What is Global?

Global, or as it is named in Turkish "küresel", technically refers to wholeness and generalization and means events affecting the entire world in a social sense. Factors within the scope of global events are events that are experienced in one region and show their impact globally. For example, although the war between Russia and Ukraine is taking place in that region, its effects are manifested worldwide in both political and economic terms. As the connections between states and people strengthen, communication between countries also accelerates. In today's world, where the planet has become a vast network, we can say that we are living in a global era.

What is Globalization?

With the internet taking a central place in our lives, it has become easier to acquire information about the world. Globalization, or as translated in Turkish "küreselleşme", is the phenomenon of events, ideas, cultures, and all current information spreading simultaneously around the world. The communication of every conceivable activity in the world, made possible through a network of people from many countries, is linked to globalization.

While globalization can be good in many aspects, it can also have dangerous sides. The rapid global attention to good ideas, interesting cultures, and noteworthy events can be wonderful, yet bad ideas, misunderstandings, and distorted events can also spread quickly. In the globalized world we refer to, where people are aware of each other within a single network, it is crucial to use globalization positively.

When Did Globalization Begin?

It is very difficult to pinpoint a specific time for when globalization began. Some claim that globalization is as old as human history and indicate humanity's civilizational efforts as its starting point. Others point to the beginning of the modern era, while some show the mid-1800s, and a portion cite the late 1950s or the 1970s.

The 1970s can be seen as a turning point for globalization. With the collapse of the Bretton Woods System in August 1971, the fixed exchange rate system was abandoned, and developed countries immediately lifted restrictions on capital movements. The lifting of capital movement restrictions in these countries granted extraordinary momentum to financial globalization. Following the OPEC oil price shocks, the increasing flow of 'petrodollars' to European markets and the economic stagnation manifesting from 1974 onwards in developed Western countries led to a large influx of petrodollar funds into the markets of developing countries. Alongside economic stagnation, capital with declining returns turned towards the markets of developing countries, which offered relatively higher returns, resulting in significant petrodollar fund flows to these markets. Furthermore, until the 1970s, American-origin transnational companies accounted for nearly half of world production; from the 1970s onwards, other developed countries and Japan, along with some Latin American countries, began to compete with the US. In particular, German and Japanese firms caught up with the efficiency line of American companies and became serious competitors of these firms in international markets. All these developments prepared the ground for an increase in global trade volume and competition, consequently facilitating the globalization of production.

Beginning in the early 1980s, developing countries also joined the liberalization adventure, and concepts such as privatization, market economy, financial deregulation, and integration with the world began to gain much greater popularity than before in many developing countries. All these developments further brought together developed and developing countries. On the other hand, the activities of firms concentrated in the industrial sector, rapid market changes, and astonishing advancements in product and production technologies, along with the intensification of competition, made globalization much more evident in the 1980s.
The process peaked in the early 1990s with the economic and political collapse of the former Eastern Bloc countries. These countries, which had planned economies, gradually began to align themselves economically and politically with Western countries. The communist system that had long maintained its dominance gave way to a system based on democracy and a market economy.

Additionally, the Uruguay Round, which took place on December 15, 1993, with the participation of 117 countries and is dubbed the most comprehensive trade agreement in history, is one of the most significant developments in economic globalization. Starting with the meeting of Trade Ministers in Punta del Este, Uruguay in 1986 and sustained intense negotiations lasting seven years, this was concluded in 1993 and brought into effect with the signing of the Final Act in Morocco on April 15, 1994. The Final Act not only ensured liberalization in global trade but also facilitated the implementation of many multilateral principles and rules in various fields, such as the elimination of export subsidies, anti-dumping measures, removal of technical barriers to trade, and protective measures.

The establishment of the World Trade Organization (WTO) to ensure the application of these outcomes is a significant development in terms of economic globalization. Another important development in economic globalization is the Multilateral Investment Agreement (MAI). According to this agreement, any company operating internationally can operate in a country as if it were a company of that particular nation, provided that country has ratified the agreement.

In summary; the globalization process, which exhibited a trend of growth until World War I, showed a decline between 1914-1945 and again entered an upward trend after the Second World War. From the 1980s onwards, this process accelerated even further and peaked in the 1990s.

What are the Benefits of Globalization?

● It becomes significant in combating inflation and helps the economy by facilitating the entry of imported goods.
● It enables consumers to access cheaper and higher-quality imported products, as well as more affordably priced and better domestic products.
● Globalization promotes technological development.
● It expands international trade opportunities (goods and services). It develops relationships between countries across different continents.

The Importance of Globalization for Companies

While globalization opens a significant door for companies to showcase themselves in large markets, it has also increased risks along with the factor of competition. With the removal of trade barriers and the globalization of markets, companies have reached hundreds of thousands of customers with different behaviors, requiring different strategies and planning for different cultures. In a world where geographical, economic, political, and sociocultural differences affect shopping and business behaviors, the merging of sales networks has necessitated sellers to take on new roles. The increased global nature of international operations has also brought the need for much more careful management. The impacts of globalization and its significance for companies can be outlined as follows:

Economic Factors: The fact that globalization increases economic activities and creates a wider profit margin with large markets for businesses is an undeniable fact. In the global world, there are also some challenges that currency fluctuations, advanced technologies, and political barriers pose for companies. When countries that do not progress financially trade with each other, only one may benefit, while the other may always end up in debt. Additionally, it can be observed that political tensions also complicate the economic activities of companies engaged in foreign trade.

Political Factors: Political developments and government incentives also have great benefits for positioning in the global world. Government policies, which are a kind of roadmap for businesses, are crucial for opening up to foreign trade. Furthermore, it is essential to act cautiously according to the regulations, rules, and policies of the country where trade is conducted, and to behave in accordance with the cultural and moral beliefs of customers in different focus countries is also one of the important points. With globalization, the entire world can be affected politically at the same time.

