Globalization and international business planting trends

Rusudan Kvaratskhelia  Levan kikilashvili

Journal number 4 ∘ Rusudan Kvaratskhelia ∘ Levan kikilashvili ∘
Globalization and international business planting trends

Doi: 10.36172/EKONOMISTI.2021.XVII.04.Rusudan.Kvaratskhelia/Levan.Kikilashvili

Resume

An important scientific problem of our time is the particular manifestation of modern globalization and the pressure on the social sphere. With real resistance to negative manifestations in the conditions of modern globalization, a social immune system has been formed. The advantages of globalization are becoming increasingly compatible with historical traditions and the mentality of a particular society. The term "global influence", which has been used as an important feature of globalization, has been used in one way or another since ancient times. However, the transition from a concept to a term and then the conceptual use of that term has only recently begun. It should be noted that there are still not many textbooks and dictionaries in this regard. The complex nature and dynamics of globalization pressures as an interdisciplinary object of study significantly hinder the establishment of clear boundaries of the subject matter, as they often merge with other areas of knowledge: futurology, cultural studies, and philosophy.

Keywords: Green Business, Green Technologies, Globalization, Health Promotion, Eco-Friendly Universe

Introduction

How can we make globalization fairer? The ability of many countries to put the benefits of globalization above personal interests has brought unprecedented economic wealth and scientific progress. However, it should also be noted that for different reasons, not all countries have benefited from the same benefits of globalization and technological change: wealth is unfairly distributed and economic growth is driven by huge environmental costs. How can countries put aside personal, narrow interests and work together to create fairer societies and a healthier planet? How can we make globalization fairer?

Christine Lagarde, the former president of the International Monetary Fund, said that "the debate over trade and access to foreign goods is as old as society itself," and history tells us that closing borders or protectionist policies is not the right way to go.

Lagarde, Managing Director of the International Monetary Fund, has consistently argued that we should pursue a policy of globalization that expands the benefits of openness and integration while mitigating their side effects. How to make globalization fairer is a very difficult issue involving the redesign of economic systems. but how?

Globalization is deeply linked to economic systems and markets, which in turn have an impact on social issues, culturally difficult factors, regional specificities, timelines, and collaborative networks. All this requires, on the one hand, global consensus and cooperation, and on the other hand, country-specific solutions [Globalisation after the pandemic, 2021].

Many world leaders, decision makers and influential people have spoken out about globalization. Some point to its pros and cons, while others focus more on its negative effects. For example, some of the most interesting quotes about globalization sound like this:

Former President of the United States - Bill Clinton

"No generation has had the opportunity, as we have now, to build a global economy that leaves no one without benefits. It is an excellent opportunity, but also a deep responsibility."

Barack Obama, former US President:

"Globalization is a solid and most visible fact, because of technology, because of the integrated global supply chain, because of changes in transport, and we can not build a wall around it."

Dominique Strauss-Kahn, former Managing Director of the International Monetary Fund:

"We can not talk about globalization day by day, but at the same time we do not remember that we need multilateral solutions."

Stephen Harper, former Prime Minister of Canada:

"We have to remember that we are in a global economy. "The purpose of fiscal stimulus is not just to maintain activity in the national economy, but also to help the global economy, and that is why it is so critical that the measures taken in these packages prevent everything that smells of protectionism."

The Prime Minister of Australia, Julia Gillard:

"My guiding principle is that prosperity can be shared. We can create wealth together. "The global economy is not a zero-sum game!"

Spiritual Leader, Dalai Lama About Globalization:

"I realize that due to modern technological evolution and our global economy, and as a result of large population growth, our world has changed significantly: it has become much smaller. However, our ideas did not develop at the same pace; We continue the old national demarcation and the old feelings of "us" and "them".

The famous German sociologist Ulrich Beck also spoke about globalization.

"Globalization is not just what is bothering us and threatening us in the future, but what is happening in the present and what we need to focus on first."

Bill Gates, owner and former CEO of Microsoft.

"It is a fact that, with the rising standard of living around the world, world trade has been a mechanism that allows poor countries to become increasingly concerned about basic needs, such as vaccinations today."

John Lennon, member of The Beatles:

"Imagine that there are no countries. It is not difficult to kill or die .. Neither is religion. Imagine for a second you were transposed into the karmic driven world of Earl. You, you can say that I am a dreamer. But I am not the only one. I hope you will join us someday and the world will be united. " [Globalization: Definition, Benefits, Effects].

