Globalized market players, dimensions, and value chain

Globalized market: players, dimensions, and value chain

Globalization is a worldwide phenomenon that we can attribute its beginnings to the industrial age. Also to the need to diversify markets to market the products. But its consolidation is obtained with the rise of technology and the development of communications. Hence the impact of the globalized market on import and export economies.

Globalized market players

When we speak of a globalized market, we find actors who fulfill very specific roles and whose nature is diverse. This allows a scenario to be outlined that transcends traditional structures in terms of governance, organization, and regulatory framework.

In this order of ideas, the following actors are identified at a first glance:

  • The State: the concept of state evolves to respond to the integration needs relevant to the new emerging market. Structures are developed that are supported by the countries involved but whose area of action is greater.
  • The territory: the territorial border demarcations of the countries are respected. But in the globalized market, new extensions of territory are established that extend beyond known borders. These are declared in the commercial treaties that are signed.
  • International organizations: the new supra-territorial structures make it necessary to install labor organizations and human coexistence in general.
  • The productive units: the extension of the industries and organizations that offer goods and/or services have a particular treatment. More when they are within special trade or production zones. The legal and tax framework is adjusted to facilitate the development of trade.
  • Citizens and individuals: citizens have a broader treatment regarding their benefits and considerations. They are no longer just inhabitants of a country but are part of a commercial territory.

Global market dimensions

When speaking of a globalized market, dimensions that were managed within traditional schemes are reconfigured.

So, in the new configuration you have to:

  • Physical dimension: traditional rigid borders are relaxed and give way to new trade blocs. These allow the conception of new territorial spaces.
  • Cultural dimension: in the globalized market there is a process of generation of a new culture. The past is part of the particular history of those who live in the territories where the globalized market develops. But a process of exchange of experiences begins that originates the establishment of new cultural experiences.
  • Technological dimension: globalized markets consolidate the information society through the establishment of communication structures. They are based on Information and Communication Technologies (ICT).
  • Social dimension: globalized markets generate mobilizations of people to areas of economic development. In this way, you can enjoy economic well-being. But this mobilization brings with it other social risks that must be evaluated and managed.
  • Political dimension: globalized markets are based on democratic relations between their actors. This includes respect for human rights, the autonomy of the public powers of the countries involved, and economic freedoms.
  • Legal dimension: the globalized market restructures the new vision of the justice systems of each of the actors involved in the process of exchange of goods and services.

Thus, a new judicial structure is developed where a common legal framework is unified that allows fighting and mediating commercial, civil, and criminal matters.

The international global value chain from the globalized market

When we speak of the value chain we are in the presence of a concept that emerges from the application of globalized markets. And it is that the value chain is nothing other than the set of production activities located in different countries to produce a good or service.

It is like developing a chain link by link, using its potential and advantages. These can be scientific, technological, logistical, and commercial advantages in different regions of the world.

Then, the new good or service that is produced has an implicit added value or added value. It benefits each of the actors involved in each of the phases of the production process. It is a win-win relationship from the birth of the idea, to the final sale.

International global value chains are the democratization of markets and production processes.

WEF to be host in Singapore next year

WEF to be host in Singapore next year

The World Economic Forum (WEF) will convene its Special Annual Meeting in Singapore next year from May 13 to May 16. 

The event will be the first global leadership event to address worldwide recovery from the COVID-19 pandemic, said WEF in a press release on Monday.

“This in-person meeting will bring together leaders to focus on shaping solutions to the world’s most pressing challenges,” it added. 

The meeting is usually held in Davos, Switzerland every year. “The change in location reflects the Forum’s priority of safeguarding the health and safety of participants and the host community,” said WEF.

“After careful consideration, and in light of the current situation with regards to COVID-19 cases, it was decided that Singapore was best placed to hold the meeting.”

In a press release on Monday, Singapore’s Ministry of Trade and Industry (MTI) said WEF’s decision to hold the meeting in Singapore “reflects its confidence in our management of the COVID-19 pandemic thus far”.

“The hosting of WEF’s Special Annual Meeting will have a positive impact on Singapore’s MICE (Meetings, Incentives, Conventions, and Exhibitions) sector and adjacent sectors such as hospitality,” added MTI.

Minister for Trade and Industry Chan Chun Sing said: “As the world battles COVID-19, there is an even greater impetus for countries to cooperate, collaborate, and partner each other to address pressing global issues.”

Mr. Chan also expressed “confidence” in Singapore’s ability to maintain public health and safety “while supporting the World Economic Forum’s mission to effect positive change through collaboration and engagement”.

MTI said this would be the second time the WEF Special Annual Meeting will be held outside of Switzerland since its establishment in 1971, and the first time it will be held in Asia.

Why is so important the WEF?

