Relationship between globalisation and industrialisation

relationship between globalisation and industrialisation

Link between Industrialization and Globalization The crucial relation between the rise of capitalism and the formation of nation states in. Globalisation offers the potential to raise economic growth rates significantly. inverted U-shaped curve in the relationship between industrialisation and. This study investigates the effect of the latest wave of economic globalization on relationship between development and productivity, and industrialization.

In later centuries world economy began to emerge as a single unit in which advanced regions were linked to the colonies by certain division of economic activity. These interactions may be described as a system of economic flows; trade, international payments, migration and capital transfer.

From industrial revolution onwards, world economy got more integrated and the regions became more dependent each other. Other processes -migration from Europe, development of trade, colonization- are likely to have contributed to the globalization less than what industrial revolution did.

For the world before had witnessed both great population movements and colonization. So colonization and population movements could not be evaluated as the prominent factors on globalization; rather they became significant with unprecedented outcome of industrialization. Without it European population migration could have remained as similar as to earlier population movements on the earth.

Effects of Globalization, Industrialization, Modernization and Urbanization in Modern Business

Link between Industrialization and Globalization As the review of history of industrialization demonstrates, the world has been undergoing to the globalization process at least for the last four centuries.

Before that time grand civilizations, empires and economy had remained confined to certain regions. Mesopotamian Civilization remained around the Tigress and Euphrates. Roman Empire controlled environs of Mediterranean. Silk Road trade was confined to the regions beginning from China and India through the south and the north of Caspian Sea to Mediterranean and Black Sea.

Neither of these big structures nor others was able to connect all parts of the world to each other in contrast to what we are experiencing today. There are different arguments attempting to explain the roots of this expansion -currently globalization. Fundamental social and political changes during reformation era, migration of Europeans to the new world, colonization of non-European territories, industrial revolution which incited the emergence of world capitalist economy and development of technological changes are all seen as the factors behind the globalization process.

If globalization phenomenon is described as a grand process, then former developments could be seen as steps to it. However, one should give special attention to industrialization in the explanation of the origins of globalization.

Chapter 5 Nature of Industrialisation in India after Independence (Ep 4)

When we come to the origins of industrial revolution, we see that drastic social and political changes in Europe in the 15th and 16th centuries opened the way to it. Reformation and enlightenment fundamentally transformed European societies whose consequences in economy paved the way for the rise of global market. Reformation decreased the power the Pope and led to national unifications, and enlightenment freed human reason from scholastic framework. The implications of these changes were so great, that is, innovations, new way of thought, development of physical sciences and the emergence of an unprecedented human adventure in history.

In anyway it could be argued that most prominent impetus of globalization process is the capitalist world economy which was incited by the industrial revolution. It created its own structures all over the world based on capitalist mode of production, whose main components are production, consumption, international trade, rivalry and wars among competing states.

While the motor of globalization is the capitalist world economy, its implications are currently felt in every field, such as culture, politics, society, environment, arts and way of life. But in this chapter we will limit ourselves to show close link between industrialization and globalization.

Beginning of overseas trade contributed to the development of navigation which created competition among European states. Internal wars in the 17th and 18th centuries were transferred to overseas rivalries. Spain, Portuguese, France, Netherlands and England were the main powers in this struggle.

Most of the European states created their own domestic market and established trade links between colonies and homeland. Creation of home market was the result of abolition of feudal privileges, granted to landlords over vassals and the church over its land.

Confiscation of soils of the church, liberation of vassals from the land and the undermining of guild system resulted in the emergence of a genuine home market. Because, both idle lands controlled by landlords and by the church and labor force were brought to the market.

Moreover, because dependency link between labor force and land was broken, men had to work more for subsistence. This created rising demand for primary products like food and clothing. However, it was very usual in that period that people did not need to work when they were provided with their basic needs. As done by Poor Law in England, wages were kept down to encourage people to work more for survival.

relationship between globalisation and industrialisation

Hard work furthermore resulted in more need to work. This was an enduring interaction between working more and more needs. In England, low wages resulted in lower cost of textile products and Englishmen began to export clothes first all over Europe then to the whole world.

