“ABOUT THE CONCEQUENCES OF GLOBALIZATION”

“ABOUT THE CONCEQUENCES OF GLOBALIZATION”
Well the consequences of the globalization are many so we think that talk a litte of the concequences weather this are good or bad is a necessary thing in these blog.
In these post I’ll explain what is foreign direct investment and why it’s a direct consequence of the globalization. For that I have use the text book information also my team and I create a short survey to see if at least in our homes or in the itam the people know the names of the major companies that are established in México and the interesting thing in here it’s that if the people will put the names of foreign or Mexican companies so then we will have an idea of how much globalized we are.
Well first of all what is FOREIGN DIRECT INVESTMENT Or FDI? FDI occurs when a firm invests directly in facilities to produce or market a product in a foreign country these is a direct consequence of globalization because many of the major companies are outsourcing their productions and not only that many of them are global companies or at least multinational companies so FDI it’s a very necessary thing when the local markets are insufficient for countries who are too small to produce all they need FDI it’s also a necessary thing so FDI changes into a bidirectional need.
Survey
La encuesta se trata de poner el nombre de 2 compañías que tengan presencia en mexico, si no recuerdas el nombre de alguna pon un tache en el inciso correspondiente y continua.
Compañías que vendan o manufacturen refresco.
1.-
2.-
Compañías que vendan o manufacturen café.
1.-
2.-
Compañías que vendan o manufacturen cemento
1.-
2.-
Compañías que se dediquen al retailing o al negocio del supermercado.
1.-
2.-
Negocios tipo restaurantero o comida rápida
1.-
2.-

i will post the results soon for instance i put the survey to see your opinions
the results:
coca cola 65%
pepsi 30%
pascual 5%
starbucks 70%
nescafe 29%
punta del cielo 1%
cemex 90%
cruz azul 10%
walmart 80%
superama 13%
comercial mexicana 7%
mcdonalds 49%
burger king 21%
toks 15%
sanborns 12%
steins 3%

so as we can see the results show us that almos noone think in mexican companies so our globalization levels are veri high that is a direct concequence from globalization and pheraps with naftas agreement the number of foreign companies in mexico has increase.

Corporations- Global Issues

Corporations
Author and Page information
by Anup Shah
Sunday, July 12, 2009

As the world starts to globalize, it is accompanied by criticism of the current forms of globalization, which are feared to be overly corporate-led. As corporations become larger and multinational, their influence and interests go further accordingly. Being able to influence and own most media companies, it is hard to be able to publicly debate the notions and ideals that corporations pursue. Some choices that corporations take to make profits can affect people all over the world. Sometimes fatally.

Advantages and Disadvantages of Globalization

Some Advantages

• Increased free trade between nations
• Increased liquidity of capital allowing investors in developed nations to invest in developing nations
• Corporations have greater flexibility to operate across borders
• Global mass media ties the world together
• Increased flow of communications allows vital information to be shared between individuals and corporations around the world
• Greater ease and speed of transportation for goods and people
• Reduction of cultural barriers increases the global village effect
• Spread of democratic ideals to developed nations
• Greater interdependence of nation-states
• Reduction of likelihood of war between developed nations
• Increases in environmental protection in developed nations
  
  Some Disadvantages
• Increased flow of skilled and non-skilled jobs from developed to developing nations as corporations seek out the cheapest labor
  Increased likelihood of economic disruptions in one nation effecting all nations
  
• Corporate influence of nation-states far exceeds that of civil society organizations and average individuals
  
• Threat that control of world media by a handful of corporations will limit cultural expression
  
• Greater chance of reactions for globalization being violent in an attempt to preserve cultural heritage
  
• Greater risk of diseases being transported unintentionally between nations
  
• Spread of a materialistic lifestyle and attitude that sees consumption as the path to prosperity
  
• International bodies like the World Trade Organization infringe on national and individual sovereignty
  
• Increase in the chances of civil war within developing countries and open war between developing countries as they vie for resources Decreases in environmental integrity as polluting corporations take advantage of weak regulatory rules in developing countries

Combating Globalization: Confronting the Impact of Neoliberal Free Trade Policies

By Richard D. Vogel

II. Rising Inequality: The War on Working People
The term globalization is a euphemism for the economic policies of neoliberalism and free trade that drive the megatrends ravaging the world today. Globalization in this essay refers specifically to the domination of the world economy by transnational capitalism through state-sponsored policies that subordinate the broad interests of communities and nations to the interests of the owners of capital.

