Globalisation

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Globalisation
2
Perspectives on Globalisation

• Cultural
• Political
• Economic

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Cultural

• A bi-product of economic globalisation?
• Uni-linear flows?
• Television
• Cinema
• Music
• Publishing

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Television

• CNN International reaches nearly 150 million
  television households in 212 countries and
  territories - more viewers than all other cable
  news services combined.
• Baywatch is distributed to 140 countries on six
  continents and translated into 33 languages. It
  has an estimated viewership of one billion
  worldwide.

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Television

• Neighbours - attracts a global audience of more
  than 120 million viewers each day, consistently
  ranking as a top-ten favourite. Neighbours has
  now been sold to over 40 broadcasters and
  screened in over 60 countries worldwide from
  Australia to Zimbabwe. Recent new territories
  taking the show include Croatia and China.

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The Global Economy

• Recent discussion of the world economy has so
  emphasised the complete globalisation of economic
  relations that there is little questioning of the
  existence of a truly global economy.
• The idea of a global economy key image is that
  of a borderless world. I.e. stress on
  increasing transnational macroeconomic links
  amongst the triad economies (US, EU and Pacific
  Rim).

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The Global Economy

• Recent developments
• cheap, powerful computing communications
• falling barriers to FDI and capital raising
• global spread of a consumerist ideologies
• Do these turn large companies into world players?

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The Global Economy

• Concept of global companies (TNCs) differ from
  older concept of the multinational (MNC).
• MNCs - dominant parent companies and their
  foreign offspring fighting competitors in
  overseas markets.
• But MNC remained national in terms of key
  aspects of its functioning and governance.
• TNCs, by contrast have broken free of the bounds
  of nationality.

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The Global Economy

• TNCs are still rare
• Nonetheless many organisations adopting a global
  rationale in management and marketing
• Stress on strategic networking where coordination
  of a single face is achieved by independent
  companies working together.

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The globalisation of trade

• Expanding trade in manufactured and
  semi-manufactured goods among OECD members - a
  clear indictor of the progress of global economy
  integration?

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The globalisation of trade

• 1950 1975 volume of world trade expands by 500
  against an increase in global output (same
  period) of 220. Western OECD members account for
  80 of this trade by the 1990s.
• 1970s sees NICs (Hong Kong, Taiwan and S. Korea)
  raise manufactures exports from 35 to 59 of
  GNP.
• 1963 1981 looking a t the Third World, the
  volume of manufactures exports doubled from 27
  to 47.

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The globalisation of trade

• These figures subsume a critical fact of global
  economy life - a drift from domestic sourcing of
  production to the widespread use of non-domestic
  outsourcing as a means of reducing costs
• Not only material goods but services and human
  skills as well.

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The globalisation of production

• Classic dependency theory assumes an
  international division of labour
• core countries producing manufactured goods for
  domestic consumption and export
• peripheral economies trading in primary
  productions from the extractive industries and
  agriculture

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The globalisation of production

• Post 70s oil crisis capitalist production
  re-organised - much manufacturing capacity moved
  to the 3rd world. Made possible by
• Multilateral institutions (IMF, WorldBank, OECD)
  facilitate/support foreign investment
• Greater capital mobility (spate of lending by
  financial institutions in 70s 80s to LDCs World
  directly and to investors looking for a quick
  profit in the periphery or vulnerable states.)
• Advances in transportation and communication,
  reducing organisational/technical costs
  associated with relocation

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The globalisation of finance

• Changes in money/capital markets since the 1970s
  - the most unequivocal indicator of the
  globalisation of economic affairs.
• Daily volume of foreign exchange trading is 100s
  of times the value of traded goods
• So much so that financial flows are increasingly
  separate from trade in manufactures and services
  - almost constituting a separate global economy

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The globalisation of finance

• Technological innovations in computer software
  have made communications between traders a
  routine and speedy affair.
• Factors contributing to the globalisation of
  finance
• Floating of currency exchange rates in the 1970s
  (the Bretton Woods Failure)
• Deregulation of financial markets by national
  governments in the 1980s

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The globalisation of finance

• Relaxation of rules introduced much liquidity
  into world trade but also greater volatility and
  insecurity into the world economy.
• Why?

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The globalisation of finance

• Because the rationality of financial markets,
  which are geared to short-term profit
  considerations and very sensitive to variations
  in national policies, makes it more difficult for
  national governments to carry through measures
  like tax increase, interests rate changes or
  social welfare measures.
• Barrie Axford, The Global System

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The globalisation of finance

• Thus the development of a globalised economy in
  financial markets has a direct political
  consequence
• Challenging the position of the nation-state as
  the prime mover in domestic politics and policy
  and as the major player in international affairs.

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The globalisation of technology

• The increasing powers of computers, softtware and
  communications technology have all served to
  compress the world.
• Flows of money, goods and services are all
  accelerated by the various technologies in use

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The globalisation of technology

• The global opportunities afforded by such
  technologies demand global players
• News International
• Viacom
• MCA
• Sony
• Disney
• AOL Time Warner

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The AOL-Time Warner Merger

• Jan 10 2000 - AOL/TW announce a strategic merger
  of equals, creating a company with an all-stock
  valuation of 350 billion and with revenues of
  30 billion.

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The AOL-Time Warner Merger

• By merging the world's leading Internet and
  media companies, AOL Time Warner will be uniquely
  positioned to speed the development of the
  interactive medium and the growth of all its
  businesses. The new company will provide an
  important new broadband distribution platform
  for America Online's
  interactive services and drive subscriber growth
  through cross-marketing with Time Warner's
  pre-eminent brands.

