Political and cultural systems

In general… six themes — globalisation, evolution, deflation, demographics, competition, and politics – form the basis for the offshoring mega-trend. (Robinson, Kalakota 2005) Globalisation is the integration of economic, political, and cultural systems across the globe. The term ‘globalisation’ commonly implies economic globalisation, and is used in a descriptive sense to point at the increased international integration of trade, investment and finance. It is also employed in a prescriptive sense to denote a response to promote further integration, and the policies that follow from there.

Globalisation is creating a world that is becoming ever more closely knit by flows of trade and finance. It signifies the process of shrinkage of economic distances (i. e. , costs of doing business) between nations. The direct and indirect impact of globalisation in all walks of our life is inescapable. Globalisation has been defined as the acceleration and intensification of interaction and integration among the people, companies, and governments of different nations (Rothenberg, 2003). Globalisation already exists almost ubiquitously, and its presence can be felt in many big and small things all around us.

Although globalisation has emerged as an overarching phenomenon worldwide only in the past 10 to 15 years, it is no passing trend. Globalisation is a historical, economic and a cultural imperative and its impact is going to be felt more and more in our lives, as the modern technology makes the world shrink ever further. Though there is a long way to go yet before many kinds of barriers to economic globalisation come down, the world is entering into a new era of productive efficiency and prosperity, owing to the powerful forces of globalisation that are shaping it.

While many see globalisation as a movement for economic growth, prosperity, and democratic freedom, there are others who consider it as a major factor in environmental devastation, exploitation of the developing world, loss of jobs in the industrialised nations, and suppression of human rights. The process of globalisation definitely has its seamy side, but in the end the simple fact is that globalisation makes us richer — or makes enough of us richer to make the whole process worthwhile. (Micklethwait & Wooldridge 2004).

Even if not in the short run sometimes, everyone is bound to benefit from it in the long run, the supporters of globalisation argue. Their logic typically follows these lines: To begin with, economic globalisation clearly benefits producers and corporations by giving them greater choice over their raw materials, production techniques, human talent, as well as all markets where they sell their goods. When efficiency is thus increased it leads to prosperity. Increased international trade makes us wealthier, allowing us to lead richer and more diverse lifestyles (E-cyclopedia 2000).

Despite its numerous possible negative aspects, especially the current trend of job losses due to outsourcing which is causing much resentment in the public, there is no doubt that globalisation is a positive force promoting economic growth, prosperity and the higher ideals of democracy, besides freedom and a sense of oneness among the nations of the world. Outsourcing is not a threat to this nation's economy – it is an opportunity to raise American paychecks, productivity, and prosperity.

It's an opportunity we will squander if we let the alarmists stampede us into boneheaded solutions. – Joh Castellani, president of the The Business (Quoted in Brown, Wilson 2005) On the other side of the equation, people sometimes feel that globalisation is a form neo-colonialism, where developed countries benefit at the expense of developed countries. However, this may be a wrong perception too.

Oftener than not, people, economies, and nations on both ends of the globalisation process benefit. A McKinsey study on the impact of globalisation states that: Through the application of capital, technology and a range of skills, multinational companies' overseas investments have created positive economic value in host countries, across different industries and within different policy regimes. In 13 out of 14 case studies, we found the impact overall to be positive or very positive (McKinsey 2003).