The primary economic drivers of globalization are:

the capture of emerging CONSUMER and CAPITAL MARKETS to insure the continued accumulation of capital through sales revenue and interest income
access to cheap RAW MATERIALS and LABOR to increase the rate of capital accumulation on the production of goods and services
It is capitalism's relentless quest for cheap labor that impacts working people directly and drives the megatrend of rising inequality on both national and global levels. The creation of wealth by human labor, whether the worker is employed in agriculture, manufacturing, or service, is the sustaining activity of all societies and the division of that wealth between the workers and the owners of capital is the essence of class struggle.

To understand and combat globalization, it must be kept foremost in mind that it has been through consolidation of political power at every level of government from local to international that capital has attained its domination of working people in the modern world.

The following discussion focuses on the megatrend of increasing inequality in North America, but the same tendency is growing in both developed and developing countries around the world.



Rising Inequality

Chart 1 depicts the ongoing history of growing inequality in North America:



The Gini coefficient on the vertical axis of chart 1 is the most commonly used measure of income inequality within a nation (http://hdr.undp.org/docs/statistics/understanding/resources/HDR_2003_2_2_global_income_inequality.pdf). A low Gini coefficient indicates more equal income distribution while a high Gini coefficient indicates a more unequal allocation. 0 represents perfect equality (where every person has the same income) and 1 corresponds to perfect inequality (where one person receives all of the income in a society). The income measure used to calculate the Gini coefficients in chart 1 is disposable household income adjusted for household size.

The chart illustrates the trend of inequality that has been on the rise in the USA since the mid-1970s. By the mid-2000s the average household income of the richest 10% of the population was $93,000 per year while that of the poorest 10% was $5,800. The USA is the country with the highest inequality level and poverty rate in all of the counties monitored by the Organization for Economic Co-Operation and Development (OECD) except Mexico and Turkey (www.oecd.org). Since the mid-1980s the distribution of earnings in the USA has widened by 20%.

Accumulated wealth in the USA is allocated even more unequally than income. Currently the top 1% of the population controls 25-33% of the total wealth in the nation, while the top 10% holds 71%. Redistribution of income by government through taxation and the provision of social services in the USA is the lowest in all of the countries monitored by the OECD except South Korea.

The inequality trend in Canada has had a distinctly different history from that of the US. Chart 1 shows that inequality actually decreased from the mid-70s to the mid-90s, and then increased significantly throughout the last decade, mirroring the trend in the USA. The last 10 years has also seen dramatic increases in poverty rates across Canada.

The impact of growing income inequality on working people in both the US and Canada has been heightened by dramatic tax cuts for the wealthy and corresponding declines in social services and social benefits paid in both nations.

The sharp upturn in income inequality in North America is a direct outcome of economic liberalization policies like the North American Free Trade Agreement (NAFTA) that will be examined in detail in the following analysis (The impact of NAFTA on workers in Mexico in contrast to the trends in the US and Canada will be the subject of a subsequent essay.)..

The War of Attrition against Working People

The decline in the fortunes of working people in North America (and worldwide) is a direct result of capital's relentless pursuit of cheap labor markets, a primary driver of globalization. Map 1 charts the history of the war of attrition that capitalism, led by US corporations, has waged against labor in North America in order to maintain high rates of capital accumulation for stockholders:








Working people in the USA have been steadily losing ground since the end of World War II. The Taft-Hartley Act of 1947 in addition to severely restricting the legal rights and grassroots activities that built strong unions prompted states to pass right-to-work legislation (http://www.auburn.edu/~johnspm/gloss/right-to-work) and thereby provided the means for businesses to relocate rather than negotiate with labor unions. The lightest arrows on Map 1 follow the subsequent runaway shop movement of the 1950s and 1960s.

During this period, many manufacturing and heavy industries, supported and subsidized by local, state, and federal agencies, moved their operations from Midwestern cities like Chicago, Buffalo, Cleveland, Detroit, Pittsburgh, and Milwaukee to cities in the South like Atlanta, Birmingham, Houston, and Dallas/Fort Worth where industries not only avoided closed union shops but also profited from a work force stratified along racial lines. The weak unions that did exist in the American South were either de jureor de facto segregated institutions that supported sliding wage and benefit scales which pitted white against Black and Mexican-American labor. Historically, the unions of the Deep South served the interests of capital far more than they did those of working people.

The American South did not remain the final destination of US capital for long. The termination in the mid-1960s of the bilateral Bracero Program that had been implemented during World War II to make Mexican labor available to US agriculture and the subsequent mass deportation of braceros, coupled with the widespread dislocation of workers in the weakened Mexican economy, produced a reserve industrial army for US capitalism just south of the international border.

