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2 -The Globalization of Business

The main drivers of Globalization are Politics and Technology. G7 States started the Globalization process decades ago because they believed this would have helped the welfare of their citizen.They also created global Capitalism which today has transformed the relationship between the factor of productions. After 2008, Economic globalization seems to have reached a plateau.


Politics plays a major role in economic integration because tariffs determine the volume of Import and Export. Lower tariffs, falling costs of production and communication, free flow of Capital and workers created, during the years, the fragmentation of the Global supply chain. Big Companies acquired a competitive advantage in terms of costs by outsourcing and offshoring their production stages.

The Promises of a "good Globalization" was not delivered and has now caused an uneven economic development between Countries and anti-globalization sentiment within the Advanced Countries. Brexit, Trump's policies and the Italian populist wave are simply the effects.


Globalization which has risen social and economical aspiration around the World it is now a source a political and social tensions in the Countries mainly affected (developed Nations). Migrants are now blamed for holding down wages, in particular for unskilled workers. This is a key element in the increased perceived inequality. Local communities suffer also because migrants do not tend to integrate.


The architects of Globalization still do not acknowledge all this but keep speaking of more economic integration needed. The fact is that this type of globalization appears to be more and more a Win -Lose game.


In fact, GDP per capita has increased a lot in emerging economies like China but stagnated in developed countries. Technology connectivity (internet), personal contact (migrations, cultural exchanges) and political contacts (G20) have made the World "flat" but have also created huge social political problems that are now appearing at the horizon. The China -USA commercial war has just begun.It is a war that will decide who is going to be the empire of this Century. China began attracting capital thanks the huge population and cheap cost of labor. Today and in the future it wants to position itself to the top of the global value chain and the huge investment in automation and digital economy

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