corning and Canon)
Have to worry about China