Many world leaders, decision-makers, and influential people have spoken out about globalization. Some point to its pros and cons, while others focus more on its adverse effects. For example, some of the most exciting quotes about globalization sound like this:

Former President of the United States - Bill Clinton

"No generation has had the opportunity, as we have now, to build a global economy that leaves no one without benefits. It is an excellent opportunity but also a profound responsibility. "

Barack Obama, former US President:

"Globalization is a solid and most visible fact, because of technology, because of the integrated global supply chain, because of changes in transport, and we can not build a wall around it."

Dominique Strauss-Kahn, former Managing Director of the International Monetary Fund:

"We can not talk about globalization day by day, but at the same time, we do not remember that we need multilateral solutions."

Stephen Harper, former Prime Minister of Canada:

The Prime Minister of Australia, Julia Gillard:

"My guiding principle is that prosperity can be shared. We can create wealth together. "The global economy is not a zero-sum game!"

Spiritual Leader, Dalai Lama About Globalization:

"I realize that due to modern technological evolution and our global economy, and as a result of large population growth, our world has changed significantly: it has become much smaller. However, our ideas did not develop at the same pace; We continued the old national demarcation and the old feelings of "us" and "them."

The famous German sociologist Ulrich Beck also spoke about globalization.

"Globalization is not just what is bothering us and threatening us in the future, but what is happening in the present and what we need to focus on first."

Bill Gates, owner and former CEO of Microsoft.

John Lennon, member of The Beatles:

"Imagine that there are no countries. It is not difficult to kill or die. Neither is religion. Imagine for a second you were transposed into the karmic-driven world of Earl. You, you can say that I am a dreamer. However, I am not the only one. I hope you will join us someday, and the world will be united.

Discussion

International trade and competitiveness are at the heart of Europe's economic growth model. In terms of trade policy, the EU speaks unanimously, globally and ranks first in the world as the largest trader in terms of goods, services and investments. As set out in the Trade Policy Strategy set by the European Commission (2021) [COMMUNICATION FROM THE COMMISSION], the EU focuses on open strategic autonomy, values, open trade and cooperation in the interests of the EU. Effective, sufficiently diversified, and resilient as well as sustainable global value chains are an important component of this type of approach. In addition, trade policy also plays an important role in the recovery of the COVID-19 post-pandemic economy, the introduction of digital technologies, the development of a green economy - in order to develop a more sustainable economy. Making the right policy when designing a trade policy for the world in 2030 means political, economic, technological, environmental and social shifts and the global trends emerging from them [The Commission’s 2020 Strategic Foresight].

Global uncertainty is growing, driven by political and geoeconomic tensions. There is a growing bias between international cooperation and multilateral governance, followed by delays or actions bypassing multilateral institutions. This trend has its roots in several directions. First, the accumulation of globalization, technological evolution, and global value chains has had an adicotomous impact on various economies and societies. On the one hand, they have created tremendous efficiencies and achievements that contribute to sustainable economic growth driven by international trade in many countries around the world. The process has helped millions of people get out of poverty. On the other hand, these events sometimes have a devastating effect, leading to growing inequality and the regression of some individuals or societies. It is necessary to make transitional adjustments, spending on the part of the state to create more effective employment opportunities or to improve wages and working conditions. In many cases, governments do not respond adequately to the economic adjustment and mitigation of the negative impact of trade policy. This has led to calls for deregulation and an increase in internal vision and isolationist reactions.

At the same time, China’s rapid rise, demonstration of global ambitions, and the pursuit of a clear state capitalist model have fundamentally changed the global economic and political order. This poses growing challenges to the established global economic governance system and affects a level playing field for European companies competing with global and domestic competitors.

International trade and competitiveness are at the heart of Europe's economic growth model. In terms of trade policy, the EU speaks unanimously, globally, and ranks first in the world as the largest trader in terms of goods, services, and investments. As set out in the Trade Policy Strategy set by the European Commission (2021), the EU focuses on genuine strategic autonomy, values, open trade, and cooperation in the interests of the EU. Practical, sufficiently diversified, resilient, and sustainable global value chains are an essential component of this type of approach. In addition, trade policy also plays an essential role in the recovery of the COVID-19 post-pandemic economy, the introduction of digital technologies, and the development of a green economy to develop a more sustainable economy. Making the right policy when designing a trade policy for the world in 2030 means political, economic, technological, environmental, and social shifts and the global trends emerging from them.

