De-Globalization And Its Impact On Management Education

*K.Naga Raju

Abstract

Deglobalisation is the process of diminishing interdependence and integration between

certain units around the world, typically nation-states. It is widely used to describe the
periods of history when economic trade and investment between countries decline. It stands
in contrast to globalization, in which units become increasingly integrated over time, and
generally spans the time between periods of globalization.

The term of Deglobalisation has derived from some of the very profound change in many
developed nations, where trade as a proportion of total economic activity went down
between 1914 and 1970s. This decline refers that their economies become less integrated with
the rest of the world economies in spite of the deepening scope of economic globalization.
While as with globalization, it can refer to economic, trade, social, technological, cultural and
political dimensions, much of the work that has been conducted in the study of
deglobalization refers to the field of international economics.

Periods of deglobalization are seen as interesting comparators to other periods, such as 1850
1914 and 19502007, in which globalization had been the norm, given that globalization is
the norm for most people and thus even periods of stagnant international interaction are often
seen as periods of deglobalization. The Institute shows a clear break for economic
globalization in 2009: " The bursting of the dot com bubble and the events of 9/11 merely
slowed down the pace of globalization; the latest economic and financial crisis has, however,
created a severe setback for the globalization process" [2] In 2010, the standstill in the
globalization process basically continued but with different regional patterns: "The biggest
upward movement as a region occurred in South Asia (albeit a very minor increase) while
Latin America and Sub Saharan Africa saw a very minor decrease in their regional average.
High income countries and in particular OECD countries continue their trend
of stagnation which has started even before the current crisis.

Keywords: Deglobalisation, Economic Globalization, International Economics, Globalization

Process, Regional Average

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*K.Naga Raju, Assistant Professor, Department of Management Science, Sasi Institute of
Technology and Engineering, Affliated to JNTU (K) Tadepalligudem, India,
Mobile:9912382525, Email Id:nagarajuk@sasi.ac.in

INTRODUCTION

The race of globalization is leaving the majority of the worlds population far
behind.According to Unicef, the richest 20 percent of the population gets 83 percent of global
income, while the poorest quintile has just 1 percent. This trend is getting worse. A
newUNDP report called Humanity Divided estimates that 75 percent of the population
lives in societies where income distribution is less equal now than it was in the 1990s,
although global GDP ballooned from $22 trillion to $72 trillion.

For developing economies in Asia, the Gini coefficient which measures income inequality
on a scale from zero to one where one is worst rose from 0.33 in 1990 to 0.46 in 2010.

Inequality corresponds with greater economic uncertainty, lower investment and high social
tensions and political instability with the potential for violence and conflicts between
groups. It demolishes human rights for the vast majority, especially for vulnerable groups like
women, children and the elderly.

What causes inequality? The UNDP states, Specific aspects of globalization, such as
inadequately regulated financial integration and trade liberalization processes, whose benefits
have been distributed very unequally across and within countries, have played a significant
role in determining the upward trend observed over the last decades.

Globalization causes inequality for various reasons. One is that trade and financial
globalization have weakened the bargaining position of relatively immobile labor in relation
to fully mobile capital, driving down wages. The chief economist of the Asian Development
Bank, in an article that argues that inequality jeopardizes economic growth, notes that
between the mid-1990s and the mid-2000s, labor income as a percentage of manufacturing
output fell from 48 percent to 42 percent in China and from 37 percent to 22 percent in India.

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The UNDP also says dependence on capital flows made countries more vulnerable to
economic and financial shocks, causing lower growth and employment, which both
disproportionately affect the poor.

If globalization drives inequality, what are the remedies? The usual list of cures from UN
agencies, the World Bank and IMF include measures to stop tax evasion, more progressive
income tax policies, incentives for foreign investment, conditional cash transfers, subsidies
and credits for small businesses and agriculture, limited expansion of public investment and
social safety nets.

Two key things are apparent in these remedies. First, they talk about redistributing income,
but dont address unequal access to sources of wealth, such as land or assets. They also avoid
mentioning examples of nationalizations that have reduced extreme inequality in some
countries.

