Over the last few decades, there has been a rapid transformation of the global economy whereby business firms have been forced to compete at a global level in order to survive. The global trends have been very influential in the development of the global economies, the major beneficiaries being the less developed countries who have been seen to be experiencing a high growth rate (Simmons, Dobbin and Garrett, 2008, p. 4). The emergence of the transnational and multinational corporations has been instrumental in the flow of capital around the world, not forgetting the impact they have had on the political, social and technological transformation of the world economies. In fact, the rapid growth of the South East Asia countries has given clear indications of how macro forces can influence the development of nations. However, the global trends have also been associated with negative effects on the performance and implementation of national policies, especially in the developing nations.
Globalization, which is one of the most significant forces in internationalization, has allowed countries to be interconnected to the extent that it is difficult for one particular country to make national decisions without incorporating the influence of the macro forces. Indeed, macro forces including political, technological, economic, political, demographic, ethical, legal, and environmental have been the key influences in the strategic policy making in any given nation. For instance, these macro forces have affected national trends in trade, education, health, agriculture, labor mobility and migration and so on.
The macro forces influence on international trade has led to innovative business practices as well as national structure realignments to adapt to the ever changing macro environment. Indeed, Bartllet and Ghoshal (2002, p. 6) claims that the macro forces including technological, social and economic have combined to form a global market place where companies must capture global-scale economies in order to survive the competition. Different countries will be affected by the macro forces differently depending on the level of integration and the extent to which the organizational development takes root in the country. This paper will discuss the effect of the macro forces on the national trends based on the social, technological, economic, environmental, political, legal and ethical economic analysis tool.
The influence of macro forces on the national trends may be clearly explained by relating the dependent and independent variable in the global economy. The international transaction costs have been greatly influenced by the globalization of trade, leading to efficient financial flow and competitive goods prices (Keohane and Milner, 1996, p. 26). Moreover, the advancement of technology has not only led to the faster movement of goods in the international market due to efficient modes of transport, but also to the development of local infrastructure and financial markets that influence efficiency in production. Most international economies have realized the importance of market competition and therefore have allowed their policies, especially the monetary policies and other trade policies to be flexible in order to enhance production efficiency thus helping the global market economies to enjoy the economies of scale.
The political interconnection between the global economies has led to countries around the globe to be extra vigilant when making certain national decisions. The most affected countries are the developing countries that tend to rely on developed countries’ political influences when making important national decisions. The struggle for global supremacy has intensified which has tended to extend to the national boundaries where micro forces have been established to counter the macro forces influences (Mazarr, 1999, p154); for example, the Taliban in Afghanistan. This has eroded the political stability in most of the nations with these sorts of micro violent groups. With the advancement of technology, the operation of these groups has gone hi-tech leading other forms crime to take root such as computer fraud and contraband.
National regulatory framework and tax decisions have greatly been influenced by the global trends. For instance, although different countries have different regulations and tax policies governing trade, the political interdependence influences the adjustment of such policies to suit the nation’s competitive trend in the global economy. The non-conformity to the global political trends may lead to a country’s loss of political grip on the global economy. For example, the political differences between the US and Libya or Zimbabwe has seen the two countries given restrictive bans to trade with the US and some of its allies.
Social forces including the demographic trends have been instrumental in influencing the national trends. The world population has been on the upward trend for many years, with the developing countries experiencing some of the highest growth rates. The impact of this is straining the national resources and increased unemployment. This has seen the influx of migration of people from less developed countries to first world countries in search of employment opportunities and better living conditions (Grantham, Ware and Williamson, 2007, p. 94). In most cases, the migration involves skilled labor mobility where the developing countries are likely to lose the vital skilled manpower to turn around the economies. On the other hand, the immigrants create a competitive labor market in the developed countries and to some extent dethroning the locals from gainful employment as they tend to readily accept low wages. To counter this, Keohane and Milner (1996, p. 26) are on the view that countries that experience high labor mobility in the global economy tend to react through increasing trade and capital mobility. The trend in population growth has and is going to affect the poor nations more than the developed countries since their birth rate is relatively higher, they have poor health facilities and therefore the population is likely to suffer from disease and a lower expectancy rate. However, according to the National Intelligence Council (2008), the rapid growth witnessed in the developing countries coupled by industrialization will assist in curbing unemployment and reducing the number of youth related crimes.
Global economic forces have had significant effect on the national economic and markets stability. The liberalization of trade has seen the monetary policies becoming more volatile driven by competitive global financial markets. In addition, the instability in the money markets has been influencing the fluctuation exchange rates to an extent of creating imbalance in trade among various countries. This volatility in exchange rate has created a challenge to the individual countries to control their currencies as well as other financial tools. The globalization of the currency has led to global economies to embrace the spirit of interconnectivity otherwise the country will find itself in an economic vacuum. One notable example of the effect of financial market conformity according to Allen (1999, 111) is the case of France when it decided to alienate itself from the global economy only to experience the worst monetary problems in its history that resulted to a sharp devaluation of its currency. However, the integration of the world economies may also negatively affect the national economic trends negatively especially when the whole global economy is experiencing economic problems. For instance, when the global economy is experiencing recession as has been the case in the last two years, all countries will to some extent experience financial difficulties, the result of which is increase in unemployment and poor economic performance.