On the other hand, these events sometimes have a devastating effect, leading to growing inequality and the regression of some individuals or societies. It is necessary to make transitional adjustments, spending on the part of the state to create more effective employment opportunities or improve wages and working conditions. In many cases, governments do not respond adequately to the economic adjustment and mitigation of the negative impact of trade policy [At the EU level, the European Globalisation]. This has led to calls for deregulation, an increase in internal vision, and isolationist reactions.

At the same time, China's rapid rise, demonstration of global ambitions, and the pursuit of a transparent state capitalist model have fundamentally changed the global economic and political order. This poses growing challenges to the established global economic governance system and affects a level playing field for European companies competing with global and domestic competitors [This challenge is particularly visible in the area].

Third, the acceleration of climate change, along with the loss of biodiversity, and the degradation of the environment, with their tangible examples, are having devastating effects, further reinforcing the need for a rapid transition to a green economy. The Europe Green Agreement is a new EU growth strategy that promotes economic policy reset for the better, meeting the challenges of the 21st century. Its main goal is to move to a neutral climate, to use natural resources efficiently, to establish an environmentally sustainable economy by 2050. The strategy includes reducing greenhouse gases by at least 55% by 2030, as well as protecting, conserving and strengthening natural resources. It is the driving force of the competitiveness of modern states, which will lead to a progressive, profound transformation of the economy, and this fact will have a strong impact on the development of trade.

Illustration №1

The review also identifies areas and actions that are crucial to achieving the EU's goals in the medium term, although it is important to make a small excursion into the recent past.

Conclusion and recommendations

Europe has enormous potential to use its single market size to impose its values and standards through open trade with other parts of the world. Brussels effect. This is already tangible in many areas. However, it is naturally most vital where the single market is most resounding. So with the emergence of new sectors such as digital services and the green economy, the single market needs to deepen in tandem to continue to use internal forces to make a positive global impact [Bradford, A. 2015].

At the same time, Europe must take risks in areas where there is insecurity. It is a vital commodity and service to Europe.

Cannot run easily and where more insurance against external shocks is needed. It stands beyond Europe's ambition to increase its "open strategic autonomy". The European Commission has found that 34 products used in the EU are extremely vulnerable due to supply chain delays within their low potential diversification and replacement union [European Commission, 2021].

To achieve strategic autonomy, in the long run, it may be inevitable to re-pack or strengthen certain sectors, such as semiconductors and pharmaceuticals. The European Commission is already taking steps to strengthen the international role of the euro, which may eventually make European companies more resilient to the unfavorable actions of others, such as foreign sanctions.

The second priority is to strengthen Europe's own domestic demand. This is necessary to compensate for a more uncertain global landscape in which economies may find it difficult to rely on external demand when needed. This will boost European growth and also help stabilize global growth if the contributions of other economies weaken.

For a decade before the pandemic, Europe was prone to demand and imports from the rest of the world. Annual growth in domestic demand was on average 2 percentage points lower in the decade after 2008 than in the previous decade, and it was slower than that of its major trading partners. This was reflected in the current year account surplus.

To reverse this trend, it is necessary to take into account past experiences and implement policies that strengthen internal sources of growth. Three components should be mentioned here.

First of all, Europe intends to direct public and private investment to those sectors of the economy that will generate higher real incomes in the future, namely the green and digital sectors. It is estimated that the green investment multiplier is two to three times higher than the non-green investment.

The pandemic has already shifted activity in this direction, but funding and a regulatory framework are needed to ensure that the economy develops smoothly.

Europe has the ideal tool to start this process, in the form of the € 750 billion EU (NGEU) fund set up in response to the pandemic. The European Commission estimates that the NGEU could increase potential output by 3% in some countries by 2024.

NGEU - assistance that is temporary - is also needed for green and innovative investments in the ever-expanding and deepening European capital markets.

It cannot run efficiently, and where more insurance against external shocks is needed. It stands beyond Europe's ambition to increase its "open strategic autonomy." The European Commission has found that 34 products used in the EU are highly vulnerable due to supply chain delays within their low potential diversification and replacement union.

To achieve strategic autonomy, in the long run, it may be inevitable to re-pack or strengthen specific sectors, such as semiconductors and pharmaceuticals. The European Commission is already taking steps to strengthen the euro's international role, which may eventually make European companies more resilient to the adverse actions of others, such as foreign sanctions.

