human japan good foreign development developing poor asia his oecd between china through growth social poverty other africa should countries markets financial years new does globalization trade country billion www much government global time now how can people change east europe investment international world asian economy economic crisis state economies
|Globalization – origin of the word?|
|Wednesday, 21 July 2010 01:19|
Who was the first person to utter or imagine this terrible word? Was it, as legend would have us believe, Theodore Levitt, the Harvard Business School marketing professor who in 1983 penned an article for the Harvard Business Review entitled “The Globalization of Markets”?
We will never really know who invented the word “globalization”. The word could have rolled off anyone’s lips. It is a word that constructs itself naturally in the English language by combining the word “global” with the standard suffix “ization”. It obviously must mean “to become global”, “to make global” or something along these lines.
According to the Oxford dictionary, the word globalization was first employed in the 1930. It entered the Merriam-Webster dictionary in 1951. It was widely used by economists and social scientists by the 1960s. Marshall McLuhan, a Canadian who analyzed the impact of mass media on society, coined the term “global village” in 1962.
Following the fall of the Berlin Wall, and the end of the Cold War, globalization became a buzzword as we seemed to have become one world, one planet or one globe! The word globalization was ready to become a buzzword because it was already popularized by Ted Levitt’s powerful thinking which is still studied and talked about today – to such an extent that many truly believe that he invented the word. But unfortunately, globalization also became a lightening rod for anyone who was unhappy about something.
Quite clearly, anything can be globalized. The word most usually applies to the economy when different national economies become integrated (become one) through flows of goods and services, capital and labour – in other words, a global market. But the word globalization can apply to global culture, global society, global community, global ideas, global beliefs, and so on.
Everyone has their own definition of globalization. Here are a few:
. “the act of globalizing“; from the noun “global“ meaning “pertaining to or involving the whole world“, “worldwide“; “universal“ -- Oxford English Dictionary.
. the process by which the whole world becomes a single market. This means that goods and services, capital, and labour are traded on a worldwide basis, and information and the results of research flow readily between countries – Oxford Dictionary of Economics.
. the present worldwide drive toward a globalized economic system dominated by supranational corporate trade and banking institutions that are not accountable to democratic processes or national governments“ -- International Forum on Globalization.
. a historical stage of accelerated expansion of market capitalism, like the one experienced in the 19th century with the industrial revolution. It is a fundamental transformation in societies because of the recent technological revolution which has led to a recombining of the economic and social forces on a new territorial dimension -- World Trade Organization (WTO) Director-General, Pascal Lamy
. the growing integration of economies and societies around the world... -- The World Bank.
. generally refers to an increasing interaction across national boundaries that affects many aspects of life: economic, social, cultural and political -- United Nations Poverty and Development Division.
. Globalization, or the increased interconnectedness and interdependence of people and countries, is generally understood to include two interrelated elements: the opening of borders to increasingly fast flows of goods, services, finance, people and ideas across international borders; and the changes in institutional and policy regimes at the international and national levels that facilitate or promote such flows -- World Health Organization.
. the process by which the experience of everyday life, marked by the diffusion of commodities and ideas, is becoming standardized around the world – Encyclopedia Britannica.
. a process by which regional economies, societies, and cultures have become integrated through a global network of communication, transportation, and trade -- Wikipedia.
Let’s come back to Levitt and assess his contribution. What were his main arguments?
“Two vectors shape the world – technology and globalization. … Regardless of how much preferences evolve and diverge, they also gradually converge and form markets where economies of scale lead to reduction of costs and prices.”
“A powerful force drives the world toward a converging commonality, and that force is technology. … Almost everyone everywhere wants all the things they have heard about, seen, or experienced via the new technologies.”
“The global corporation operates with resolute constancy – at low relative cost – as if the entire world (or major regions of it) were a single entity; it sells the same things in the same way everywhere. … (It) contrasts powerfully with the aging multinational corporation. … (it) accepts for better or for worse that technology drives consumers relentlessly toward the same common goals – alleviation of life’s burdens and the expansion of discretionary time and spending power.”
“Cosmopolitanism is no longer the monopoly of the intellectual and leisure classes; it is becoming the established property and defining characteristic of all sectors everywhere in the world.”
“The earth is flat … What is striking today are the underlying similarities of what is happening now … (they) form an overwhelming, predominant commonality everywhere.”
Japanese companies “have discovered the one great thing that all markets have in common – an overwhelming desire for dependable, world-standard modernity in all things, at aggressively low prices.”
“Almost everyone everywhere wants all the same things they have heard about, seen, or experienced via the new technologies. … If a company forces costs and prices down, and pushes quality and reliability up – while maintaining reasonable concern for suitability – customers will prefer its world-standardized products.”
“So-called ethnic markets are a good example. Chinese food, pita bread, country and western music, pizza and jazz are everywhere. They are market segments that exist in worldwide proportions. They don’t deny or contradict global homogenization but confirm it.”
Read through these Levitt quotes again and please remember that this text is almost 30 years old. He spoke of technology and globalization well before the Internet arrived and way before anyone imagined the end of the Cold War or the dynamism of China. He distinguished the global corporation from the multinational corporation more than 20 years before IBM’s Sam Palmisano repeated the same act. He said that the “world is flat” more than 20 years before Tom Friedman did the same thing. And so it goes on.
Ted Levitt may not have invented the word “globalization”. But his contribution to inventing and popularizing the concept was path-breaking.
Levitt, Theodore, The globalization of markets. Harvard Business Review, May-June 1983.
Palmisano, Samuel J., The Globally Integrated Enterprise. Foreign Affairs, Volume 85, No.3. 2006
Friedman, Thomas L., The World Is Flat. A Brief History of the Twenty-First Century