INBU 3301

• Globalization


  Opening up and integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology
• Globalization of markets


  The merging of historically distinct and separate national markets into one huge global marketplace
• Globalization of production


  The sourcing of goods and services from locations around the world to take advantage of national differences in costs and quality of factors of production (labor, energy, land and capital)
• Globalization of production at Bombardier


  • Designated Metal Connection (DMC) from the United States
  • Kobe Steel LTD from Japan
  • Chengdu Sigma Precisions Components from China
  • Chemetall GMBH from Germany
  • Centro Tratamientos from Spain
  • Castle Metals from Mexico
• Lack of Barriers to Trade and Investment allows Bombardier to maintain a competitive position when compared to the competition's products and services
• Globalization of production in itself is not a guarantee for success as it needs to be incorporated into a company's overall operational strategy
• Bombardier is a successful Canadian builder and exporter of regional airliners, business jets and equipment for public transportation
• Bombardier has production and Engineering sites in 25 countries and revenues over $21 Billion in 2019
• It is often difficult for all components needed for an aircraft to be made domestically as developing a high degree of specialization for every component is often impossible
• The world is embarking on a critical year for the future of democracy which could impact how they view globalization
• In 2024, more ballots will be cast than in any other year in the history of the world. They will not only be voting for a particular leader or party but for the future of their civil liberties
• The loss of manufacturing jobs in the US prompted a reconsideration of globalization - and all of this was happening even before the COVID-19 pandemic
• Countries embraced globalization into the world economy because they feel it serves their interest
• The critical question in this year's elections in all democracies is a reconsideration of the terms on which they will engage with globalization
• Globalization created winners but also losers
• Greater self-sufficiency for national security or economic reasons has led to "America First" and "India First" policies
• Globalization, while seeking to advance national interests, also can mitigate nationalism
• Less globalization and more protectionism will inevitably translate to more nationalism - a trend that will also hurt global trade; especially for smaller countries that need the rising tide of open borders and commerce
• The crisis is in part a crisis in nationalism, which today seems to revolve around issues: how nations define membership; how they popularize a version of historical memory; how they locate a sovereign identity; and how they contend with the forces of globalization
• If Trump wins the US elections

  Unlikely to be Canada's closest friend and ally, put up tariff walls, NATO would be weakened, countries like Russia, China and Iran would increase in power, realignment of Canadian foreign policy, increase in defense spending at the expense of social programs
• Globalization


  Refers to the shift toward a more integrated and interdependent world economy
• Facets of globalization


  • Globalization of Markets
  • Globalization of Production
  • Globalization of Consumers
• Consumer products that are prototypical examples of globalization

  • Citicorp credit cards
  • Coca-Cola soft drinks
  • Apple iPods
  • McDonald's hamburgers
• Firms such as Citicorp, Coca-Cola, McDonald's, and Apple are more than just benefactors of globalization; they are also facilitators of it
• Globalization of Markets and Consumers

  Refers to the merging of historically distinct and separate national markets into one huge global marketplace, falling barriers to cross-border trade have made it easier to sell internationally, tastes and preferences of consumers in different nations converge on some global norm, thereby helping to create a global market
• Globalization of Production


  Refers to the sourcing of goods and services from locations around the world to take advantage of national differences in costs and quality of factors of production (labor, energy, land and capital)
• Companies lower overall cost structure and/or improve quality or functionality of product offering, thereby allowing them to compete more effectively through globalization of production
• Global institutions


  • United Nations (1945)
  • World Trade Organization (WTO) preceded by the GATT
  • International Monetary Fund (IMF)
  • World Bank
• World Trade Organization (WTO)


  Responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by WTO member states
• International Monetary Fund (IMF)


  Created to maintain order in the international monetary system, lender of last resort to nation-states whose economies are in turmoil and whose currencies are losing value
• World Bank


  Promotes economic development by providing low interest rate loans to cash-strapped governments that wish to undertake infrastructure investments
• The IMF's policy recommendations are often criticized as being inappropriate
• Entities that make up the World Bank

  • IBRD - the International Bank for Reconstruction and Development
  • IDA - International Development Association
  • IFC - International Finance Corporation
  • MIGA - Multilateral Investment Guarantee Agency
  • ICSID - International Centre for Settlement of Investment Disputes
• Canada's Dept. of Foreign Affairs has a section on their website providing an overview of the steps a company must take to be involved with World Bank projects
• Drivers of globalization

  • Decline in barriers to the free flow of goods, services, and capital, since the end of World War II
  • Technological change in communication, information processing, and transportation
• Declining Trade and Investment Barriers

  Lowering barriers to international trade enables firms to view the world, rather than a single country as their market, reducing and eliminating trade and investment barriers allows firms to base production at the optimal location, serving the world market from that location
• Technological change


  Has made globalization of markets and production a tangible reality, through advances in communication, information processing, and transportation technology, including the explosive emergence of the Internet and World Wide Web, microprocessors and telecommunications, and transportation innovations
• In 1990, fewer than 1 million users were connected to the Internet. By 2019, approximately 4 billion Internet users
• The Web makes it much easier for buyers and sellers to find each other, wherever they may be located and whatever their size, and enables enterprises to coordinate and control a globally dispersed production system in a way that was not possible 25 years ago
• Historical Changing World Output and Trade

  • USA
  • Germany
  • France
  • Italy
  • United Kingdom
  • Canada
  • Japan
  • China