The second priority is to strengthen Europe's domestic demand. This is necessary to compensate for a more uncertain global landscape in which economies may find it difficult to rely on external demand when needed. This will boost European growth and also help stabilize global growth if the contributions of other economies weaken.

For a decade before the pandemic, Europe was prone to demand and imports from the rest of the world. Annual growth in domestic demand was on average two percentage points lower in the decade after 2008 than in the previous decade, and it was slower than that of its major trading partners. This was reflected in the current year's account surplus.

To reverse this trend, it is necessary to consider past experiences and implement policies that strengthen internal sources of growth. Three components should be mentioned here.

The pandemic has already shifted activity in this direction, but funding and a regulatory framework are needed to ensure that the economy develops smoothly.

EU - temporary assistance - is also needed for green and innovative investments in the ever-expanding and deepening European capital markets [Lagarde, C. 2021 “Towards a green capital markets union for Europe”].

Second, unlike the Great Depression, fiscal policy support should not be phased out until the recovery is more mature. But it needs to move to a more targeted action plan that supports sustainably high demand. This means that fiscal policy will need to promote structural change in the economy rather than maintain sectors. In the medium term, a rules-based framework based on both debt sustainability and macroeconomic stabilization should be followed.

Third, monetary policy will continue to support the economy in order to stabilize inflation at a 2% inflation target in the medium term. The European Central Bank is committed to maintaining favorable financing conditions for all sectors of the economy during the pandemic. Once the pandemic emergency is over, advanced guidance on tariffs as well as asset purchases will ensure that monetary policy remains supportive of achieving the goal in a timely manner [Lagarde, C. 2021 “Monetary policy during an atypical recovery”].

Thus, Europe, more than any other major economy, has reaped the benefits of globalization in the decades before the pandemic. But now it is necessary to lay the groundwork for actions for the future in which globalization will become more unpredictable.

The benefits of trade and the diversification of demand still exist. But they face the opposite problem, which Europe cannot ignore. This means that Europe needs to adapt and change in order to continue to thrive in a global economy and remain a driver of stability and peace. Europe’s historical response to the pandemic shows that it has found itself. Consequently, it allows us to focus on increasing resilience in the face of global challenges. In this sense, the pandemic gives Europe an infinitely great opportunity, which must be used.

The impact of globalization on modern international business is huge in terms of business greening. The introduction of green technologies serves several issues:

1. Environmental protection, biodiversity conservation, slowing down climate change, groundwater purity;

2. Improving food, improving human health by increasing the environmental safety of both food and any consumer item;

3. Improving people's living standards by creating environmentally safe construction and renovation facilities, creating green living and working environments, and introducing energy-efficient technologies, which will greatly reduce utility costs in households;

4. Increasing the efficiency of business, as the fastest spread of energy-efficient and high-tech, improved functionality, technologies with diverse and ever-increasing capabilities in the world helps international business to expand its range, increase production and improve the quality of goods and services. By means of a large amount of reduction;

5. Changes the worldview of both producers and consumers in terms of environmental measures, healthy environment, healthy lifestyle, saving natural resources and humane attitude towards nature.

Globalization is facilitating the spread of digital technologies; Contributes to the dissemination and introduction of modern knowledge, experience, the latest technologies. As noted in the theoretical review process, the EU is increasingly trying to actively introduce green technologies and promote the development of a green economy.

The Association Agreement between Georgia and the European Union fully helps the Georgian business sector to establish a worthy place in the EU market, with the active production of the Georgian "green product" and meeting international standards.

Second, unlike the Great Depression, fiscal policy support should not be phased out until a more mature recovery. Nevertheless, it needs to move to a more targeted action plan that supports sustainably high demand. This means that fiscal policy will need to promote structural change in the economy rather than maintain sectors. In the medium term, a rules-based framework based on debt sustainability and macroeconomic stabilization should be followed.

Third, monetary policy will continue to support the economy to stabilize inflation at a 2% inflation target in the medium term. The European Central Bank is committed to maintaining favorable financing conditions for all sectors of the economy during the pandemic. Once the pandemic emergency is over, advanced guidance on tariffs and asset purchases will ensure that monetary policy remains supportive of achieving the goal promptly.

Thus, more than any other major economy, Europe has reaped the benefits of globalization in the decades before the pandemic. Nevertheless, now, it is necessary to lay the groundwork for actions for the future in which globalization will become more unpredictable.