Industrialists of the North quickly took advantage of this cheap labor market. The mid-tone arrows on map 1 mark the extensive migration of US light manufacturing and assembly firms to the maquiladoras that were established in northern Mexico under the auspices of the Border Industrialization Program (BIP) that was drafted by representatives of US capitalism and ratified by both governments in 1965. To this day, consumer goods and assembly parts produced in the maquila sweatshops continue to flood northern markets and undermine the position of workers in the Midwestern states, Canada, and even the Deep South.

The thin black arrows on map 1 represent the expansion of maquiladora manufacturing to the interior of Mexico under NAFTA and into Central America and the Caribbean under the Central American Free Trade Agreement-Dominican Republic (CAFTA-DR). US capitalism is currently developing new offshoring initiatives under the Security and Prosperity Partnership (SPP) and has not given up on the Free Trade Agreement of the Americas (FTAA) which is aimed at exploiting labor markets in all of the nations of the hemispheric South.

The wide black arrows on map 1 symbolize the ultimate threat to all labor in the Americas--the massive offshoring of manufacturing, service, and professional jobs to the Far Eastern Pacific Rim and Southern Asia. This last strategic move by capitalism--the epitome of globalization--pits all workers in the Americas, blue-collar, white-collar, and even professionals, against the poorest and most oppressed workers on the planet.

If the trend of increasing globalization continues unchallenged, the final destination of ever more production, including the crucial North American auto industry which is currently expanding operations the America South and Mexico, could ultimately be the Far East.

The broken black line on map 1 represents another major trend that has undercut labor in the North--the massive onshoring of Mexican, Central American, and Caribbean workers to bolster capitalism in the USA and Canada. Although the practice of onshoring labor from the South dates back to the US conquest of Mexico in the 19th century, the first official US policy was the Bracero Agreement recounted above. After the termination of that bilateral agreement, the onshore manpower demand of northern capitalism was accommodated by a de facto gatekeeper policy on the southern US border that allowed the influx of migrant labor during periods of high demand and impeded migration during economic downturns.

As part of a strategy to meet the current economic crisis of capitalism, powerful sectors of the US business community want to adopt an official guest worker program to legalize the exploitation of labor from the hemispheric South while avoiding any social liabilities for workers or their families. Any such agenda must be recognized as nothing more than a program of transient servitude that undermines the position of all working people in North America and must be vigorously opposed (see Transient Servitude: The U.S. Guest Worker Program for Exploiting Mexican and Central American Labor at http://www.monthlyreview.org/0107vogel.htm).

A critical to music video from ska-p

“los hijos bastardos de la globalizacion”
Well searching on the internet I found this song about the bad things of the globalization this particular song has become the Spanish anti-globalization groups it’s from ska-p an Spanish group more or less anarchic but it’s interesting because offers a look into what these groups thinks about globalization so first here I post the letter in Spanish:
Comienza mi jornada cuando sale el solTengo 12 años, vivo en la desolación acá en otra dimensiónMis pequeñas manos son la producción de miles de juguetescon los que podrán jugar allá niños como yoVíctimas reales de un juego demencialla economía de mercado busca carne fácil de explotarLa macro producción que nos ofrece bienestarson millones de niños de esclavos, son niños esclavos, condenadosNO SÉ LO QUE ES GLOBALIZACIÓNNO SÉ LO QUE SON DERECHOS HUMANOSSOLO SOY UN ESLABÓN, UNA PIEZA MÁS DE UN PUZZLE MACABRONO SÉ LO QUE ES GLOBALIZACIÓNNO SÉ LO QUE SON DERECHOS HUMANOSSOLO SOY UN ESLABÓN, LA IRA DE TU DIOS.Con indiferencia les puedes contemplarcomo máquinas robotizadas produciendo sin parares un claro ejemplo más de cual es el dios que hay que adorarel fin justificará los medios ante el dios dinero, dios dineroNO SÉ LO QUE ES GLOBALIZACIÓN...Condenados, explotados¿Te escondes? díme por qué! ¿te avergüenzas? díme por qué!Cómo cambiaría completamente la situaciónsi fuese a tu hijo a quien dedicase ésta canciónno tiene amparo, a nadie le interesaal bolsillo, a los beneficios de la empresaEn occidente su llanto no se sienteel sufrimiento y la apatía no se venlas leyes son dictadas por la gran empresaCondenados, explotadosSon hijos bastardos de la globalizaciónTe importa a ti, me importa a mí, son hijos bastardos de la globalizaciónTe importa a ti, me importa a mi, ejércitos de esclavos de la puta globalizaciónProsigue mi jornada, ya se pone el solTengo 12 años, vivo en la desolación acá en otra dimensión.
Well first of all we can look that it’s clearly enough that it’s a very radical point of view and the link between globalization and market economy it’s very clear too, but the more important thing it’s the child employment and the obvious link with globalization well from my point of view even if well ok I give them that as true (it’s not necessary true but well ) arises the old dilemma: ok it’s true ther’s child employment in certain countries most of them are very poor and survive because of the “maquila” industry (we are one of them)well these countries like Vietnam china indonesia Filipinas for example could survive without the salaries of the maquila? Could china increase in this magnitude his GDP? Or could Vietnamese people survive the post war times without this income? Well it’s very interesting think about these subject so will be good if you post your opinion. you can also see the video in this urrl http://www.youtube.com/watch?v=h0_v3PqvuPY

