globalistion2 track1

8/3/2019 GLOBALISTION2 TRACK1

1/19

Impact of globalization on Indian

entrepreneurs


2/19

` The term globalization means integration of economies

and societies through cross country flows of information,

ideas, technologies, goods, services, capital, finance and

people

` In fact, some people fear cultural and social integration

even more than economic integration. Limiting ourselves to

economic integration, one can see this happen through the

three channels of (a) trade in goods and services, (b)

movement of capital and (c) flow of finance` Globalization indeed brings in new technology and

opposition to globalization is not tantamount to becoming

technologically isolated from the rest of the world


3/19

Globalization has a significant impact on

entrepreneurial enterprises in many ways.

` Technology

` Consumers` Export & import

` Education

` Tourism

` Privatization

` Employment

` Expansion


4/19

` Network innovatively across the value

chain

` Innovation could be in any of the

areas.

` Re-engineering products or services.

` Creating new products or services.

` New processes to improve

productivity.` Developing new marketing techniques

to expand sales.


5/19

` Customers have easy access to information on Brands

& services therefore they have become more aware.

` Tastes of customers are converging .

` Whole world has become 'one single market' .` Customers have become more discerning & assertive .

` They want better & better products & Services, at

lesser & lesser cost .


6/19

` Indias Export and Import in the year 2001-02 wasto the extent of 32,572 and 38,362 million

respectively.

` Many Indian companies have started becoming

respectable players in the International scene.

` Agriculture exports account for about 13 to 18% of

total annual of annual export of the country.

` In 2000-01 Agricultural products valued at more

than US $ 6million were exported from the country

23% of which was contributed by the marine

products alone.


7/19

` The international transactions in services are defined

as the economic output of intangible commodities

that may be produced, transferred and consumed at

the same time.` Traditionally services are viewed as domestic

activities due to direct contact between producer and

consumer and government monopoly in

infrastructure sector.` The ascent of information and communication

technology has given rise to e-commerce, e-banking,

e-learning, e-medicine and e-governance.


8/19

So, it is argued that government finds it increasingly

difficult to cope up with technology-driven activities.


9/19

` India is emerging as preferred

global destination for off shore

software development and

remote business processing.

` About 258 of the Fortune 500

companies source some of their

IT requirements from India.

` Worldwide 38 IT Companies

have level 5 SEI-CMM

Certification of which 19 (50%)

are Indian.


10/19

India has produced some Islands of excellence.

` Infosys / Wipro / TCS

` Ranbaxy / Dr. Reddy's Lab.

` Bharti Televentures` Reliance Industries Ltd. / Reliance Petroleum Ltd.

` Sundaram Fasteners / Sundaram Clayton

` Hindustan Lever Ltd. / Marico / Tata Tea

` A.V. Birla Group / Hindalco

` Zee Telefilms.


11/19

` The pressure of globalization is havinga major impact on SMEs of the Indian

tourism industry.

` Globally acting suppliers, decreasing

transportation costs and emerging newdestinations have put pressure on the

Indian SMEs in traditional

destinations.

` They are economically very dependenton tourism; a need for effective policy

support arises.


12/19

` The rapid growth in world trade, foreign direct

investment, and cross-border financial flows over the

past decade has been the main manifestation of the

increasing "globalization" of the world economy.

` Technological developments have magnified the

effects of this liberalization by reducing the costs of

transportation and communications, hence

expanding the scope and volume of goods and

services that are internationally tradeable.


13/19

The gains from globalization can be analyzed in the

context of the three types of channels of economic

globalization identified earlier.

TRADE IN GOODS & SERVICES

` International trade leads to allocation of resources

that is consistent with comparative advantage.

` This results in specialization which enhances

productivity.

` It is accepted that international trade, in general, is

beneficial and that restrictive trade practices impede

growth.


14/19

MOVEMENT OF CAPITAL

` Capital flows across countries have played an

important role in enhancing the production

base.

` Capital flows can take either the form of

foreign direct investment or portfolio

investment.

`

For developing countries the preferredalternative is foreign direct investment.


15/19

FINANCIAL FLOWS

`

The rapid development of thecapital market has been one of the

important features of the current

process of globalization.

`

The gross turnover in foreignexchange markets has been

extremely large.

` It is estimated that the gross

turnover is around $ 1.5 trillionper day worldwide


16/19

` Globalisation has intensified

interdependence and competition

between economies in the world

market.` This is reflected in Interdependence

in regard to trading in goods and

services and in movement of capital.

` As a result domestic economicdevelopments are not determined

entirely by domestic policies and

market conditions.


17/19

` Rather, they are influenced by both domestic and

international policies and economic conditions.

` It is thus clear that a globalising economy, while

formulating and evaluating its domestic policy

cannot afford to ignore the possible actions and

reactions of policies and developments in the rest of

the world.

` This constrained the policy option available to the

government which implies loss of policy autonomy to

some extent, in decision-making at the national level.


18/19

` Globalization provides a great

opportunity for entrepreneurial

ventures to expand their business

internationally.` Entrepreneurial enterprises are

able to confront the challenges

posed by globalization and

economic liberalization, to improvetheir competitiveness in the global

market, and better serve the global

consumers.


19/19

globalistion2 track1

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