Although the terms "globalisation" and "internationalisation" are sometimes used interchangeably to describe economic, political and or cultural activities throughout the world, there are several key differences between the two words. The term globalisation is consistently utilised to describe the dramatic changes the world is undergoing, as new technology and modern economics have led to increasingly interconnected economies and cultures; internationalisation more often refers to specific, economic activities certain firms or nations are undertaking internationally.
Economics and Global Trade
The term globalisation came into wider use in the late 20th century, as advances in telecommunications, transportation methods and the widespread enactment of free trade agreements and financial deregulation increased international trade and foreign investment throughout the world. In particular, following the collapse of the Soviet Union, many nations and international organisations, like the World Trade Organization and the International Monetary Fund, supported free market initiatives that diminished the economic role of each nation-state to, in turn, foster a more interdependent, globalised economy.
Internationalisation, however, does not specifically refer to the universal processes of globalisation that has reduced the economic independence of most nations. Rather, internationalisation often is cited to refer to specific economic activities countries may undertake internationally, like signing a trade agreement to address or promote economic relations between two or more nations. In other words, internationalisation does not necessarily refer to the economic liberalisation and financial deregulation that has accompanied globalisation.
Firms and Businesses
While globalisation more often is utilised to refer to the liberalisation and increasing interdependence of the global economy, internationalisation is sometimes used to describe the commercial activities of firms and businesses internationally. For example, the term internationalisation may encompass a discussion regarding the attempts of an American business to sell its products overseas, why it is doing so and what the resulting effects might be. Internationalisation is also often utilised to describe the process firms or businesses undertake to standardise their product or services for sale and use internationally.
Society and Culture
In addition to the economic effects of globalisation, the term is also used to describe the closer social and cultural ties many nations share. Because of products being traded internationally, improvements in telecommunications, worker migration from nation to nation and increased tourism, the customs, values and ideas of each nation are increasingly being disseminated throughout the world. Some have argued, however, that due to the economic strength of the developed nations and corporations in Europe and North America, globalisation has in fact been dominated by the spread of Western culture, values and politics.
In contrast, the term internationalisation does not refer to an increasingly homogeneous or global culture, but rather, denotes cultural or social relations citizens may be making internationally.
Although globalisation is widely considered to be an inevitable process, which due to the advancements of modern civilisation entrenches socioeconomic prosperity globally, some critics argue internationalisation as a better alternative. According to their arguments, globalisation has been forced upon certain countries, particularly those in the developing world, and has reduced the independence of these nations for the political and economic gain of others. Internationalisation, the critics believe, is more balanced, as it allows each nation to dictate the terms of its international agreements.
- Business Teacher: Globalization / Internationalization
- Global Policy Forum: Globalization vs. Internationalisation
- Business Teacher: How is Globalisation Distinct from Internationalisation? Are Such Distinctions Necessary?
- University of St. Andrews: Theories of International Trade, Foreign Direct Investment and Firm Internationalization: a Critique
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