Internet globalization and marketing

Internet has come to complete the computerization process that is being developed for decades, giving birth to a new era, the Digital. The digital revolution has allowed for a single channel. we can send text, picture and sound at the speed of light. But the biggest revolution the Internet has brought, especially with its popularity in recent years, which has finished removing the last frontiers of communication. This has meant that the culture of different countries are equal and converge towards a common culture, a mass culture.
As a result of this revolution, the newspapers and the gorements had lost the monopoly of information, today every pearson can report to all over the world, every institution, business, cultural or political, has its own media. Today, in the era of Internt, each of us can become a vehicle of information.
in this context rise a new tool for the companies a tool that apels to a mass culture here is an article that talks aboput international marketing that is an other concecuence of the globalization the article show some numbers like that only 6% of the companies in the survey will reduce his online marketing budget this fact tell us that online marketing seems to be very effective at least from the businesses point of view besides this 62% of the companies will increase the same budget for the next year.
The most popular thing for the online marketing are search engines banners and mails Google reports that the advertising in his portal have increase in 40 % in the last 2 years but a recent study from an international consultant shows that in the near future the most powerful marketing tools on the internet will be the social nets as face book or hi5 and a new tool developed in the past 2 years youtube the article predicts very well that YouTube will be use for political issues and now in the past presidential elections in the US and even in the midterm elections on Mexico we all reedy see that.

in the near future online marketing will be a powerful tool in the future as personal experience in the past Mexican election (midterm) when you go into YouTube’s site like in the Google site in the right side of the window you can see political advertisement so the online marketing it’s not a Sci-Fi picture it’s a reality and for better or worst it’s alredy here inda will stay more than enytig because of the low price and fast time lunching and more important than that the volume of people that you can touch, the most viwed youtube’s video its about 7 million visitors and it’s about the 80% of the population of our capital city and guess what it’s for free.

here is the link for two article one talks about internet and globalization and the other one talks about the marketing in the internet:

-http://www.noticias.com/articulo/14-05-2005/jose-perez-bermudez/internet-y-globalizacion-informacion-4h8c.html

-http://www.marketingnews.es/Noticias/Tendencias/20090129005

Vaticanomics: The Holy Father Tackles Globalization

By TYLER COWEN

Pope Benedict's Encyclical Letter, issued earlier this week, is full of critical comments about commerce, the profit motive, banks and businesses. The Rev. Thomas Reese, S.J., former editor of America, gushed to USA Today: "What politician would casually refer to 'redistribution of wealth' or talk of international governing bodies to regulate the economy?" Washington Post columnist E.J. Dionne even suggested that the encyclical "places the pope well to Obama's left on economics."

Yet for all its left-wing rhetoric on economic matters, the encyclical is not quite the "progressive" document that it has been trumpeted to be. The underlying assumption of the document is the continued reign of the status quo -- a globalized, wealth-creating market economy -- with some ethical adjustments. This is a fundamentally conservative piece of work. When President Obama meets with the pope tomorrow, we should not expect him to stand too far to the left of the president.

It is true that the encyclical registers many complaints about commercial society. It says that current economic arrangements create inequalities and injustices. It laments that people pursue self-interested goals without the broader community or the prospect of transcendence in mind. It says that "today's international economic scene, marked by grave deviations and failures, requires a profoundly new way of understanding business enterprise." It warns against "lowering the level of protection accorded to the rights of workers, or abandoning mechanisms of wealth redistribution in order to increase the country's international competitiveness." And it argues that "the continuing hegemony of the binary model of market-plus-State has accustomed us to think only in terms of the private business leader of a capitalistic bent on the one hand, and the State director on the other."

But the more the Catholic Church criticizes a given practice or institution without calling for its abolition, the more it seems to come to terms with its existence, urging reform but accepting reality. This encyclical, more than anything else, gives the reader the impression that modern capitalism, including some of its "financial cowboy" varieties, is here to stay: "The economy needs ethics in order to function correctly -- not any ethics whatsoever, but an ethics which is people-centred."

