how does the current wave of globalisatin differ from the previous ones?

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Introduction

Globalization is defined as the process of integration among countries by exchange of goods, services, ideas and culture as a whole. Globalization has been gained much more importance over last two or three decades since the start of third wave of globalization.

Third wave of globalization is the new wave of globalization being operable around the globe since 1989 (Robertson, 2003). It is often discussed that the third wave of globalization is different than the previous two waves in many aspects.

The essay focuses on differentiating the current wave of globalization from previous two waves and highlights the main areas where the difference lies.

How Current Wave of Globalization is Different?

There have been three waves of globalization so far, before we discuss each wave and differentiate the most recent wave with the previous two, it is important to analyze different strands of globalization.

The first and most important strand of globalization is the trade of goods & services as the globalization is not possible without the trade. Other strands include the exchange of capital, migration and exchange of ideas and values (Stiglitz, 2007).

In the view of Robertson (2003), the first wave of globalization was initiated by UK in the 1870s as it initiated the rapid industrialization in that time period. The process of globalization has faced troughs and peaks throughout its progress.

There are numerous reasons why first wave of globalization was unsuccessful and different than the current wave of globalization; those reasons include less liberalization, higher import / export duties, current wave of globalisatin fixed monetary regime and many more. This wave was primary facilitated by UK’s colonial approach as UK and rest of Europe was able to access the developing markets as most of the Asian developing markets were their colonies. The first wave of globalization ended in 1913 with the start of First World War.

The second wave of globalization was initiated and dominated by US; the peak was initiated after the Bretton Woods institutions were formulated and the post war Marshall Plan was implemented. At the starting phase of second wave of globalization, there was impressive growth all around the world including both developing and developed countries so the globalization seemed successful in those years. The rapid growth was observed until mid-1970s when growth in most of the economies around the world stagnated due to various factors such as the rising oil prices (Robertson, 2003). After this shock, the third wave of globalization was then introduced in 1989 which faced different conditions around the world including the liberal trade terms initiated by many countries. The figure below shows the world’s actual GDP growth and average GDP growth from period to period; this clearly highlights that the economic growth of the world has kept fluctuating so it is important to trace the economy before making any conclusion.

The third wave of globalization has faced quite different economic, technological and social conditions around the world so it is altogether different from two previous waves of the globalization. In the view of Mazzarol, Norman and Sim (2003), the global economy has changed dramatically over the years; firstly, due to the promotion by World Bank and IMF, the countries around the world have become liberalized in terms of trade so it makes the process of globalization easier and efficient. Other than this, countries themselves are promoting the globalization by reducing the import / export duties; it can easily be analyzed that the export duties have reduced dramatically over last two decades. Some countries have started tariff free exports to promote exports from their countries; many countries current wave of globalisatin do so for limited number of products and services for which the domestic demand is already met. Thirdly, the global economy has changed in terms of currency exchange rate as most of the economies around the world are now traded at floating rate which make it trade at the fair value (Wacziarg and Welch, 2008).

It is not only the economics which make third wave of globalization different from the first two but it is different in almost every aspect. The social conditions have also changed significantly around the world. The income inequality has increased around the world which has created inequality in the wealth of people around the world; which means that there is..