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The AOL-Time Warner Merger - Instant Synergy

• CNN.com and Entertaindom.com programming will be
  featured prominently on various America Online
  services.
• AOL members will have access to a wide range of
  Time Warner promotional music clips from Time
  Warner's unparalleled selection of popular
  artists.
• Time Warner and AOL MovieFone will participate in
  online-offline cross-promotion of Time Warner
  movies and related content, including live
  events.

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The AOL-Time Warner Merger - Instant Synergy

• Broadband CNN news content was to be distributed
  on AOL Plus, the rich media content offering
  designed for AOL members connecting via
  broadband.
• Warner Bros. retail stores will promote the AOL
  service, (e.g in-store distribution of AOL
  disks).
• Time Warner will include AOL disks in promotional
  mailings and product shipments.

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The AOL-Time Warner Merger

• "This strategic combination with AOL accelerates
  the digital transformation of Time Warner by
  giving our creative and content businesses the
  widest possible canvas. The digital revolution
  has already begun to create unprecedented and
  instantaneous access to
  every form of media and to unleash immense
  possibilities for economic growth, human
  understanding and creative expression. AOL Time
  Warner will lead this transformation, improving
  the lives of consumers worldwide.
• Gerald Levin, CEO AOL Time Warner

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The News Corporation Limited Worldwide

• Filmed Entertainment
• United States
• Fox Filmed Entertainment
• Twentieth Century Fox
• Fox 2000
• Fox Searchlight
• Fox Animation Studios
• Twentieth Century Fox Home Entertainment
• Twentieth Century Fox Licensing and
  Merchandising
• Fox Interactive
• Twentieth Century Fox Television
• Australia
• Fox Studios Australia

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The News Corporation Limited Worldwide

• Newspapers
• United States
• New York Post
• United Kingdom
• The Times
• The Sunday Times
• The Sun
• News of the World
• Australasia
• National
• The Australian
• The Weekend Australian (plus 100 regional
  papers)

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The News Corporation Limited Worldwide

• Magazines and Inserts
• United States
• TV Guide plus 7 others
• Canada
• News Canada Marketing plus 2 others
• United Kingdom
• The Times Educational Supplement
• The Times Higher Education Supplement
• The Times Literary Supplement
• Australasia
• Pacific Islands Monthly

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The News Corporation Limited Worldwide

• Book Publishing
• United States
• United Kingdom Europe
• Australasia
• HarperCollins Publishers

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The News Corporation Limited Worldwide

• Other Operations
• United States
• News America New Media
• Los Angeles Dodgers
• Los Angeles Kings (40 option)
• Los Angeles Lakers (9.8 option)
• Plus a variey of telecoms, cable service provider
  etc. companies worldwide.

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The globalisation of technology

• The products of the transglobal culture industry
  already circulate to mass audiences creating
  political fears about cultural imperialism .
• However arguably new technology will permit a
  growth in localism, access to the particular
  rather than exclusively the universal

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Post-Capitalism?

• The creation of the modern global system is often
  understood in terms of capitalism and
  industrialism.
• Capitalism - Supremacy of the free market,
  commodity production for profit, free (but
  propertyless) wage labour
• Industrialism - the process whereby raw materials
  are converted into commodities via machinery or
  other powers sources. Industrialism includes many
  aspects of domestic life (transport systems,
  urbanisation, travel and communications)

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Post-Capitalism?

• Post WWII - shift from
• organised capitalism (production, consumption,
  money and labour circulating nationally) to
• disorganised capitalism (where these circuits
  become global in scope).

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Post-Capitalism?

• This shift has meant
• transformations in the design of production
  systems
• changing organisation/meaning of work and
• an explosion of consumption in both mass and
  specialised markets.

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The Knowledge Economy

• The most obvious characteristic of late 20th
  century global economy/market was (is) the
  extent of its transformation by ICTs.

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The Knowledge Economy

• To say this is not just to point to the impact of
  new tech upon production systems but to see the
  informatisation of the world economy as
• changing the condition for national policies
• facilitating the globalisation of local social
  movements
• changing the emphasis of production in advanced
  capitalist societies from material goods to
  information processing activities

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The Knowledge Economy

• Thus the core states have become service
  economies.
• Thus the new global economic champions, (e.g.
  Microsoft) tend to be in the knowledge based
  industries.

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The Knowledge Economy

• Thus traditional sources of comparative advantage
  - technology, labour, land and money - count for
  less against the new factors of computer-driven
  scientific innovation - the transferable skills
  of knowledge workers.
• Thus intelligence is the new form of property and
  the basis for wealth creation

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The Knowledge Economy

• Changes in Production
• Shift from Fordism to Postfordism(or flexible
  specialisation)
• Systems of standardised mass production have
  given way to flexible, customised production and
  from vertically integrated, large-scale
  bureaucratic organisations to vertical
  disintegration, flatter organisation structures
  and both personal and strategic networking within
  and between economic units.

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The Knowledge Economy

• Labour is no longer a major competitive asset in
  the knowledge economy
• Many organisations now export discrete job
  functions. Instead of keeping a pool of labour
  within the organisation these are imported
  (freelancers) as necessary.
• Thus the costs of unproductive time passes from
  the business to the workers

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The Knowledge Economy

• In their most extreme form then postmodernism
  businesses are not just lean - they are
  organisationless or virtual organisations
• Shifting clusters of skills and project teams are
  held together by
• relatively few core workers who define the
  organisational identity and goals
• routine use of advanced communications technology

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The Knowledge Economy

• Lash and Urry point to a global, post-capitalist
  economy based on reflexive accumulation
• knowledge and information and central to economic
  life
• consumption is increasingly tailored to niche
  markets (here communications technology and
  automated productions systems reduce the gap
  between producers and consumers)

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