Introduction
The spread and severity of Covid-19 have proved to be the perfect foil to re-ignite fears about open borders and stretched out supply chains
India’s Position on Globalisation with Aatmanirbhar Bharat
In his May 12 address to the nation the PM made it clear that an Atmanirbhar Bharat wouldn’t be ‘self-absorbed’ but would rather integrate within the global economy. ‘Build local to go global’ is the motto.
China and Globalisation
- China has prospered the most from globalisation. Its success was built on the ‘just-in-time’ supply chain model that funnels cheap exports and components to thousands of businesses globally.
- Because of the pandemic induced lockdowns, these supply chains are today disrupted, endangering businesses and livelihoods around the world.
- The effects are even being felt in India where many sectors have ground to a halt for the want of supplies.
- According to a report by Fitch Ratings, manufacturers in India rely on China for 60% of their electronic components.
- India’s drug regulatory authority says more than half of the active ingredients needed to manufacture antibiotics, vitamins, hormones and steroids come from China.
Way Forward
- The anticipated withdrawal of multinationals from China or the de-linking of supply chains that circumnavigate the globe has not yet happened.
- So, if India is to step into the breach and become an alternative global manufacturer, announcing reforms alone won’t be enough: Clinical implementation of policy prescriptions will be key.
- Only then can India hope to provide the industrious efficiency of Chinese manufacturing and its syncopated just-in-time supply chains to business investors.
Background
Waves of Globalization
- Globalization 1.0
- It was pre-World War I globalization, which was launched by a historic drop in trade costs.
- This globalization came with almost no government support.
- There was no global governance.
- Globalization 2.0
- It is the post-World War II phase where trade in goods was combined with complimentary domestic policies.
- The market was in charge of efficiency while the government was in charge of justice.
- It saw the establishment of institute-based, rule-based international governance, specifically the UN, IMF, World Bank, GATT/WTO, International Labor Organization etc.
- Globalization 3.0
- It created a new world of manufacturing in which high-tech was combined with low wages.
- This was achieved through establishment of global supply chains as factories crossed international borders.
- It was variously called New Globalization, Hyper globalization, Global value chain evolution.
Globalization 4.0
- Globalization is a phenomenon driven by technology and the movement of ideas, people, and goods.
- Globalization 4.0 is latest stage of globalization which involves cutting-edge new technologies like artificial intelligence that powers forward with the explosion of information technology.
- These technologies shrink distances, open up borders and minds and bring people all across the globe closer together.
Industry 4.0 is different from Globalization 4.0.
Industry 4.0
- Building on the foundation given by the Third Industrial Revolution, Fourth Industrial Revolution (Industry 4.0) is moving from an electronic based industry to a process which is the combination of human beings and electronics.
- It includes cyber-physical systems, the Internet of things, big data analytics, cloud computing, cognitive computing, artificial intelligence, 3-D printing, and autonomous vehicles etc.
-Source: Times of India