Technological Factors: Technology, when advancing in one place, can reach the other end of the world the very next day. This rapid diffusion and communication enable countries to grow rapidly while companies can enhance their performance by integrating relevant technologies. In this time when cross-border relations are facilitated further by the internet, companies have greatly increased their opportunities for business with customers and potential partners.

What are the Problems Arising from Globalization?

Income Distribution

One of our issues is the differences in income distribution between developed and developing countries, which have deepened with the process of globalization and has been on the agenda of the world economy for a long time. "Some newly industrializing countries" (for example, China, India, Brazil, and Turkey) are among the winners of the globalization process. While the welfare levels in developed countries increase, many developing nations are unable to escape the quagmire of underdevelopment.

Population Explosion

The rate of population growth varies across continents. At the start of the 21st century, 60% of the world's population lives in Asia, 14% in Africa, 12% in Europe, 9% in Latin America, and 5% in North America. It is predicted that Africa's share of the world population will double, and Asia's will increase by 1.5 times; however, only a small increase in population is predicted for North and Latin America. Conversely, Europe's share of the population is expected to drop to around 7%.

In addition to these developments, the tremendous advances in healthcare and the widespread availability of health services have accelerated the aging of societies, especially in Europe and Japan. For instance, it is expected that the average age of Germany's population will be 65 in the coming decades.

Not only for economic reasons but also due to civil wars and religious conflicts, we see that people are forced to migrate. Those seeking refuge in our country from Syria can be an example of this. The streets of European countries are filled with refugees coming illegally from Africa and the Far East. The UK government plans to limit the number of EU citizens coming from Central and Eastern European countries.

If no measures are taken against refugees from underdeveloped countries, restrictive measures may be imposed on the free movement of labor within the EU. Each member state may conduct border controls and prevent foreigners from entering their countries for their own security.

Climate Change, Destruction of Nature, and Environmental Pollution

The primary goal of all countries is faster growth and more production and consumption. The process of industrialization is rapidly expanding from core countries to peripheral countries. The most adverse effect of this expansion, however, is the climate change and global warming we have observed in recent years. There are two significant impacts being debated: First, the melting of glacial areas on earth that were previously inhospitable to human settlement. The second is that the melting of the ice in the polar regions leads to rising ocean levels and consequently causes flooding disasters. It is impossible for humans to prevent natural disasters like earthquakes and volcanic eruptions. However, it is certain that human factors play a decisive role in global warming.

The carbon dioxide and methane gases released from the consumption of oil, natural gas, and coal contribute significantly to global warming, as do the gaps created in the atmosphere and the destruction of forests. This issue requires global-level intervention and collective action, in addition to the measures that countries will take individually.

Consequences of Globalization in Technological and Economic Fields

Recent technological developments in all fields have accelerated the process of globalization and have significantly impacted our lives. In 1991, without fully realizing the potential reach of the "National Science Foundation's" results and power, the internet was privatized. The internet has made great contributions to increasing productivity, allowing people and businesses to reach beyond national borders, fostering the emergence of an international intellectual community, and integrating international markets.

Advancements in air travel and communication technology have shortened the distances between countries. People can fly to New York for a meeting in the morning and return to Istanbul the next day. Today, we can instantaneously follow developments from hundreds of TV channels in the most remote corners of the world, as well as daily newspapers and magazines. Thanks to mobile phones, millions of people can communicate across countries and continents. We can instantly access all kinds of information and scientific resources. It is impossible to halt developments in communication technology; it has become a part of our lives.

However, it is also worth recalling the negative aspects of this development: Recently emerging international listening events, disinformation flows, propaganda and ideology-driven manipulation operations, the deletion or alteration of information. Additionally, the control of visual and written media by a few private companies in different countries has led to oligopolization. Beyond all this, individuals’ private lives can be monitored, and conversations can be listened to at any time and in any place. Illegal interventions via information technology into individual freedoms and terrorist activities will be among the most pressing issues in the coming years.

What are Examples of Globalization?

While globalization may seem like a new term, it is actually an ongoing phenomenon that has persisted for years. One of the oldest examples can be illustrated by the Olympic Games. The Olympic Games began as a regional competition in ancient Greece. Today, dozens of countries from all over the world come together to compete in several sports, continuing the tradition of the Olympic Games.

We can also provide more general and detailed examples. One of the biggest and most impactful events in the world was the Industrial Revolution, which started in the 18th century in Great Britain with the production of the first steam engine. Today, we can say there is no field of science or business where the industrial sector is not utilized. The primary reason for this can be attributed to globalization. Rapid enrichment and a reduced need for labor were observed following the Industrial Revolution. As the duration of doing business shortened and machines started to perform many tasks more flawlessly, England began to advance and technologically outperform other countries. In response, other countries wanted to share in this revolution. Now, 300 years after the Industrial Revolution, the industrial sector has become one of the most critical sectors worldwide. The impact of globalization and the interconnection of world events can be seen as evidence that the world has evolved into a vast communication network.

What are the Effects of Globalization?

Globalization can sometimes become a dangerous concept. While providing numerous benefits to the world and offering vast advantages due to its breadth of communication, it can also lead to cultural assimilation and a loss of identity. Thus, governments and individuals need to be mindful of globalization. It is not to say that recognition and incorporation of cultures are intended, but rather, understanding the world and appreciating other people and nations is one of the best things globalization has contributed to the world.

As for its effects on companies, except for political, economic, and technological barriers, it is generally positive in every sense. The incredible opportunities of globalization provide companies the possibility to establish themselves and expand their customer networks in large markets.