Second, they dont deal with the process of globalization. The most ambitious among them
suggest some kind of regulation of speculative financial markets to minimize volatility. The
World Bank clearly states that measures to reduce inequality should not affect free trade.

The measures to combat inequality touted by international financial institutions ignore the
structural causes of inequality. Dont be fooled by their fashionable new name: inclusive
growth. This idea repeats old remedies and is more concerned with profit than inequality.

If we care about reducing inequality, we must seek new solutions to the problem. One
approach is deglobalization, a proposal developed by Walden Bello and Focus on the
Global South in response to the Asian financial crisis of 1997.

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Focus on the Global South wrote:

Deglobalization is not a synonym for withdrawing from the world economy. It means a
process of restructuring the world economic and political system so that the latter builds the
capacity of local and national economies instead of degrading it. Deglobalization means the
transformation of a global economy from one integrated around the needs of transnational
corporations to one integrated around the needs of peoples, nations and communities.

For deglobalisation, there is no one size fits all model like neoliberalism or centralized
bureaucratic socialism. Instead, according to this scheme, diversity is expected and
encouraged, as it is in nature.

Deglobalization:

Deglobalization is the process of diminishing interdependence and integration between

certain units around the world, typically nation-states. It is widely used to describe the
periods of history when economic trade and investment between countries decline. It stands
in contrast to globalization, in which units become increasingly integrated over time, and
generally spans the time between periods of globalization. The term of deglobalization has
derived from some of the very profound change in many developed nations, where trade as a
proportion of total economic activity went down between 1914 to 1970s. This decline refers
that their economies become less integrated with the rest of the world economies in spite of
the deepening scope of economic globalization. While as with globalization, it can refer to
economic, trade, social, technological, cultural and political dimensions, much of the work
that has been conducted in the study of deglobalization refers to the field of international
economics. Periods of deglobalization are seen as interesting comparators to other periods,
such as 18501914 and 19502007, in which globalization had been the norm, given that
globalization is the norm for most people and thus even periods of stagnant international
interaction are often seen as periods of deglobalization.

The globalization index of KOF Swiss Economic Institute shows a clear break for economic
globalization in 2009: " The bursting of the dot com bubble and the events of 9/11 merely
slowed down the pace of globalization; the latest economic and financial crisis has, however,
created a severe setback for the globalization process" In 2010, the standstill in the
globalization process basically continued but with different regional patterns: "The biggest
upward movement as a region occurred in South Asia while Latin America and Sub Saharan

4
 Africa saw a very minor decrease in their regional average. High income countries and in
particular OECD countries continue their trend of stagnation which has started even before
the current crisis."

The dream of all proponents of world trade without barriers came much closer to its
fulfillment when the World Trade Organization (WTO) was finally brought into existence in
Marrakech, Morocco, as a result of the `Uruguay Round1 of multilateral trade negotiations
between national governments, taking place from 1986 till 1994.

The WTO agreement was signed on 15 April 1994 and entered into force on 1 January 1995.
Together with the General Agreement on Trade and Tariffs (GATT), existing since 1947 and
dealing with goods, two more agreements are now administered by the WTO: the General
Agreement on Trade in Services (GATS) and the Trade-Related Aspects of Intellectual
Property Rights (TRIPS). As a result of the Uruguay Round a range of service sectors were
selected for further liberalization including educational services. The main objective of GATS
remains the same as it has been for GATT - progressive liberalization should be achieved
through subsequent rounds of negotiations. During these negotiations the WTO member
states are expected to take on various levels of obligations to reduce barriers in respective
service sectors.

Some key proposals of deglobalization to really address the relationship between

globalization and inequality are:

Reorient national economies away from export production and toward production for
the local market to fulfill basic human needs, relying primarily on domestic resources and
employing technologies that enhance rather than destroy the community, the environment and
life itself.

Implement policies that redistribute the sources of income and wealth such as land,
ensuring domestic control over key sectors of the economy and promoting communal access
to basic services like water, health care and education.

Provide more resources to rural areas to halt the migrations that increase inequality
and rob local communities through resource grabbing.

