The Main Drivers of Globalization: The Economic Scope

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Table of Contents

Introduction
Main body
Conclusion
Reference List

Introduction

The processes of globalization seem inevitable and ongoing, which indicates the relevance of discussions on any related topic. Below, the primary drivers of globalization, as well as their impact, will be explored.

Main body

There is no unified approach to the exhaustive list of globalization’s drivers. The scholarly dimension provides various and diverse opinions on the topic. However, it might be claimed that Petersen (2017) formulates the drivers that reflect the ideas and concepts created by other respectful academicians. Then, Ebert and Griffin (2018) assume that in the global context, globalization tends to affect a business to a large extent. At this point, it should be noted that this discussion investigates globalization within the economic scope and does not explore its peculiarities in the framework of culture, politics, or law.

Globalization may be considered as a phenomenon that strengthens and intensifies the depth and density of transnational relations within various spheres of life – the economic one, in particular (What is globalization? 2020). Petersen (2017) provides the following drivers of this phenomenon – demography, political decisions, and technology. The justification of the latter is that because of technical progress, expenses for transportation and communication have significantly decreased nowadays. If there were no reductions, the current level of international trade, outsourcing, and global value chains would not take place.

Then, the size of the population in countries is essential for the determination of endowment differences between economies. If a certain country has a vast amount of labor force but a small reserve of capital in the long term, it is poor and undeveloped. Hence, demography might be perceived as a crucial driver because the population defines the real potential of economic growth and the extent of involvement in the globalization processes. It should be stated that economic processes do not operate out of the intersection with politics and institutions. The reduction and elimination of trade barriers are political decisions. What is more, whether transnational activities occur or not depends on governmental policies. The authorities of a country make a decision on gaining benefits of globalization or on alienation from it.

Despite numerous manifestations, globalization is not universal, as it does not cover all countries, regions, and industries, although it has endless potential for development in this direction. It is not straightforward and homogeneous, especially given the positives and negatives of these manifestations, when the abovementioned drivers of globalization are distributed unequally, asynchronously, and disproportionately, primarily at the cross-border level.

These drivers are not realized automatically and manifest themselves differently in countries (Kolb, 2019). Moreover, there is no proven evidence that globalization has contributed to sustainable economic growth on our planet. Global indicators still depend mainly on the domestic conditions and policies of the economically most robust countries. The problem of sustainable and dynamic development of the world economy needs to be solved (Hirst and Thompson, 2019), and the potential of globalization is still insufficiently used for this. The benefits of globalization are unevenly distributed and, from the perspective of many countries, unfair.

Conclusion

In conclusion, it seems reasonable to claim that there are three primary drivers of the process of globalization that were discussed – demography, technology, and political decisions. It was emphasized that despite globalization providing a number of benefits, they are spread unequally due to the asynchronous manifestation of the drivers. However, globalization has great potential from which all the countries may obtain a number of advantages.