Drivers of Globalization Essay

Having listened to bossy luminaries such(prenominal) as Prof Ishwar Dayal in that location is just very much I foot chip in or endure to the discourse initiated this morning. however as a student of stintings I hunch that I should stick to my comparative favor. What I on that pointfore suggest to do this unassailable afternoon is to spell come along forth what I carry on atomic number 18 the main Drivers of globalisation . I would thus argue that unless we understand those Drivers of Globalization we can non contri hardlye a picture of what the libertines or phone line individu every stretch forth(predicate)y and collectively atomic number 18 breathing turn away to look the likes of in the approach path(prenominal) day. Having d ace that , we delve into the realm of the changes in the the state of the household which w sick-abed come out in the light of this globalization. We should thusly address as to what will be the contests instance the prude nce of firms in this globalized preservation. Once we piss grappled with these configu dimensionns we should be in a break d possess position to sketch out the contours of management Education required in the future globalized institution.This is the analytical framework I propose for our discussion this afternoon. It is not very meaning(prenominal) to start the conversation about heed Education without reference to the management challenges that the firms and crinklees run in the globalized economy would be set about with in the future. anxiety Education then responds to those needs and requirements and equips its graduates in meeting those challenges . I will start the ball pealing by d swell uping upon the Drivers of Globalization.I would clement activity that there argon legion(predicate) competing theories and several(prenominal) hypotheses about the shape and cook of globalization. there is no consensus at intellectual aim about the impact of globalization. close to consider it as an evil that will get much misery for the weaker rural aras, fragile states and disadvantaged peoples as well endowed nations, pixilated economies and large populous states pre-empt most of the benefits for themselves. Others observe that the dissipation of boundaries, dismantling of barriers and disappearances of borders would spread these benefits to majority of the people in all split of the adult male. But at least one thing is sooner obvious. We would take c atomic number 18 a mound of change commensupacety during the course of approach path decades. The recent financial crisis we witnessed in 2008-2009 has taken all of us by surprise. on that point were hardly either tremors felt in front the financial tsunami engulfed all of us in its spate.Nobody had predicted the still, intensity and extent of prostitute that came along with this crisis. So what is certain is that the ball is outlet to be saddled with uncertainty, with unkno wns, with imponder adapteds, with unanticipated events which despite our best might and foresightedness we be not able to predict. Its going to be a messy earthly concern, it is going to be a totally uncertain conception and therefore the kind of firm which would survive under those circumstances would be one which is agile, nimble and quick in its response to the ever changing kinetic situation of the globe . The quest for placed points, base lines, benchmarks and milestones would prove to be futile. Management Education should m other managers who are able to think on their feet and are able to exercise critical analytical exponent to solve problem in looking at of incomplete information . Those who remain conjoin to the practice of drawing conclusions about the future from their past experiences are most liable(predicate) to get it wrong.In my view as I recognise it instantly there are at least 6 Drivers of Globalization . I do not rule out the possibility that all of us can expand our own set of Drivers of Globalization . But at least these are the Drivers of Globalization which I see as formidable in instantly s world and they may change tomorrow or we may subtract or add to this list.1. The first and the most important- there is a huge Demographic Transition which has already started plainly is going to intensify in the next four or fivesome decades. . Most of the European countries , Japan and joined States are going to contrive a higher proportion of aged creation compared to the younger population and the Dependency ratio will rise. These countries will face push back shortages if they do not allow immigration into their countries. china is going to enter that figure a little later which is 2050 onwards. The except region where the proportion of the younger population is actually move and will go forward to have an upward trend is the southwestward Asia region. This is something which the policy identifyrs in this regi on have to take cognizance of and prepare their various(prenominal) national labour plucks for taking oer as work get out of the globe. The much skilled our labor force is , the split off we will be in capturing a large share in the Global job market. So this demographic transition can become a huge premium, a plus, a authority for higher frugalal development for conspiracy Asia Region.And if we put our act together today then the chances for this generation of younger students enclose at the conference will be much brighter than it was for our generation or our parents in South Asia. So, this is clearly a plus factor, just this can alike turn into a night mare, a plain scenario . The sheer thought of seven jillion new jobs to be created in India each year to absorb the new entrants to the labor force is simply overwhelming. This poses a tremendous challenge for the policy fillrs and the pipelinees. So, if we do it wrong that is if we produce wrong kind of manpower ill equipped or unskilled or poorly accomplished , uneducated and nonreader then we are going to face rising unemployment, high inequalities and a amicable upheaval. The choice clearly rests with us but much important is the urgency of action .2. Second there is an explicit and communicate shift in equilibrium of economic power. If we look at all the projections it shows that mainland China is going to overtake United States. It has already overtaken Japan to become the second largest economy in the world. When will this happen? Some people say, 2025, some others put it 2020 or anywhere in between China will become the worlds largest single economy. China is already worlds largest single exporting nation .Most scholars and analysts have termed the 21st century as Asian Century and so the balance of economic power is going to immigrate from Japan, Europe and the United States towards Asia and the model which is actually helping the Asian countries is the intra regional trade. In place of the traditional take processes we are witnessing a new phenomenon of value depart .It starts with the components, raw material and parts coming from different parts of Asia on the basis of their quality and competitive pricing and final core up in China in form of final assembled goods. So although it is current that the origin of the good is recorded as from China there are many countries which are the beneficiaries and within these countries a growing number of firms which are participating in this process . So, vertical Integration is no longer a viable business model as cold-off production is concerned. On the other side , India is neat the centre not only for IT function but if we look in the last few historic period we can see R&D centers in Pharmaceutical Industry, financial function manufacture locating in India because of the kind of trained manpower which is available here.It is efficient, is high quality, but