The encyclical recommends tougher financial regulation and an enhanced commitment to foreign aid, not to mention a greater role for global governance. Furthermore, management "must . . . assume responsibility for all the other stakeholders who contribute to the life of the business."

But for all the talk of regulation and global governance, such proposals are put forward without much urgency or excitement. We should probably not expect too much to come from the encyclical's call for more state power.

Most of the encyclical, appropriately, expresses a desire for ethical conduct. The importance of ethics for civilization is obvious, but of course good ethics, consistently applied, are hard to come by. People are very good at ethical and psychological compartmentalization, and so it is possible for them to offer the church nominal authority over the ethical realm while continuing their dubious economic behavior.

It should be said that, despite moments of coherence, the encyclical is a sprawling mess that reads as if it was written by a bureaucracy that felt it had to mention everyone's concern. What does it mean to write: "The transition inherent in the process of globalization presents great difficulties and dangers that can only be overcome if we are able to appropriate the underlying anthropological and ethical spirit that drives globalization towards the humanizing goal of solidarity"? It sounds as if somebody has read Hegel. It's good that the document repeatedly reminds us that globalization doesn't have to be bad. But what exactly do we do with that knowledge?

Many of the encyclical's generalizations tend to favor the point of view of the left. For instance, the document refers repeatedly to growing inequalities, but in fact, at the global level, inequality has been falling, most of all because of the continuing economic growth of China and India.

Although it was just issued, the encyclical already feels dated. Globalization is one of the main concerns in the document. Yet because of the financial crisis, international trade has been falling apart. The real worry is not how to manage the economic globalization we have but how to stop the world's rapid deglobalization, which is at a pace that matches the collapse of trade in the 1930s. For better or worse, economic rather than ethical factors will determine the outcome here.

There's a section of the encyclical that worries about labor outsourcing, a practice that -- like many other forms of international trade -- is actually shrinking. The fear expressed in the document is that outsourcing will lead to a downsizing of social-security systems, but the real problem has turned out to be an across-the-board loss of jobs, both in the countries that demand outsourcing and in those that supply it.

The encyclical's statements about microfinance stand out. For all of its qualifications and talk about an ethical framework, the document endorses microfinance in two different sections. Keep in mind that many microfinance loans charge the borrower 50% or 100% interest a month and sometimes subject nonpayers to neighborhood intimidation; the church has come a long way from medieval usury laws.

Overall, the encyclical does not portray either Pope Benedict or the church generally as a notable source on economics and justice. A guiding principle of the document is that truth should illuminate charity, and indeed the very title of the document -- "Caritas in Veritate" -- refers to "love in the light of truth." But we are never told how much religious ethics can ever constrain the free market.

A truly revolutionary document would have dealt with the rise of China and India. Though Western society has experienced a widespread secularization, our versions of capitalism and democracy are still based squarely on Christian ideas, and I believe this marriage of liberalism and Christianity has been for the better. China and India, despite each having some number of Christians, have no realistic prospects for a comparable ideological accommodation between morals and markets, and so we are entering uncharted waters.

How will the rise of non-Christian powers affect the practice of capitalism? Will Christian and non-Christian societies understand each other well enough to negotiate successful international agreements? To what extent will Europe even manage to stay Christian? By some accounts Islam is the most frequently practiced religion in the Netherlands today.

You'll search this encyclical in vain for answers to these questions or even for a framing of their import. To consider such questions would be to admit that Christianity, and Catholicism, are not as universal as many people would like them to be. When the church comes to terms with that idea, maybe then we'll start seeing some intellectual progress.

Mr. Cowen is the author of the recently published "Create Your Own Economy: The Path to Prosperity in a Disordered World."

