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Key Factors & Driving Forces of Globalisation

The key factors & driving forces of Globalisation includes Economic, Political and Technological factors, the establishment of WTO, emergence and growth of regional integration, the decline in trade barriers, the decline in investment barriers, technological changes, increase in FDI and growth of MNC’s.

As per V K Bhalla and S. Shiva Ramu the major drivers & factors of Globalization are –

1. Economic driving forces of globalisation

One of the main driving forces of globalisation is economic development.

  • Establishment of a new monetary system, the Bretton woods system in 1940
  • Establishment of GATT in 1947
  • Establishment of CMEA by Soviet Union in 1949-91
  • Major currencies become convertible in 1958 to 64
  • Establishment of OPEC in 1960
  • Development of EuroDollar Market (International Liquidity)
  • GATT 6th round at Kennedy
  • Elimination of last customs duties within EC in 1968
  • GATT Tokyo round 1973-79
  • Rise of Asian newly developed  or industrialised countries
  • China’s economic reform in 1978-80
  • Indian Economic Reforms in 1991
  • Establishment of NAFTA in 1994
  • Asian Financial Crisis in 1997
  • Establishment of WTO 1995
  • Uruguay Round in 1986-94
  • Adoption of Euro by 11 european countries in 1999
  • Dotcom crisis 2001
  • China Joins WTO in 2001

2. Political forces of globalisation

Political driving forces plays crucial role in the globalisation or internationalization of businesses.

  • Establishment of United Nations in 1945
  • Start of a European Recovery Programme, the Marshall Plan in 1948-57
  • China Becomes a socialist republic in 1949
  • Korean war in 1950-53
  • Suez Crisis 1956
  • Decolonization in Africa 1958 to 62
  • Yom Kippur War helps to trigger oil price hike 1973
  • EU enlargement to 9 members in 1973 and then to 12
  • Fall of Berlin Wall 1989
  • Dissolution of soviet union to form 13 independent states in 1991
  • EU enlargement to 27 members

3. Technological Forces

Recent technological developments including but not limited to computer, mobile phones, internet, aviation, wireless communication and other innovations helped to bring the world closer and together.

  • Expansion of Plastics and fibre products in 1940
  • Discovery of large oil fields in middle east (Saudi Arabia) in 1948
  • Increased use of oil in Europe and Japan
  • Toyota implemented JIT
  • Increased use of Jet Engines in air transport1957-72
  • Commercialization of Integrated circuits in 1961
  • 1960s onwards: Green Revolution
  • High speed train in Japan 1964
  • Mont Blanc Road Tunnel 1965
  • First single chip microprocessor Intel 4004in 1971
  • First PC by IBM in 1981
  • Microsoft Windows in 1985
  • invention of www (World Wide Web) by Tim Berners Lee 1989
  • First Website 1991
  • Number of Internet users rises to 300 million by 2000 and 500 million in 2005
  • Eurotunnel opens 1994
  • Launch and use 2G network (GSM) and increase in no. mobiles 1991
  • First person on Moon Neil Armstrong 1969

This is all about important and key driving forces and factors of Globalisation.

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