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Key Factors & Driving Forces of Globalization

The key driving forces of Globalization 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 or factors of Globalization are –

1. Economic driving forces of globalization

One of the main driving forces of globalization 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 globalization

Political driving forces plays crucial role in the globalization 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

Fist 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 Globalization.