This means expanding public services in rural areas and implementing tools to boost
food sovereignty that have been developed by peasants and indigenous communities.

De-emphasise economic growth based on the recognition that this growth has limits.

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 Instead, we should maximise equity and redistribute what is available and possible
without breaking the vital cycles of nature and overshooting the carrying capacity of the
Earth.

Make strategic economic decisions subject to democratic choice, rather than leaving
them to the market. In other words, bring participatory democracy to the sphere of the
economy.

We examine strategic options for business schools, noting that within the next 1020 years,
major changes in the demand and supply of education are likely. Management educators need
to develop careful strategies that consider the drivers of change such as globalization,
disruptive technologies, demographic shifts, and deregulation. We compare industry
transformations in healthcare, financial services, and the airlines with the developing
situation in management education; suggest changes to strategic elements of management
education industry, such as its primary markets, products, and partnerships; and discuss the
implications of such changes.

Globalization is regarded as an overwhelming tendency which can bring about great benefits
and freedom to nowadays market. However, de-globalization was addressed by many writers
since the world is full of uncertainty and unpredictable changes. HR, as a strategic tool for
multinational firms, should play an active role in the preparation for the possible coming de-
globalization. HR should be active to improve its strategy, policies, and practices to guarantee
the competency of company in this changeable environment.

Measures of deglobalization

As with globalization, economic deglobalization can be measured in different ways. These

centre around the four main economic flows:

Goods and services, e.g. exports plus imports as a proportion of national income or
per head of population.

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 Labour/people, e.g. net migration rates; inward or outward migration flows, weighted
by population (and resultant remittances in per cent of GDP)

Capital, e.g. inward or outward direct investment as a proportion of national income

or per head of population

It is generally not thought possible to measure deglobalization through lack of flows of

technology, the fourth main flow. Those areas that are measurable do suggest other possible
measures, including:

Average tariffs

Border restrictions on labour

Restrictions on foreign direct investment or outward direct investment

One of the prominent examples of deglobalization movement could be found in the United
States of America, where the Bush and Obama administration instituted Buy American
Act clause as party of massive stimulus package, which was designed to favor American-
made goods over traded goods. Likewise, the EU has imposed new subsidies to protect their
agricultural sectors for their own protection. These movements of deglobalization are can be
seen as the example of how developed nations react to the Financial crisis of 2007
08 through deglobalization movements.

Risks of deglobalization

Typically a reduction of the level of international integration of economies (and the world
economy at large) are expected to exert second round effects related to four feedback
mechanisms:

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 a reduction of (the rate of growth) of international trade will feed negatively into to
long-run growth

a loss of interaction, the co-movement of economies,

trade policy feedbacks in the sense that reduced international interaction and lower
growth will stimulate protectionism and non-economic issue areas where reduced
cooperation among countries and even an increasing risk of international conflict can be
expected.

Globalization and Education Globalization has a close relation with education. As education
has an important place in shaping a society, it has to be connected with globalization and the
global activities have a deep impact on education. Globalization of the world economies is
leading to increased emphasis on internationalization of the curriculum. It also contributes to
opportunities for new partnerships in research and teaching with agencies and institutions
across the globe (Twigg and Oblinger, 1996). Globalization is one of several powerful
worldwide forces that are transforming the basis of business competition, paradoxically
harkening an era in which small, local communities of practice may become a preminent
structural form. Communities of practice enable organizations to build, share and apply the
deep level of competence required to compete in a knowledge-based global economy
(Drucker, 1993).

Humanity lives an increasingly and rapid change in every area. Social, economic and cultural
values are forced new challenges. With the concept of globalization a lot of changes are
expected in the field of education. Traditional structure of the education has to be changed.
One of the main duties of schools is to enhance the individuals appropriateness for the rapid
changes. As Benking (1997) remarks today universities and other institutions are redoubling
their efforts to respond to social change. They have to implement societys expectations.
Gordon (1999) outlines the importance of higher education in the learning society by

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attributing the report of the National Committee of Inquiry into Higher Education as follows:
Higher education is fundamental to the social, economic and cultural health of the nation.

