The era of globalization is a symbol of lucrative opportunities and welfare of humanity. This unique era gives a chance for improvement of the living standards and innovations in technology. Once considered to be a dream, this “New Economic World Order” is a reality we face nowadays. It alters the lives of millions of people notwithstanding the fact whether they want it or not, bringing unexpected changes and therefore constant development to our society. In 1980s the term “Globalization” became one of the indispensable parts in the concept for achieving global economic prosperity, by way of integration of highly developed and developing and least developing countries. In fact, the essence of globalization idea is to create and share the benefits of the process of globalization at the same time reducing the costs. Globalization implies the strategy of the world-wide contributions for the sake of substantial global growth in various economic spheres, regardless of the territory and boundaries. Economic globalization touches on such important issues as technology, investments, trade and finance. It is an economic phenomenon that influences society, culture and, without any doubts, the politics. In 1776 Adam Smith in the “Wealth of Nations” stated that the countries all over the globe could benefit from “an extensive commerce from all countries to all countries”, actually implying globalization and liberalization of global trade.


One of the economic trends of Globalization is the free movement of the capital and industry across the world boundaries. In order to cut costs for the production, multinational Corporations hire low-paid workers and create new effective markets for the produced goods or services. This liberal movement of people, ideas, services and goods helps in the integration of economies of various countries into a global one and influences the life of ordinary people. For example, life expectancy of people in the most of Indian Provinces increased by more than 20 years, and Korea witnessed almost complete liquidation of illiteracy. This progress is a vivid example that the globalization concept has an amazing potential.

Over the past 50 years, the increased trade between different nations helped 3 billion people to become a middle class lifting them out of poverty. Reduction of the trade barriers creates a unique opportunity for the nations to develop international trade. There’s no doubt that international trade and investment remain main reasons for the world economic growth since 1960. Over the last couple of decades, the process of reducing world’s tariff barriers increased the amount of international trade by sixteen times compared to those of 1960. Companies of different sizes dealing in various types of commodities, including the small firms which constitute from ten to twenty-five per cent of exports every year. Developing countries which lowered the tariffs, strengthened and at the same time simplified trade regulations, experienced successes in employment of people and the growth in national income, because the changes required capital and labor to shift from the Import industries to the absolutely profitable Export ones. It is necessary to point out that the Companies, setting up their business in the developing countries, offer higher wages and more favorable working conditions. This becomes obvious while taking into consideration the fact that the wages in developing countries are lower than wages in developed ones. In many parts of the world these changes redirected the use of labor from the labor intensive industries to the modern knowledge intensive ones. Over the last 20 years, footwear and textile industries moved to the countries where labor is cheaper and this actually helps the economies of these poor countries to maintain positive trends in their development. All these measures strive for the protection of footwear and textile industries in the developed countries against the decline and at the same time significantly cut costs. ( e.g. To make a typical jacket worth 200 $ USD in El Salvador an employer pays worker less than 1 per cent of the jacket cost, but for the same type of jacket produced in USA a worker will get about ten per cent of its price.).

But the difficulties and the obstacles for the prosperous economic development still exist. The imperfection of the domestic and international trade regulations, laws on labor and environment and violations of the workers rights by the Company owners are some of the negative features of the same process called globalization. However, it’s also remaining a part of economic development. The brightest example is a quotation of Steve Wilhelm, who wrote in “Puget Sound Business Journal” that humble people experience all the consequences of the globalization impacts. He noted that “as production and consumption grow around the world, many impacts fall on the people who supply labor to produce things, and the environment that supplies the raw materials and absorbs the effluent.” In developing countries Employees have to work 12 hours a day and they sometimes do not have any health or labor protection. They are absolutely insecure at their working places. The main concern of the globalization is business not workers, because the protection of the Intellectual property and the absolute rights of the investor goes above all. Unfortunately, concerns over the business issues create a tremendous gap between rich and poor. I do think so, because the benefits from elimination of the trade barriers, creation of favorable conditions for investments and privatization aren’t evenly distributed. Some other problematic issues include the following ones. In some developing countries the use of child labor and the labor of the prisoners remains a hot issue for the anti-globalization activists and human rights organizations. It’s not a secret to anymore that the increased amounts of a country’s budget spent for the sake of industrial growth result harmful social cuts and therefore various serious health diseases. More funds spent for industrial needs create the decrease in the sphere of education as well. The industry is relentless towards the ordinary workers as the owners move the factories to developing countries in order to increase earnings. That’s why the workers are often fired and the unemployment levels in the nations rise significantly.

