SLIDE 2

So what is GLOBALIZATION? What does the concept of globalization ENTAIL?

GLOBALIZATION has been defined as: the increased INTERCONNECTEDNESS and

INTERDEPENDENCE
of peoples and countries

It is generally understood to include TWO inter-related elements:

the opening of international borders to increasingly fast flows of goods, services, finance,
people and ideas;

and

the changes in institutions and policies at national and international levels that facilitate or
promote such flows.”

SLIDE 3

From an economic point of view,

globalization can be defined
as the increasing interdependence of world economies
as a result of

the growing scale of cross-border trade of commodities and services,

the flow of international capital

and the wide and rapid spread of technologies.

It reflects the continuing expansion and mutual integration of market frontiers (…)
and the rapid growing significance of information
in all types of productive activities and marketization
as the two major driving forces for economic globalization.”

SLIDE 4

IN OTHER WORDS, Globalization is manifested through:

Increased TRADE between different countries -

and as trade began to increase between countries..the demand for business grows as well
resulting to increase in FOREIGN DIRECT INVESTMENTS...
which means the investments made from ONE country
to ANOTHER country,
either in the form of ESTABLISHING BUSINESS OPERATIONS
OR
ACQUIRING business assets or shares

Same goes with CAPITAL FLOW - or the movement of money for the purpose of investment,
trade or business production

LABOR MIGRATION, wherein certain types of jobs are more in demand in some countries than
elsewhere. - like the Philippines which continue to benefit from remittances from its overseas
workers

Lastly, ADVANCEMENT OF TECHNOLOGY

allowing immediate communication and transfer of information
NOW, more than EVER

SLIDE 5

Because of globalization,
International Business likewise flourished.

So WHAT IS INTERNATIONAL BUSINESS?

International business encompasses ALL

commercial activities that take place
to promote the transfer
of goods, services, resources, people, ideas, and technologies across national boundaries

TODAY, International business is UBIQUITOUS, MEANING - it is found everywhere.

From our gadgets like cellphones, laptops, to the food and medicine we consume, to the
clothes we wear -
these are all WEB of products and services
produced in a way as a result of INTERNATIONAL BUSINESS:

Thus, International business touch every aspect of our lives

wherever we are in the world.
It is intimately related to the ECONOMIC, SOCIAL, and ENVIRONMENTAL WELFARE of people
around the world.
So how did International Business come about?
What led to the growth of International Business
as we know it today?

SLIDE 6

International business activity has long existed since the earliest civilizations.
We can trace early form of International Business to the trading activities of the Ancient
Egyptians and Phoenicians.

During the 15th century, there was cross border activity of banking families such as the House
of Medici in Europe,

And in the 17th century, during the era of colonization, trading companies emerged
such as the East Indian Company, Hudson Bay company, and the Dutch East India Company.

In the second half of the 19th century, Foreign Direct Investment - mainly on raw materials
from colonial territories -
and the modern multinational emerged.

Through the later 19th and early 20th centuries,

International Business became more COMPLEX
as companies expanded across nations
AIDED by new transportation and communication technologies,
such as the steam train and telegraph.

SLIDE 7

Without a doubt, the development of Interenational Business was DISRUPTED in the first half of the
20th century by the two WORLD WARS.

Thereafter, during the 1950s, the Post-WWII era witnessed a surge of International Business activity.
The US was the dominant economic force.

Yet, this was far from being a GLOBAL phenomenon since the world was still divided into 2 opposing
ideologies: Western Capitalism and EASTERN socialism - a separation that lasted for more than 40 years.

Nevertheless, International Business, under the Western capitalist system, FLOURISHED.

From here on onwards, a number of INTERNATIONAL INSTITUTIONS were established to facilitate the
growth of international trade and investment:
such as the International Monetary fund (or IMF),
and the WORLD BANK,
or what is known as the BRETTON WOODS AGREEMENT
(which was established to construct an international monetary system)

The 1940s to late 1960s - was a period of stabilitiy, economic growth and international integration.
MNEs, or multinational corporations, emerged.
Eurpoean MNEs developed post WWII followed by Japanese MNEs in the 1960s.

The post WWII period of economic growth came to an end in the 1970s with the collapse of the Bretton
Woods system, the oil price increases and recessions in the Western economies.

As a result, the 1970s onwards move towards INTERNATIONAL PRODUCTION and international division
of labor ... and sophisticated supply chains.
Export Processing Zones were established in many developing countries

The 1980s ushered in a new era of ECONOMIC INTEGRATION with with the rise of NEO-LIBERAL
ECONOMIC POLICIES - such as privatization and deregulation.

In the 90s, offshoring and outsourcing of labor developed as a result of new technologies.

SLIDE 8

In recent times, we have also seen SIGNIFICANT ELEMENTS that have ADVANCED International
Business, such as:

The formation of the World Trade Organization or WTO in 1995

The inception of Electronic Funds transfers wherein transfers of money can happen ALMOST
REAL TIME

The introduction of the Euro to the European Union,

The RAPID PACE OF TECHNOLOGICAL INNOVATION that facilitates global communication and
transportation, -

Lastly, we have seen in the last few decades the dissolution of Communist Markets, and the
Rise of China -
further OPENING UP the global economy.

SLIDE 9

Along with the RAPID growth and development of International Business - comes CHALLENGES
AND CONSIDERATIONS affecting its future:

While International Business continues to grow, HOWEVER, Wealth disparities among nations
remain vast.
As a result, WEALTH AND POWER are still POLARIZED to certain superpowers, most notably the
United States and China
controlling majority of global trade and production

We should also not forget about rapid development and its negative effect to the environment

Recently, we have also seen the rise of Artificial Intelligence, which results to displacement of
labor and human capital

SLIDE 10 - COVID

As a final note, we should also consider the CHALLENGE and QUESTIONS posed by the Covid-19
pandemic:

What would be the effect of COVID-19 to International Business and Globalization as well?

Will this lead to a WORLD LESS OPEN, PROSPEROUS AND FREE?

Will this crisis LEAD TO THE END OF GLOBALIZATION as WE KNOW IT?

Will the crisis accelerate the SHIFT in POWER and INFLUENCE from the West to the East? Will
this lead to a more China-Centric Globalization?

These are just some of the questions being posed to

ALL of us
as we shift to the NEW NORMAL,
and find ourselves in the CROSSHAIRS of HISTORY

Cultural/linguistic diversity: There are more than 10,000 linguistic/cultural groups in the world.
Country size and population diversity: There were about 60 countries at the start of the
twentieth century; by 2000, this number grew to more than 200.