It will contribute not only through the intellectual development of students and by equipping
them for work, but also by adding to the worlds store of knowledge and understanding,
fostering culture for its own sake, and promoting the values that characterize higher
education: respect for evidence; respect for individuals and their views and the search for
truth. Equally, part of its task will be to accept a duty of care for the well being of our
democratic civilization, based on respect for the individual and respect by the individual for
the conventions and laws which provide the basis of a civilized society. In the future
universities and other institutions are not thought only for the young. They are expected to
become more open to people of all ages who wish to further their education. Universities and
other institutions will be open to anyone who has acquired the motivation to learn and the
ability to perceive issues through social experience or 138 A Critical Examination of
Globalization... involvement in volunteer and other activities. Besides, an increase in the
number of students, both part-time and full-time, is expected and this is thought to lead to the
formation of an academic environment with greater depth. Graduate study is also likely to
become more available to nonacademic members of society. As higher education is an
investment in human progress and prosperity, during rapid social and economic change, it is
especially important that universities and other institutions of higher education consider their
contribution to society from a broad, long-term perspective (Ministry of Education, Science,
Sports and Culture, 1995).

A FRAMEWORK FOR CREATING A GLOBAL APPROACH TO HIGHER EDUCATION

In the light of earlier discussion, it is clear that current short-term and under-resourced efforts
to engender a more international focus at South African universities are not sustainable.
Isolated approaches to globalising higher education will not work. A more concerted and
integrated focus on establishing a fully-fledged strategic globalisation strategy for a
university is needed . The success of the global higher education strategy depends on two key
factors informing the process phases and interfacing in a reciprocal relationship with the four
phases of the framework, that is, the creation and growth of a true global university culture

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which is required, and involves transcending the current city, provincial or national model
used in South Africa.

This implies a global mindset among all staff in reaching out to the global world, beginning
with the rest of Africa, and then, expanding into the rest of the world. In addition, a
significant resource allocation is needed to ensure that the university transforms its current
city, provincial and national focus to become global. A fully integrated global university
requires substantial investment in the creating and maintenance of global infrastructure,
curriculum, staff exchange programmes, bursaries, appointing of international staff,
accommodation and travelling, and many other cost items.

Should the mentioned two prerequisites be put in place, an enabling environment

iscreased for the four phases of the framework to be implemented thus:

Phase 1: Global strategic intent In the first phase, the university will register its intent to
become more global in its thinking, approach to teaching, curriculum and research. Typically,
the university will generate or refine a more global vision and mission, and will set some
goals in terms of a regional focus (for example, the strong African regional intent expressed
by UJ and Unisa).This phase also includes a proper global and regional environmental
scanning of the higher education landscape and typically concludes with an outline of global
challenges and opportunities.

Phase 2: Craft global higher education strategy Secondly, the university will craft its global
higher education strategy. Clear goals and objectives will be set during this stage, in other
words, what the university wants to achieve with its globalisation strategy. During this phase,
it is critical to clearly show the difference between the status quo and future goals

Conclusion

The present nationalistic modes of quality assurance, including institutional and

programmatic accreditation will inevitably have to work in conjunction and/or give way to
global forms of public protection and educational quality. For serving the global market, it is

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important that the overall quality and standards of education available in a country must
conform to certain thresh hold levels to become internationally acceptable. At the same time
one has to realize that doing more or better of what one has been doing all along may not be
enough to be accepted as international education. There must be a certain elements of
educational provisions and the institutional basic infrastructure to make the grade as the
provider of education for the international clientele.

Many institutions are using several generic strategies for this purpose. Implementation of
certain activities such as reorienting the curriculum focusing on the international needs and
expectations, students and faculty exchanges, technical assistance from others to raise up
beyond the national standards and having international students in the campuses to enhance
the international ambience for the education they offer are some specific examples.
Likewise, emphasis on the development of new skills, knowledge, attitudes and values in
students and faculty that will lead to the development of certain identified global/international
competencies, promotion of international/intercultural activities in the campus must be given
priority. These may be implemented through either integration or infusion into teaching,
research and services related activities. These initiatives should be backed up and supported
by appropriate policies and processes at the institutional and/or at government level.

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