Globalization From Inside Out

By Jason Lim For all their dysfunctional partisanship, Korean politicians agree on one thing: they all love to speak about how Korea will successfully compete in a globalized world by leveraging its power as the foremost leader in technology. You can't blame them for their jubilance; after all, it's a great soundbite for the evening news. It reassures the people that Korea's economic miracle will continue uninterrupted while simultaneously reinforcing Korea's self-image as a technological powerhouse. What's not to like about it? The problem is that having the best-selling cell phone or manufacturing the latest state-of-the-art gadgets does not really translate into consistent success in a global environment. Remember Motorola? No? My point exactly. Therefore, if your standing as the IT leader of the world depends on the latest product of three or four of your country's representative companies, then you might want to revisit your national strategic planning document. No, the best way for any country to ensure its future success in a globalized world is to actively build and nurture core competencies into its national workforce that will propel the nation's future competitiveness in the 21st century. What are these 21st century workforce competencies? According to a Harvard Kennedy School globalization workshop presentation, they are: ``Analytic Aptitude," which is ``Understanding the beliefs, values, and practices of other cultures; ability to link one's own circumstances to those in other societies; ability to discern transnational transaction strategies and learn from past successes and failures." ``Emotional Intelligence," which is ``Intercultural empathy and the ability to manage multiple identities; openness to divergent cultural influences and experiences." ``Creative Ability," which is the ``Ability to see the synergistic potential of diverse perspectives; ability to envision multilateral, mutually acceptable alternatives; and ability to tap into diverse cultural sources for inspiration." ``Behavioral Agility," which is the ``Proficiency in and use of the counterpart's language; ability to discern different cultural messages (verbal and non-verbal); ability to overcome conflicts related to globalization/localization; and flexible ability to employ a range of transnationally accommodative organizational strategies and interaction paths." Even at a glance, it's pretty obvious what these core 21st-century workforce competencies have in common. They are all about the people. More specifically, they are all about the diverse people in your society. When we speak about diversity, we are conditioned to look at skin color in an affirmative action context. However, diversity is not affirmative action. Diversity is all about tapping into the creativity, innovation and productivity of people by including them in the process of discussion, planning and decision-making from the very start. The business case for diversity is easy to make. According to Byron Kunisawa, a respected diversity expert, diversity is all about ensuring that people's ``abilities are accessible and processes are inclusive so that they do not deliberately or inadvertently exclude anyone from fully participating ... as a result, decisions, new programs, as well as new processes, will be able to take advantage of a broader set of options, as well as reflect a multicultural perspective by those participating in their formulation." In a word, actionable diversity is all about inclusion and collaboration, which are the very factors behind technological evolutions like Web 2.0 that actively embrace inclusion and collaboration to create a collective intelligence that can overcome groupthink and individual cultural biases to make better decisions. This points out the inherent contradiction in Korea's claim as the leader in IT: Korea cannot be a leader in information technology because it's still not an inclusive, collaborative society that embraces the diversity of its citizens. Decision-making is a closed process dominated by ethnicity, sex, and background; in short, it's dominated by male ethnic Koreans who grew up in the wealthy areas of Seoul and went to one of the four top universities and probably spent some time in an Ivy League school in the United States. Such homogeneity might have served Korea well in its headlong drive toward economic sufficiency, but it will inevitably undermine Korea's future competitiveness through its socio-cultural nepotism and myopia. In short, for Korea to truly compete in a globalized world as an acknowledged leader in information technology, rather than just a self-proclaimed one, it must first become globalized from the inside out. Korea must invite the full spectrum of its society into public debate about policies that define its future direction. For the traditional decision-makers, this is understandably strange and even threatening. This fear manifests itself in attacks against the most vulnerable populations, including blatant racism against the native speaker teachers in Korea in an effort to marginalize them as a group and deny them a voice in the decision-making process of English teaching. This happens despite the fact that native speakers, as a group, undoubtedly have the depth of institutional expertise about teaching English to Korean children that, if actively tapped, would do wonders for Korea's insipid English education. The price of excluding them is painfully obvious and will be borne by Korea's children. However, overcoming this fear and embracing diversity is a vital part of transitioning the people of Korea to become the competent workforce of the 21st century. For Korea, this is not optional. Jason Lim is the managing editor of the Korea Policy Review published at the John F. Kennedy School of Government, Harvard University. He can be reached at jasonlim2000@gmail.com.

Trend to Watch: Globalization Under Fire

by Eric Beinhocker & Elizabeth Stephenson

Authors' note: Each week in July and August, we'll introduce a new trend you have to watch from our HBR article in the July-August special issue. We also invite you to comment on this trend and suggest what trends you think you have to watch.

Of all the trends we followed before the crisis, globalization seemed the most secure. Today, however, big and important question marks hang over some aspects of
global economic integration.

The past decade-and-a-half has witnessed a level of global integration unseen since before World War I (and arguably in history). Between the early 1990s and the current downturn, global GDP grew at robust rate--roughly 5% nominal GDP growth per year. Yet, trade flows grew nearly one-and-a-half times faster, while capital flows grew at twice the rate. The advent of viable undersea fiber networks in the late 1990s created the first real-time global data networks ever, unleashing a torrent of global information flows. In the last 2 decades, more than 200 free-trade treaties were signed, tariffs fell to unprecedented lows, and countries like China and India, after years of relative isolationism, engaged much more vigorously in the global economy.

In short, the world economy became fundamentally more interconnected and interdependent. The big question now is: Will the pendulum swing back?

