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Drivers of Globalization
The media and almost every book on globalization and international business speak about different drivers of globalization and they can basically be separated into fivedifferent groups:
1) Technological drivers
Technology shaped and set the foundation for modern globalization. Innovations in the transportation technology revolutionized the industry. The mostimportant developments among these are the commercial jet aircraft and the concept of containerization in the late 1970s and 1980s. Inventions in the area of microprocessors and telecommunications enabledhighly effective computing and communication at a low-cost level. Finally the rapid growth of the Internet1 is the latest technological driver that created global e-business and e-commerce.
2)Political drivers
Liberalized trading rules and deregulated markets lead to lowered tariffs and allowed foreign direct investments in almost all over the world. The institution of GATT (General Agreementon Tariffs and Trade) 1947 and the WTO (World Trade Organization) 1995 as well as the ongoing opening and privatization in Eastern Europe are only some examples of latest developments.
3) Marketdrivers
as domestic markets become more and more saturated, the opportunities for growth are limited and global expanding is a way most organizations choose to overcome this situation. Common customerneeds and the opportunity to use global marketing channels and transfer marketing to some extent are also incentives to choose internationalization. (Ferrier, 2004)
4) Cost drivers
Sourcingefficiency and costs vary from country to country and global firms can take advantage of this fact. Other cost drivers to globalization are the opportunity to build global scale economies and the highproduct development costs nowadays. (Ferrier, 2004)
5) Competitive drivers
with the global market, global inter-firm competition increases and organizations are forced to “play” international. Strong...
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