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Globalization – the integration of factors of production and inclusion of consumer groups from different markets around the world – facilitates unprecedented achievements of economies of scale for producers. Access to increased numbers of laborers, investors, markets, resources, technologies and business models through globalization can theoretically maximize productive efficiency to a level consistent with the size of the world's population.
Identifying the Drivers of Economic Globalization. That in the evaluation of drivers of globalization the focus is on the. And communication technology (ICT. Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology.
Economies of Scale
Drivers Of Globalization Examples
Economies of scale refers to the phenomenon of diminishing marginal costs associated with each additional unit of output. A company experiences economies of scale as it specializes and is able to produce extra goods with fewer and fewer input costs.
Globalization And Information Technology
According to economic theory, economies of scale are the natural consequence of specialization and the division of labor. It is one of the chief drivers of economic growth. However, firms do not realize economies of scale in perpetuity; there is a maximum level of efficient output for any given inputs, and operations may sometimes extend too far and cause diseconomies of scale.
Globalization
- Drivers of Globalization: Integration of Theories and Models - Markus Bauernfeind - Essay - Economics - International Economic Relations - Publish your bachelor's or master's thesis, dissertation, term paper or essay.
- Aug 04, 2015 A: Drivers of the globalization of firms include government, competition, cost globalization and market drivers. Globalization has also been driven by technology, including use of the Internet, mobile phones and satellite-tracking technology.
- Aug 04, 2015 A: The primary drivers of globalization are rapid advancements in technology, culture, economics and politics. With each passing year, the speed at which transactions take place and the spreading influence of cultural forces serve to integrate international societies. The most prominent driver of this trend is the advancement of technology.
With access to new inputs and potentially more profitable markets, globalization can increase specialization and operational efficiency. The practical consequences of globalization include lower costs to consumers, access to capital for wealthy countries, access to jobs for poorer countries, increased competition and higher global productivity.
As globalization spreads the division of labor to a global scale, countries are able to export labor and production processes that they are relatively less profitable at and instead specialize in labor that is relatively more profitable. This result can be seen in factory jobs being driven out of the United States, which frees up capital for highly technical, highly productive fields such as IT. Companies are able to pursue higher degrees of efficiency and increase their economies of scale.