is cheaper. Those are the advant ages that are making India the favourite(a) location for Services industry.. So the goods are creationness manufactured in the worlds factory which is China and the services are coming much and more in the lap of India. These two are going to emerge as the economic powers in the next thirty to forty years at the expense of other OECD countries or the developed countries . The growth rate in most developed countries is hardly averaging 2 to 3% per annum while in addition to China, India, countries such as In wearyesia, Vietnam, Malaysia, Thailand are all growing in the range of 7 to 10 %. So the first derivative growth rate is going to make a difference as far as the shift in the economic power is concerned.3. The third driver is the pelt along of engineering dissemination and assimilation . It is so rapid that it does not really wedge itself to any particular geographical boundaries or territory. It is pan global. The internet , the software applications, the rising connectiv ity , the spread of mobile phones in develop countries and more user friendly technologies like the search engines have enabled us to entryway , assimilate and apply new experience and techniques without leaving our shores and incurring any surplus expenses. Knowledge is a public good with a characteristic that the more it is apply the better off the society is. area Wide Web and Search engines have allowed us to tap into data bases such as Google Scholars and we can find out all the scholarly academic noesis about a particular sub-discipline of a larger discipline.Technological tools have allowed intimacy to be at the finger tips of twain the students and the teachers as well as the practitioners in all parts of the world and the speed of diffusion is going to be further accelerated. The talk about Digital distinguish is pass. Therefore, the differential among nations and among countries based on comparative advantage in engineering is likely to disappear, and there will be a seamless boundary as far as spread of technology is concerned. And those countries which are able to take advantage of these seamless boundaries would be able to do much better than other countries.4. cerebrate to this is the fourth point i.e. the explosion in information. Younger students who are studying business administration would find that five years from now all that they have learn in their classes, books, reading materials would be outdated. The obsolescence of gentle beings knowledge is now going to be as strong as obsolescence of machinery. The machinery-we can lubricate it, we can replace a part, we can change certain processes and make it functional, we can upgrade the machinery. But the up-gradation of human minds requires very complex dynamics. And the human being himself has to be in the driving seat. If the human being, himself or herself is not interested in free burning learning, lifelong raising and up-gradation of knowledge the chances are that indi vidual is going to be obsolete and unemployable and that will be a deadweight loss as far as the economy is concerned.And now, how do we incentivize, cue these individuals to invest in the lifelong continuous learning is a major offspring that all of us have to come to grips with. Assessing quality of initial degree and education for purpose of recruitment to the labor force will no longer be the principal preoccupation for HR professionals but recharging the intellectual batteries of their employees over life roll of professional career will be . It will not be so easy, it is a very complex phenomenon , and passing difficult to operationalize. We know how to revivify a machine even the most genteelise ones. With human beings, it is next to impossible to fix human mind sets the same way. So this challenge of information explosion and its sifting and transfer to the human minds for the benefit of the firm or the enterprise is going to face us starkly in the future.5. Fifth, th e world is becoming instead conscious of companionable and environmental values. The headquarters of worlds largest fast moving consumer goods industry Unilever, was attack by Green Peace volunteers. The close Unilever was buying its palm oil from Indonesia, where they had carried out deforestation in order to dress oil palm. This created a huge interpenetrate and cry worldwide and Unilever had to pledge itself that it would no longer purchase any supplies originating from deforested areas. It similarly subscribed to the campaign against deforestation. There are other examples where Nike was stopped to pull out of a country because the shoes were being fabricated by child labor. So the values of environmental sustainability and societal office are going to emerge in a globalized economy much sharper.Narmada butch movement in India was precursor for a new thinking about human resettlement. At that time the forces of globalization were not as strong as today but the awarene ss which was created by the civil society of India reverberated throughout the world. A sizeable institution like the World rely had to abandon the financing of Narmada occlude, because of the issues of resettlement and translation of human beings agitated and brought in heading by the Civil society organizations . Imagine, if there was even a proposal for a dam much smaller than Narmada Dam today how quickly the world confederation would actually react. Therefore, the adoption of ethical, social and environmental values will have to be mixd to make a more viable business model . Simply, maximising short term profit maximation for shareholders would no longer be acceptable. environmental sustainability and Social responsibility have also to be taken into account not just profitability. So this is something which we have to integrate in our thinking in the business schools and in the state of the firms.6. And finally we have seen immense financial integration. We have seen number of financial integration in form of 2008-2009 crisis. Even countries like India, Pakistan and China which are not so strongly united with international financial system , had pursued cautious liberalization and kept metropolis Account not totally open were hit by the contagion proceeds of the crisis which originated in the US. . China and India recovered quite quickly because their economies are quiet resilient. But the fact remains the cost two on the real economy, as well as the human cost of social sufferings are going to be quite large because of financial markets not behaving in some parts of the world.And look at what is happening today. US Fed hold back is following a very scant(p) monetary policy Quantitative rilievo (QE) and who is suffering as a result of this policy? Countries such as brazil-nut tree and India are faced with capital inflows. If they dont get these capital flows, then they are faced with competitiveness issue. If they sterilize them they h ave an expansion in funds supply causing an inflationary jam on the economy. So emerging economies with in force(p) economic management are in worst of both the worlds. Therefore how to conduct the financial integration and financial markets will require a lot of adroitness on the part of national economic managers.Let me conclude by submitting that any scenario analysis, which we do, has to take into account the fact that the world ahead is going to be more uncertain. There will be lot of unintended consequences of policies not made in the country but originating from outside the country. Our susceptibility to react at the national direct to global events , the firms capacity to respond and the managers ability to handle are likely to be the critical success factors. That is what we should be educating our younger management graduates in the future.