With the onset of globalization and liberalization encompassing almost every industry of the world, industries are gradually opening up on the world stage from the narrow confines of its national boundaries. The firms operating in the industries now have to take production decisions depending on global demand and market conditions and depending on the economic scenario in world markets.
The term global industry specifically means an industry where a firm’s competitive position in one country is affected by its position in other countries and the reverse is also true. The industries exhibiting global pattern in today’s world include automobiles, television sets, commercial aircrafts and boats, sporting equipment, watches, clothing, semiconductors, copiers and also the transfer of funds.
The basic features of the global industry include the interconnection of communication networks and databases around the world, which in turn, leads to the Global Information Infrastructure or GII. The fast spreading of information regarding supply and demand in one market quickly gets transferred to the other world markets using the computers and satellites of today.
The key industries where the marks of global industry behaviour are felt include:
The Energy Sector: With increasing world oil prices having a decelerating effect on the prospects of growth of both the developing and the developed countries, the nations are looking for alternative and renewable sources of energy. Wind energy, tidal energy as well as solar energy are some of the viable options which can be checked out. It should be noted that after the oil price rise of 1973, global oil prices once again showed an upward trend recently reaching up to $70 a barrel.
Financial services: and are going global these days. Many multinational and foreign banks as well as insurance companies have opened their branches in less developed countries in East and South Asia. Automobiles: The automobile industry has been a global industry for sometime now. Germany remains one of the prime exporters of automobiles across the world as is also the USA and UK. Developing nations and many East European countries are ready importers of these vehicles and the position of the automobile industry is significantly affected by their market shares in the different countries.
Education: With foreign universities opening shop in less developed countries like India and China, there has been a globalization of world education in many ways. The education sector in many of these less developed economies is being improved as a result of competition from these institutions.
Retail and consumer goods: This is probably the biggest sector which can define the globalization of industry. Shopping malls with consumer-packaged goods from abroad are flooding the domestic of any country. That the retail sector going the global way is evident from imported textiles readily available and various packed foods marketed throughout the world.
In addition, the transport sector is taking the shape of a global industry. Apart from the automobile industry, various novel transportation facilities are being introduced in the third world of which Light Rail Transit system is an example.
Lastly, with the rise of the BPO (Business Process Outsourcing) as well as the KPO or the Knowledge Process Outsourcing, the world is getting smaller. BPO companies operating in the less developed economies as an operational branch of the parent concern in the developed world are helping the industries to attain a global character.
Globalization of industry or a Global Industry can help in the comprehensive development and growth of the world as a whole and integrate it by transferring technological invention or innovation in a transparent and cost-effective manner.