Due to that fact textile industry was the first step of industrial revolution. Colonies at first instance were used to obtain raw material, particularly cotton. But as the industrial revolution resulted in increasing production, the importance of colonies increased once more as markets to export textile products.

New techniques in production process brought competition and were easily adopted by other European countries. The aim of domestic production soon exceeded the borders of home market, as the whole globe became the target of capitalists.


Innovations and inventions accelerated to reduce the production cost and to attain competitive prices. The crucial relation between the rise of capitalism and the formation of nation states in Europe is very important to understand the nature of globalization. The development of trade in the 17th and 18th centuries in Europe was accompanied by scientific outlook, state building and wars.

The usage of gunpowder helped central rulers to remove the local lords and reformation broke loyalty beyond national borders. To finance their wars rulers encouraged taxable activities, mainly trade and production of primary agricultural products.

Both development of capitalism and state building in Europe fed each other. Merchants, entrepreneurs, investors and bankers had sought for a secure area for profit and the rulers had needed taxable activities to finance their private armies. The aim of both parties overlapped following the 17th century. Nation states were formed and capitalism began to flourish. Capital gained a national character and states protected their capitalists by introducing high tariff barriers in newly industrializing countries, while industrialized countries like Britain forced the former ones to remove trade barriers.

The effects of Industrialization and globalisation.

At its early formation European states projected colonial foreign policies to facilitate the activities of their businessmen in overseas. However, after the late 19th century, centralized governments backed by standing armies and strong bureaucracy turned into absolutist regimes.

Moreover, as the capitalist investments began to enlarge and production increased, aim of capitalists went beyond the national market. The World War I could be seen a result of irreconcilable imperial policies of European countries, while the World War II partly was resulted from the character of national capitalism. In market globalization, the businesses are expanded to global market. Whereas, in production globalization the raw materials and resources used for producing goods are imported from various countries.

The more business partners and investment area are possible only with the help of globalization. There are also some negative impacts or negative effects of globalization in modern business. There is inequality in income. For an example, the same company delivers huge salary to the employees in the United States of America as compared to that running in India, Philippines, or Brazil.

It also affects the capital flow as the maximum generated profit is taken back to the parent country. Effects of Industrialization in Modern Business: It also plays an important role in modern business and leads to the urbanization. The industrialization is the basic element of any economy. It creates more job opportunities.

As a result, there is a huge rise in employment, improving the living standards of people. In any under developed or developing countries, the industrialization has a key role in the development of nation by utilizing best natural resources possible. The highly production of goods or products are generated with the help of machines and high scale equipment. If more production of goods is generated, more tax is collected by the government. The farmers can also sell the raw materials to the industries and earn money.

The effects of Industrialization and globalisation. - GCSE History - Marked by

The urbanization is mainly possible after the industrialization because people stay near industrial area. It raises the living standard by producing new and innovated materials and goods for human being. There are also some negative impacts of industrialization.

The unfair pay rates, working hours and labor disputes may affect the overall business. The lack of sanitation, pollution and health issues are other negative sides of the industrialization. Effects of Modernization in Modern Business: Modernization means the process of transformation from a tradition to a modern model. It is only possible with the introduction and use of information technology and other latest technologies. For an example, the banking industry nowadays uses various information systems, online transaction processing system, online transfer, electronic invoicing, electronic data interchange, online payment and many more facilities to the clients.

It helps the business values and functions. With the introduction of smart phones, advanced laptops, information systems and networking; it is easy to set a business strategy for generating huge amounts of profit and business networking.

relationship between globalisation and industrialisation

Using the Customer Relationship Management System, it is very beneficial to maintain a good relationship between the customer and the management of organization. As a result, there is a competitive advantage in the business. Importance of Modernization of Business: The modernization of business also means the proper strategy to allocate the budget and properly use of Customer Relationship Management System, Enterprise Resource Planning, and other Information System whether it is functional or cross functional management information system.

With the use of cloud computing, outsourcing and off shoring, it is possible to expand the market within or beyond the border. Nowadays, different companies with the same value function or structure merges with each other to become stronger in terms of capital or financial presence, expand wide market and gain high trust from the clients or customers due to overall transparency.