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Unit 4: Globalisation in World Economy

reliable—and low priced. Multinational companies that concentrated on idiosyncratic consumer Notes
preferences have become befuddled and unable to take in the forest because of the trees. Only
global companies will achieve long-term success by concentrating on what everyone wants
rather than worrying about the details of what everyone thinks they might like.

Task Study the FDI reforms and find out what percentage of FDI is permitted in various
sectors.

4.2.3 Globalisation of Technology

 Lower trade barriers enable companies to view the world as a single market and establish
production activities in optimal locations around the globe.
 This has led to an acceleration in the volume of world trade and investment since the early
1980s.
 The development of the microprocessor has lowered the cost of global communication
and therefore the cost of coordinating and controlling a global organisation.
 Web-based transactions have grown from virtually zero in 1994 to $250 billion in 2007 in
the U.S. alone, and Internet usage is up from fewer than 1 million users in 1990 to 1.3
billion users in 2007.
 Commercial jet aircraft and super freighters and the introduction of containerisation have
greatly simplified transshipment from one mode of transport to another.

Self Assessment

State whether the following statements are true or false:
8. The Federal Reserve is an example of a global institution.

9. Declining trade and investment barrier is a factor underlying the trend toward greater
globalisation.
10. Coca-Cola, Sony Playstations, and McDonald’s hamburgers are all examples of American
products.



Caselet Technology Globalisation
lobalisation of Technology can be measured by the global presence of a technology
company. One simple measure might be the number of non-U.S. companies traded
Gon the NASDAQ exchange. Presumably, NASDAQ trading reflects a non-U.S.
technology company’s ability to break through regional barriers and gain international
recognition.

Consider these numbers: As of August 5, seven companies that are registered in Australia
are traded on NASDAQ; six that are registered in Japan, five in the UK, four in Singapore,
two in France, three in Germany, two in South Korea, three in India, three in Argentina,
one in Brazil, one in Spain and one in Sweden. In contrast, one figure stands out: 63
companies registered in Israel are traded on NASDAQ.
Source: knowledge.wharton.upenn.edu/article.cfm?articleid=2316

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