Changes of Global Economy

International business has been sharply increasing since the middle of the twentieth century.  It means after World War II almost all of countries in the world change their economies system. Asian economies greatly grow when those country began to manufacture and sell goods to the West. The rise of the Asian economies exactly Japanese make their industries get in international trade. At the same time, both of Europe and North American economies became more integrated.

Since then, a number of factors appear and caused international business changes. One of them is rapidly development of telecommunications. The telecommunications boom immediately open new era of international business competition. The period was marked by the founding of a group of new internet-based companies commonly referred to as dot-coms. That thing cause the world to be encircled many times over optical fiber that can be used for data and voice communications. Since that, optical fiber  was largely underutilized and could be purchased for public. Cheap telecommunications enabled people world wide to participate in the global economy. Before internet take part in the global economy, peoples need to migrate to other country when they want to market their product directly and it has limited access. Today, that same people can market even sell their products or services over the Internet without leaving home. With easier access and cheap telecommunications too, global economy became more open to the world. Now, more of 3 billion peoples have been added to the world economy. Not all of those people can’t speak English, and the more ironic was not all of them are well enough educated to participate in the world economy.

This globalization has affect to almost of business structure in the world. In industry structure, almost of every industries structure has changed. Such as used of internet in supplier-customer relation. Suppliers have to reach a wider range of customer, and customers  have to consider a wider range of vendors. With available information on the internet, customer can more easily learn of substitutions. For suppliers, internet make them easier to market their product to public. In the other hand, global economy will quickly increase the rivalry by increasing product and new entrants, and by  accelerating the flow of information about the price, product, availability, and service. 

Sidiq Affandi

Sampoerna School of Business

Management 2011

sidiq.affandi@student.ssb.ac.id