To solve these nagging problems nations should find a solution regarding the rational management of a global economy both nationally (via the governmental prompt actions) and internationally (via the World Trade Organization activities, which regulate the issue of the trade agreements and, of course, through well-thought policies of the International Monetary Fund (IMF), which provides loans and other technical support to developing countries across the globe). The political solution includes introduction of reforms by the national government and international institutions in the spheres of environment and labor regulations, financial markets and market niche access, privatization and creation of the set of strategic policies in order to increase economic growth and equitability in distribution of the globalization benefits. The reforms must give more strength to the international trade laws at the same time reforming economic infrastructure and supporting institutions of the national market.

Active development of economies, caused by the globalization process, stimulated the rise of various types of one-of-a–kind technology and know-how. An immense competition in the Global Markets, the need to cut costs for the production of goods and services in order to obtain more profits and the necessity of re-equipment of the labor-intensive industries with more sophisticated modern technology were the main reasons for the creation of technological innovations. In many respects thanks to the up-to-date technologies implemented in the countries globally, the flow of capital and industry resulted increase of the income and helped living standards in many corners of the world to reach new miraculous levels. Thus, for the last half a century, this bright global technological breakthrough in various spheres of technology favored integration processes world-wide. Talking about global technological development it’s necessary to point out that the brightest example could be the actual revolution in the sphere of communication. Communication is the key factor in the existence of human beings. Over the past 20 years, the communication sector developed rapidly, creating incredible forms of sharing bright ideas and valuable information, bringing knowledge to the global level. New technologies ensure circulation of information which creates the global culture. With a simple mouse click we break down barriers between nations and jump national borders.

Advanced technologies in the sphere of telecommunications and emergence of the Internet increased the exchange and processing of information and actually led to more understanding of various cultures around the globe.

And it’s important to mention that the costs for the use of telecommunications and necessary computing reduced up to ninety-nine per cent since the year of 1970. For many ordinary people these innovations are the only access to knowledge, goods and services – a unique opportunity they never thought of before. Technological advances increase the quality of services and goods; favor the trade between the nations towards global integration. Thousands of Internet cafes provide the access at affordable prices all over the word connecting relatives and friends globally. They provide interactive services – the active form of communication activities. The Internet greatly influenced various Industries (e. g. the sphere of tourism, boosting its development, providing high-quality services to any customer). Communication infrastructure, mobile telephony and digital networks have become key factors in global economic growth. In 2005 the third of the annual growth of the United States was produced by the Companies dealing in the sphere of Information and Information technologies.

Globalization received a new drive from the Internet as the Internalization the Net brought more potential in terms of trade benefits. Commercialization possibility of the Net attracted attention of multinational Companies. Nowadays, they do use The Net of networks for marketing, promotion and ordering of their goods and services. The use of the Internet by the Companies or the so-called E-business became an extremely popular way of earning money. E-business is actually buying and selling of goods and services over the Internet done by individuals, various types of organizations and businesses.

In the year of 2005 more than 95 per cent of the entire E-commerce realized in the developed countries and only 4, 5 per cent was contribution of the developing countries. Nevertheless the trends in global communicational development show that business to business E-commerce will grow substantially in developing countries up to 6 per cent in 2006.

As you can see from the table #1, revolutionary technology in the sector of communication altered the way businesses realized their trade relations and brought new effective methods of cooperation and partnership.





Table № 1.

table



However, as the digital networks of all sizes change our lives at work or during the leisure time, people and culture world-wide depend on the functionality of the system and on the whole its integrity and security. It is necessary to mention that history had vivid examples showing the vulnerability of the networks, namely: the hacker attacks on Commercial websites in February 2000, which caused the denial of services to thousands of consumers. In 1990 the US witnessed failures at the AT&T systems of switches. Earlier in 1980 there was a break down and real collapse of the network called ARPAnet. To crown it all the network architecture remains open and more decentralized. Thus the network becomes insecure and vulnerable to the attacks of hackers and viruses. National governments and international institutions will have to manage and coordinate a new set of policies along with technological improvements to eliminate the threat of insecurity and the absence of protection. Digital signatures and encryption of the information transferred could become very useful additions for realization and implementation of the new legal acts towards the protection of the network user. To protect the infrastructure and avoid disasters should be main concerns of national governments, law enforcement bodies and legal experts. The collapse in a form of a domino effect regardless of borders and territory must never happen out of the insecurity and imperfection of law.

The other negative feature of the “Communication Revolution” is Digital Divide – or the gap between people having access to networks and advanced technology and the people that don’t even realize what it means to have it. Information age requires the availability of access to the existing networks, mobile telephony and circulation of information. It urges governments and international bodies to act. However, I think digital divide will remain the key issue in the policy of the 21st century and even now drastic measures should be taken to shift national policy choices towards human needs.


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