To what extent have the processes of globalization created a fully inclusive global economy?
“To what extent have the processes of globalization created a fully inclusive global economy?
The triad economies, United States, Japan and the countries in Western Europe were the economies that all other economies strived to be like. In the present day, economies such as China, India and Brazil have to come to match then in terms of GDP. China is the biggest exporter of manufactured goods. However if this due to the lower trade barriers, the elimination of quotas and lowering barriers to entry and making production as well as manufacturing knowledge perfectly accessible to all. Therefore helping these emerging economies to have better living standards, lowering mortality rates and increasing literacy rate, or has globalisation led to big Multinational Enterprises to grow so freely in the name of equality, they are now bigger than most countries and in actual fact are actually exploiting these countries.
The major factors of globalisation are trade and foreign direct investment. Global trade meant that economies started trading more with other countries and there for expanding their market. Multinational Enterprises where the main instigators of Foreign Direct Investment. By trading with other countries they saw they had a demand for their goods and services and rather than operate from their current positions often in the triad countries to open up offices in the emerging markets, where they were overseen by their head offices. The triad economies have a total contribution of 84% of the world in FDI (UNCTAD 1991).With, World Bank releasing figures. United States having a GDP of $5,930,700,000,000 in the same year (World Bank). United States is undoubtedly the biggest economy and still is the biggest economy. The triad economies had already strong foundations. After the Second World War, they were able to have great advantages due to technological advances during the industrial revolution. Able to be market leaders in particular sectors such as IT, Finance and Manufacturing.
One of the first historic uses of triad power came during the 1970’s with the invention of the Airbus. (A.Rugman 2003) The main objective was to build commercial aircrafts using the strengths of each of the countries that were involved in the project. This included France, German, Britain and Spain. As the project was government funded it was ensured never to fail and with each country involved in a certain part, it was guaranteed work for each of the countries and made them a key player in the aviation industry. The market leader in the aviation industry also included American Firms McDonnell and Boeing. They soon reacted to the American government responding to the growing competition they were receiving from the European counterparts. This led to the American-Europe agreement putting a limit on how much governments could fund their projects. This meant the companies had to find alternatives into how they could get the edge and become market leaders. The Boeing Company decided to outsource to the Japanese firm Mitsubishi. By outsourcing to the Japanese firm there were able to get cheaper labour and gain a better relationship with the Japanese manufacturer. This would then mean their product is automatically exposed to the Japanese market a part of the growing triad economy that had more and more demand for transatlantic transportation. Aviation was now more good and service that wasn’t just open to the high class and as a result by the two main market leaders being owned by the triad economy country showed how getting an early superiority into emerging markets would make over throwing them in the latter stage an impossible and difficult task for other economies.
