The Future of Globalization

What is Globalization and how has it shaped the world

Globalization is the unrestricted movement of products, services, people, money, knowledge, and ideas around the world. From a commercial standpoint, globalization has aided businesses in reaching new clients in new markets all over the world, expanding their sourcing options, and providing a wider range of products and services.

While there is obvious potential for global growth, globalization can complicate and raise the risk of your company strategy, particularly concerning supply chains. Businesses frequently discover that expansion comes with increasing rivalry, legal difficulties, and difficulties with data collection.

Due to greater labor rivalry, cross-border economies of scale, and the shared advantages of the technology revolution brought on by the internet, increased globalization had a significant impact on the global economy over the past four decades. These consequences were further amplified by the fall of the USSR and China's expanded opening.

Globalization might not be an exception, though, as trends typically peak and then decline. Deglobalization is a term used to describe the globalization process going backward. This became a hot topic in 2017 as a result of the ongoing trade conflict between the US and China. Several things have happened since then that have combined to keep this potential trend reversal in the news. In particular, Covid-19-related shocks to global supply chains, the conflict in Ukraine, and a change in corporate priorities from operational resilience to efficiency have made it necessary to re-examine the future of globalization and the potential effects on investment portfolios.

How the Future of Globalization looks like?

In the near future, globalization appears doomed. Throughout the last decade, we have watched the irregular retreat of globalization, initiated by the 2008 financial crisis. The international response to the economic collapse resembled the one that came after the 1929 stock market disaster in many aspects. The deep recession and high unemployment sparked right-wing nationalism, populism, and protectionism in millions of people around the world both then and now as a solution to their perceived losses. The anti-globalization wave occurred in both instances as a result of a shift in global dominance, this first from Europe to the United States and again from the United States to Asia.

The combination of these factors sparked the world's bloodiest war in 1939. As societies become ever more polarised and the risks of great-power conflict rise to unprecedented levels since the end of the Cold War, we have to look closely at the lessons taught by history so as never to forget them. Fortunately, the world is more interconnected and interdependent than ever. The foundations of international peace continue to be regional integration and multilateralism. The only way to ensure long-term prosperity is to strengthen them, even in the face of growing deglobalization.

If the world overcomes this transient anti-globalization wave, globalization may even grow stronger. The march of technology is, after all, inexorable. And so are cross-border flows of fresh ideas, people, and goods. The challenge of today is to ensure that a new, less Western global order is established peacefully and smoothly; the challenge of tomorrow is to maintain globalization as billions of new consumers enter the middle class. In this scenario, technology must serve not only individual well-being but also a new balance between man and nature.

DIGITAL ERA OF GLOBALIZATION

In terms of trade, communication, and travel, the world has never been more interconnected than it is now. But the pattern of globalization is evolving. Commerce was historically dominated by tangible items and was mostly confined to wealthy economies and their enormous multinational enterprises. Today global data flows are surging, and digital platforms allow more countries and smaller enterprises to participate. This shift has far-reached implications.

Information, searches, communications, transactions, video, and intracompany traffic make up the majority of the world's data flows. They support and facilitate almost all other types of cross-border flow. Container ships still deliver products to markets throughout the world, but now buyers order them online, trace their movement using RFID chips, and pay for them via digital transactions. Although videos use a majority of Internet bandwidth, the Internet of Things and other business applications are gaining importance. In fact, according to Cisco, machine-to-machine connections will make up more than 40% of all devices and connections worldwide by 2019.

New Technologies that boost the globalization

E-commerce:  Around 12% of the global goods trade is via international e-commerce platforms like Alibaba, Amazon, eBay, Flipkart, and Rakuten. Mobile commerce accounted for 58.9% of digital sales in 2017. Likewise, traditional markets now don’t need any kind of physical store to expand your business. You just need such platforms.

Cross-border payments:

The reach of Freelancers, work-from-home culture, and small and medium enterprises is increasing due to Digitization. The demand for a common cross-border payments platform is immersed, several platforms like PayPal, Skrill, Stipe, Square, and Venmo are available now, which facilitate cross-border payments without high payment charges.

Fleet management system:

With the enhancement in technology, now you can manage your logistics fleet. Fleet management systems are the software that allows companies to organize and coordinate work vehicles to improve efficiency, reduce costs, and provide compliance with government regulations. With the help of many sensors like cameras, thermostats, pressure sensors, and GPS you can monitor not only your fleet vehicle location but also drivers’ activities, and the conditions of your goods.

Digital Entertainment Platforms:

Platforms like Netflix, Amazon videos, YouTube, play store, Spotify, etc. are enabling us to instantaneous exchange virtual goods, E-books, apps, online games, MP3 music files, and videos. Now it doesn’t matter in which country we live or the type of resource we have, we just need content and internet connections to go global.

Technological Advancement specially Digitization has played a vital role in strengthening globalization. In the 21st century, the Intangible flow of data and information is soaring, participation of emerging economies has increased, digital infrastructure has become equally important, exchange of free content and services has increased, instant access to information, and innovation flow in both directions is boosting the future of globalization.

Growing trends in regions

FLEET MANAGEMENT SYSTEM: Because of the widespread adoption of real-time monitoring solutions across industries for efficient corporate operations, North America is expected to lead the global market. Vehicle monitoring systems are being used more and more by American automakers like General Motors, Ford, and Fiat-Chrysler. Another factor influencing the expansion of the market in this region is the fact that the region was an early adopter of digital technologies. However, the Asia-Pacific region of China and India is expected to grow with significant CAGR, due to an increase in the demand for logistics.

CROSS BORDER PAYMENTS: At the moment, the North American region dominates the market for international cross-border payments. The North American market is primarily driven by the existence of top commercial banks, a strong technical infrastructure, strict rules, advantageous prospects for cross-border payment solution providers, rapidly expanding cross-border e-commerce sales, and supply chain diversification. Asia-Pacific is currently the region in the world with the fastest-growing cross-border payments market. However, demand for cross-border payment in growing economies like China, India, and others small will grow significantly due to the increase in startups, small and medium enterprises, and freelancing activities.

DIGITAL ENTERTAINMENT PLATFORMS: In 2019 North America dominated the online entertainment industry, and it is anticipated that it would continue to do so during the projected period. The region's superior digital infrastructure, a high percentage of digital literacy, and quick acceptance & favorable response to technological innovations are the main factors boosting the market for online entertainment. Also, the expansion of the online entertainment market is aided by the rise in the popularity of online games.

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In terms of trade, communication, and travel, the world has never been more interconnected than it is now. Commerce was historically dominated by tangible items and was mostly confined to wealthy economies and their enormous multinational enterprises. Information, searches, communications, transactions, video, and intracompany traffic make up the majority of the world's data flows. They support and facilitate almost all other types of cross-border flow. Advanced technology is helping firms like logistics firms, digital entertainment platforms, e-commerce firms, etc. to go global and enhance currently available services for globalization like logistics, supply chain management, etc.