In the current downturn, at least certain aspects of globalization have stalled. Trade flows, for example, are expected to fall at roughly four times the rate of global GDP in 2009; tariffs are rising; and immigration restrictions in certain countries are increasing. The crisis, which hit the US hard in the fall and in January, is having significant knock-on effects across the world--particularly in key sectors, such as manufacturing and mining.

Yet the data are not uniform. Although growth in the globalization of goods and services may stall for a period because international trade has declined along with demand, it is unlikely to reverse. There is little political appetite for further trade liberalization--for example, by completing the Doha round of negotiations--but a full frontal attack on liberal trade would threaten large numbers of jobs, raise prices for consumers, and endanger prospects for economic recovery.

While a populist backlash cannot be ruled out, the more likely outcome is increased protectionism on the margins and recovery of the global trading system as growth returns.

The US is busy restricting imports on French cheese (causing a major run on Roquefort in New York City's priciest neighborhoods), but South Korea just announced a new free trade treaty with the European Union this week. Information is flowing freely as ever, as usage of information and communications technologies continue to surge. Just witness Iran's Twitter uprising. The recent meeting of the G-20 emphasized a common commitment to open markets and free trade, but the policies of individual member nations are not so consistent.

The most pessimistic liken the pre-crisis period of global integration to that immediately preceding World War I, with the implicit proviso, "We all know how well that worked out." And the naysayers have their point: no doubt the biggest risk to the global economy is a major protectionist shut-down, and it would lead to no small measure of economic and geopolitical instability.

Admittedly, too, there are certain eerie similarities between the recent past and the early 20th century--dramatic growth in free trade, the emergence of neo-mercantilist tendencies (such as the under-the-radar agricultural land acquisitions going on in Africa by a whole suite of countries worried about food security), and of course, an exuberant belief in unfettered economic growth.

Yet, at the same time, there are key differences, not to mention innovations, which once unleashed are very hard to put back in the box--for example, the power of global communications networks that allow for instantaneous global flows of information. The telegraph is no comparison.

As for the globalization of talent, immigration will slow if governments tighten restrictions in response to popular concerns about job losses. Yet aging populations mean that many Western countries will eventually find themselves short of workers, and emerging markets will keep producing a growing share of the world's college graduates. Additionally, the relentless march of information and communications technology will enable the global distribution of knowledge work. Overall, we remain confident that the global market for managerial and technical talent will continue to grow.

Financial globalization is more vulnerable. Observers have legitimately argued that increased linkage among the world's markets allowed problems to cascade uncontrollably. We could see, as a worst case response, a return of capital controls (which prevent the allocation of resources to their most productive uses), an increase in inconsistent regulatory regimes, insular financial policies, and a regulatory environment that stifles innovation. Best case would be more transparency in the global financial system, greater regulatory and central bank coordination, and improved international approaches to risk management.

For now, strategists should stress-test their business models under different globalization scenarios--such as free and fair movement of goods and services, capital, and talent across borders; movement subject to uneven cross-border regulatory and tariff regimes; and the wild card of a return to widespread protectionism. The goal of such analysis is to uncover the circumstances under which the desirability of certain production locations might "flip" because of tariffs, the value of overseas business units might fall given capital constraints, or the ability to carry out core activities--either at home or abroad-might diminish as a result of restrictions on the movement of people.

Perhaps the most important point in all of this: it is in the economic interest of no one to reverse global integration. Protectionist backlash will slow recovery, increase prices, and drive unemployment. Yet, as history has shown, it is not beyond human ingenuity--or political process--to do, with all the best intentions, what is in the economic interest of no one.

The verdict: This trend is categorized as decelerating.

Manufacturing, Missing Cornerstone for US Middle Class.

Are Manufacturers Also Too Big to Fail?