The 21st century is the era of automation whereby technological advancement is being applied in all sectors of the national economy. For the national trends to thrive, the individual national economy should embracive the changes in technology otherwise it will lag behind in development. Indeed the interconnectivity between the world economies has been driven by technological advancement. For instance, the logistics sector has experienced a major boost especially in modernization of the air travel, making movement around the world faster and convenient. The effect of this is the endowment of individual economies with increased tourism traffic and a major boost to the national economy (Lewis, 2003). Moreover, technological empowerment and enhance mobility will enhance cultural diversity. However, such interdependence may prove to be fatal in the long run as it may give birth to imperialism where one savvy culture may force its way to dominate other cultures (Power, 2000, p. 152).
The world food supply has increased in the recent years, thanks to technology. The national trends in agriculture have been greatly influenced by technology whereby there has been increased commercialization of agriculture leading to efficient production. Genetic technology has also been incorporated in agriculture with the genetically modified crops, which are generally high yielding, fast maturing and disease resistant gaining popularity with time (The Shift of Land, n.d). Despite this positive effective, many cultures, especially in the developing countries have shown resistance in accommodating this trend as they view it as a move to eliminate the indigenous crops that are healthier than the GMOs. However, some countries like India have accepted the new technology, commonly referred to as green revolution and view it as one of the best channels to alleviate poverty.
Another handle in commercialization of agriculture is the view that it forms part of exploitation of the poor countries by the developed countries, especially where there is view of replacing the labor intensive production to capital intensive production. One example was witnessed somewhere in Africa where introduction of tea picking machine triggered a lot of protest from the local community. Globalization also goes hand in hand with urbanization according to Aron and Patz (2001, p. 121) which is one of the poverty fueling factors in most less developed countries.
The environment in which all the national trends take place creates a significant influence on the micro forces. For the last few decades, environmental sustainability has been one of the controversial subjects. Global trends especially the emergences of transnational corporations have significantly affected the environment with pollution (both water and air) and ecological degradation being the two most talked about subjects. The influential powers exhibited by the transnational and the multinational corporations make some national economies especially in less developed countries to vulnerable to environmental abuse as they lack adequate muscle to fight the corporations. Human activities especially due to deprived information or knowledge have also been detrimental to the environment making it difficult for the government to make informed and all inclusive decisions (Bissio, 2009, p. 4). According to Fraser and Stringer (2009) socioeconomic and political forces have been influential factors in ecological destruction especially where there is uncontrolled influx of people moving to the forested areas and poor environmental policies. Indeed, according to Schneider (1990, p. 197) the activity of people which lead to emission of greenhouse gases have led to the dramatic climatic changes in form of global warming. However, environmental activists have been very active campaigning for sustainable development, whose on positive impact is the signing of the Kyoto protocol.
Different countries will experience these forces differently since they are not equally endowed. Although macro forces seem to have affected some countries especially the developing countries positively, the over reliance of the developing countries on the foreign inflows has made them vulnerable such that when the transnational come to the country, they make good profit but repatriate them to their home country leaving the poor nations more poor and the gap between them and the rich nations keeps widening. For instance, countries in the sub-Saharan Africa are economically disadvantaged and are likely to be more affected by diseases, internal strife and the current economic crisis (Patel, 2009).
The national trends or the micro forces have been greatly affected by the macro forces which include political, economic, and social and technology as well as environmental and legal forces for a long time. The trends in the global economy have interconnected the world economies making them more interdependent, a factor that has been influential in the performance of the micro force in individual economies.
Allen, R. E. (1999). Financial crises and recession in the global economy. Cheltenham, Edward Elgar Publishing.
Aron, J. L. and Patz, J. (2001). Ecosystem change and public health: a global perspective. Maryland, JHU Press.
Bartlett, C. A. and Ghoshal, S. (2002). Managing Across Borders: The Transnational Solution. Harvard Business Press.
Bissio, R. (2009). Diversity, Globalization, and the Ways of Nature. The international development and research centre. Web.
Grantham, C. E. et al. (2007). Corporate agility: a revolutionary new model for competing in a flat world. NY, AMACOM Div American Mgmt Assn.
Keohane, R. O. and Milner, H. V. (1996). Internationalization and domestic politics. Cambridge, Cambridge University Press.
Lewis, R. D. (2003). The Cultural Imperative: Global Trends in the 21st Century. MA, Intercultural Press.
Mazarr, M. J. (1999). Global trends 2005: an owner’s manual for the next decade. NY, Palgrave Macmillan.
National Intelligence Council. (2008). Global Trends 2025: A transformed World. Web.
Patel, M. (2009).The WTM Global Trends Report Identifies Post-Recession Trends. Web.
Power, C. N. (2000). Global Trends in Education. International Educational Journal, Vol. 1 No. 3. Web.
Schneider, S. H. (1990). Global warming: are we entering the greenhouse century? James Clarke & Co.
The Shift of Land. The Shift of Land: National & Global Trends. Web.
Simmons, B. et al. (2008). The global diffusion of markets and democracy. Cambridge, Cambridge University Press.