The benefits of trade and the diversification of demand still exist. Nevertheless, they face the opposite problem, which Europe cannot ignore. This means that Europe needs to adapt and change to continue to thrive in a global economy and remain a driver of stability and peace. Europe's historical response to the pandemic shows that it has found itself. Consequently, it allows us to focus on increasing resilience in the face of global challenges. In this sense, the pandemic gives Europe an infinitely great opportunity, which must be used.

The impact of globalization on modern international business is enormous in terms of business greening. The introduction of green technologies serves several issues:

1. Environmental protection, biodiversity conservation, slowing down climate change, groundwater purity;

2. Improving food, improving human health by increasing the environmental safety of both food and any consumer item;

4. Increasing the efficiency of the business, as the fastest spread of energy-efficient and high-tech, improved functionality, technologies with diverse and ever-increasing capabilities in the world helps international business expand its range, increase productivity and improve the quality of goods and services. Using a large amount of reduction;

5. Changes the worldview of both producers and consumers in terms of environmental measures, healthy environment, healthy lifestyle, saving natural resources, and humane attitude towards nature.

Globalization facilitates the spread of digital technologies; contributes to the dissemination and introduction of modern knowledge, experience, and latest technologies. As noted in the theoretical review process, the EU is increasingly trying to actively introduce green technologies and promote the development of a green economy.

The Association Agreement between Georgia and the European Union fully helps the Georgian business sector establish a worthy place in the EU market, with the active production of the Georgian "green product" and meeting international standards.

References

Globalisation after the pandemic 2021 Per Jacobsson Lecture by Christine Lagarde, President of the ECB, at the IMF Annual Meetings. https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp211016~25550329d5.en.html

Globalization: Definition, Benefits, Effects, Examples – What is Globalization?

https://youmatter.world/en/definition/definitions-globalization-definition-benefits-effects-examples/

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Trade Policy Review - An Open, Sustainable and Assertive Trade Policy. Brussels, 18.2.2021 COM(2021) 66 final. Communication on the Trade Policy Review (europa.eu)

The Commission’s 2020 Strategic Foresight report analyses the impact of the COVID-19 pandemic on the dynamics of some relevant megatrends, COM (2020) 493 final. The Commission’s 2021 Strategic Foresight Report will focus on open strategic autonomy.

At the EU level, the European Globalisation Fund aims at making a contribution to deal with such adjustment costs; cf Regulation (EU) No 1309/2013 of the European Parliament and of the Council of 17 December 2013 on the European Globalisation Adjustment Fund (2014-2020) and repealing Regulation (EC) No 1927/2006. A new regulation is being adoped, allowing the Fund to continue supporting workers and self-employed persons whose activity has been lost

This challenge is particularly visible in the area of energy intensive industries and notably the steel sector, where global solutions are needed to address the immense imbalances on the world market negatively affecting European companies and undermining the successful green transition of this ecosystem

Bradford, A. (2015), “The Brussels Effect”, Northwestern University Law Review, Vol. 107, No 1.

European Commission (2021), “Strategic dependencies and capacities”, Commission Staff Working Document, 5 May. https://ec.europa.eu/info/sites/default/files/strategic-dependencies-capacities.pdf

Specifically, the multipliers are estimated to be 1.1-1.5 for renewable energy investment and 0.5-0.6 for fossil fuel energy investment, depending on horizon and specification. See Batini, N., di Serio, M., Fragetta, M., Melina, G. and Waldron, A. (2021), “Building Back Better: How Big Are Green Spending Multipliers?”, IMF Working Papers, No 2021/087, International Monetary Fund, March. https://www.imf.org/en/Publications/WP/Issues/2021/03/19/Building-Back-Better-How-Big-Are-Green-Spending-Multipliers-50264

Lagarde, C. (2021), “Towards a green capital markets union for Europe”, speech at the European Commission’s high-level conference on the proposal for a Corporate Sustainability Reporting Directive, 6 May. https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp210506~4ec98730ee.en.html

Lagarde, C. (2021), “Monetary policy during an atypical recovery”, speech at the ECB Forum on Central Banking “Beyond the pandemic: the future of monetary policy”, Frankfurt am Main, 28 September. https://www.ecb.europa.eu/press/key/date/2021/html/ecb.sp210928~4cc57f558d.en.html