Peter Wynn Thompson for The New York Times

Douglas Bartlett recently closed his printed circuit board factory, Bartlett Manufacturing Company in Cary, Ill., because the property taxes were no longer affordable.
If the Obama administration has a strategy for reviving manufacturing, Douglas Bartlett would like to know what it is.
Buffeted by foreign competition, Mr. Bartlett recently closed his printed circuit board factory, founded 57 years ago by his father, and laid off the remaining 87 workers. Last week, he auctioned off the machinery, and soon he will raze the factory itself in Cary, Ill.
“The property taxes are no longer affordable,” Mr. Bartlett said glumly, “so I am going to tear down the building and sit on the land, and hopefully sell it after the recession when land prices hopefully rise.”
Though manufacturing has long been in decline, the loss of factory jobs has been especially brutal of late, with nearly two million disappearing since the recession began in December 2007. Even a few chief executives, heading companies that have shifted plenty of production abroad, are beginning to express alarm.
“We must make a serious commitment to manufacturing and exports. This is a national imperative,” Jeffrey R. Immelt, chairman and chief executive of General Electric, said in a speech last month, while acknowledging that G.E. was enriched by its overseas operations too.
President Obama, agreeing in effect, has declared, “The fight for American manufacturing is the fight for America’s future.”
The United States ranks behind every industrial nation except France in the percentage of overall economic activity devoted to manufacturing — 13.9 percent, the World Bank reports, down 4 percentage points in a decade. The 19-month-old recession has contributed noticeably to this decline. Industrial production has fallen 17.3 percent, the sharpest drop during a recession since the 1930s.
So far, however, Mr. Obama’s administration has not come up with a formal plan to address the rapid decline. Instead, it has pursued ad hoc initiatives — bailing out General Motors and Chrysler, for example, and pushing green energy by supporting the manufacture of items like wind turbines and solar panels.
“We want to make sure that we grow a manufacturing base for renewable energy,” said Matthew Rogers, a senior adviser in the Energy Department, explaining that this is being accomplished in part by “accelerating loan guarantees from zero” in the Bush years.
Xunming Deng, a physicist and the chairman of the Xunlight Corporation, sees himself as a beneficiary of what he describes as the Obama administration’s more flexible loan guarantees. His factory in Toledo, Ohio, with 100 employees, is in the early stages of making solar panels, and Dr. Deng is already planning to quadruple the plant’s size. He has applied to the Energy Department for a $120 million loan guarantee. If he gets it, he will not have to pay the hefty fees charged for loan guarantees before Mr. Obama took office.
“Getting rid of that fee makes the loan guarantee very attractive and very helpful,” Dr. Deng said. “We can’t grow as fast without it.”
Beyond energy, the administration’s approach gradually outlines the elements of a manufacturing policy — what Lawrence H. Summers, director of the National Economic Council, described as “a number of things to support manufacturing.”
The auto bailout, for all its improvisations, served notice that the administration would probably rescue any giant manufacturer it deemed too big (or too iconic) to fail, and would help the suppliers of failing giants transition to other industries.
The Buy America clause in the stimulus package pointedly favors the purchase of American-made goods for infrastructure projects. The Commerce Department is adding $100 million, more than double the current outlay, to a program that helps American manufacturers operate more effectively. And trade agreements negotiated by the Bush administration — agreements that would make the United States more open to imported manufactured goods — have been allowed to languish in Congress.
“The administration’s policy is evolving in the right direction,” said Representative Sander M. Levin, Democrat of Michigan, who is particularly concerned about auto imports. “I think they have essentially shed the political chains that prevented government from having a role in manufacturing. They are working their way toward what makes sense.”
Not everyone agrees.
“Bush and Obama,” Mr. Bartlett said scornfully, “one is as bad as the other in terms of manufacturing policy.”
He acknowledged that the recession was the immediate reason for the demise of his family’s business. But what really did it in, he said in an interview, was the competition from less expensive Chinese circuit boards — less expensive, he argued, because the Chinese undervalue their currency and this administration, like the ones before it, lets them get away with it.
“Our orders went from $8 million at an annual rate to $4 million, which was not enough to make money,” he said.
Mr. Bartlett, who is co-chairman of an organization called the Fair Currency Coalition, said that Chinese competitors charged only $1 for each printed circuit board sold in this country, while he charged $1.40. Like many economists and government officials, he says he believes the Chinese currency is artificially undervalued. As a countermeasure, he said the Obama administration should impose a 40 percent tariff on imported Chinese goods.
“I can compete against Chinese entrepreneurs, and Chinese labor cost is not that big a factor,” he said, “but I cannot compete against the Chinese government’s manufacturing policies.”
Manufacturing has long been viewed as an essential pillar of a powerful economy. It generates millions of well-paid jobs for those with only a high school education, a huge segment of the population. No other sector contributes more to the nation’s overall productivity, economists say. And as manufacturing weakens, the country becomes ever more dependent on imports of merchandise, computers, machinery and the like — running up a trade deficit that in time could undermine the dollar and the nation’s capacity to sustain so many imports.
One tactic for strengthening the manufacturing sector, in the administration’s view, would be a shift in tax policy. The research and development tax credit, which is now subject to renewal by Congress, would be made permanent, encouraging much more R.& D. among manufacturers, a senior Commerce Department official argued. And foreign taxes paid on profits earned overseas would not be deductible in this country until the profits were repatriated, a restriction that might discourage locating factories abroad.
The goal is to arrest manufacturing’s dizzying decline. It “was the pillar on which we built the middle class,” said Thea Lee, policy director for the A.F.L.-C.I.O., “and it is hard to see how you rebuild the middle class without reviving manufacturing.”