Founder and Executive Chairman of World Economic Forum Klaus Schwab said a global leadership summit is of “crucial importance to address how we can recover together”. 

He added that the Special Annual Meeting 2021 would be a place for leaders from business, government, and civil society to meet for the first time since the start of the COVID-19 pandemic. 

“Public-private cooperation is needed more than ever to rebuild trust and address the fault lines that emerged in 2020,” he said. 

The World Economic Forum will also hold a virtual event from Jan 25, 2021, to Jan 29, 2021, during the usual “Davos week”. 

It will feature participation from heads of state and government, chief executive officers, civil society leaders, global media, and youth leaders from Africa, Asia, Europe, the Middle East, Latin America, and North America.

World map with logistic network distribution, Logistic and transport concept in front Industrial Container Cargo freight ship for Concept of fast or instant shipping, Online goods orders worldwide

Supply chains and the adoption of Blockchain technology

With all the changes generated in global trade as a consequence of Covid-19, the adoption of Blockchain technology to improve supply chains is imminent.

The Covid-19 pandemic continues to threaten public health, as the world’s economies experience major changes in consumer behavior, patterns, and trade flows.

Faced with this uncertain panorama, importers and exporters are struggling to rethink global trade processes, as well as supply chains.

A situation that contrasts the increase in consumer expenses on certain goods, demand for food, medicines, chemicals and cleaning products.

Due to the uncertainty surrounding COVID-19, supply chain leaders must mitigate disruptions and risks to position their organizations for success through flexibility, creativity, and automation.

That is why in today’s environment, technology plays a fundamental role in managing the entire value chain, anticipating risks and challenges.

Blockchain technology adoption

Companies can leverage data from supply chains to detect inefficiencies, automate decision-making processes, and improve the customer experience.

In this context, the adoption of Blockchain technology continues to increase, with the purpose of empowering, supporting, and eventually automating commercial operations.

According to a Gartner report on Blockchain technology from last year, Blockchain technology will generate more than $ 176 billion in business value by 2025 and $ 3.1 trillion by 2030 worldwide.

Advantages of using Blockchain technology

It provides a more efficient and stable mechanism for tracking data in complex supply chains.

In this way, it increases efficiency and allows human errors to be reduced, as well as allows establishing responsibilities within the chain.

Blockchain technology allows to provide a safe custody of the Items as they move along the chain.

In addition, it significantly reduces the cost of products in transit due to lower documentation costs.

Singapore bets on a Blockchain-based economy

Blockchain Association Singapore, is an initiative that seeks to establish itself as the central nerve of the use of scalable technologies in the city-state and in the world, helping to build a new digital economy.

Dozens of companies already carry out Blockchain activities in Singapore, allowing the country to position itself as a global center in the implementation of this type of technologies.

With the push of the Blockchain Association Singapore, companies operating or entering Singapore will find it easier to take advantage of Blockchain and other scalable technologies to grow and transform their business.

Singapore leads foreign investment in Indonesia

Singapore remains as the main foreign investor in Indonesia despite the economic impact generated by the spread of Covid-19 in the city-state.

According to the Indonesia Investment Coordinating Board, Singapore maintained its investments in the archipelago country during the first six months of the current year.

Singaporean investors injected $4.7 billion in more than 6,500 projects, representing 34% of foreign investment in Indonesia.

Likewise, Bahlil Lahadalia, Chairman of the Indonesia Investment Coordinating Board point out that China and Hong Kong were behind Singapore.

China ranked second with an investment of $2.4 billion in 1,311 projects, while Hong Kong follows with an investment of $1.8 billion in 1,200 projects.

According to experts on the subject, Singapore leads investments in Indonesia considering it a potential market, due to this it prioritizes its investments there.

According to data from the Indonesia Investment Coordinating Board, in the first half of 2020, foreign capital decreased eight percent compared to the same period in 2019, while domestic investment increased 13.2 percent.

Covid-19 impact in Singapore

Singapore entered a technical recession, confirming the collapse of its economic activity in the second quarter of the year, the most affected by the pandemic.

The data published by the Ministry of Trade and Industry shows a contraction of 41.2% in the indicated period.

The ministry attributed the decline in the economy to low external demand in the context of the global economic crisis caused by Covid-19.

Singapore’s non-oil exports increased in June

Despite recently released data from the Ministry of Commerce and Trade revealing an economic downturn, Singapore’s non-oil exports increased in June.

Singapore’s export performance exceeded forecasts in June as the electronics sector boosted the city-state’s non-oil domestic exports.

The head of research and treasury strategy at OCBC Bank, said Singapore’s growth in non-oil exports performed really well in the first half of 2020.

She said that despite the interruption measures due to the pandemic, there was an annual increase of 6% in the exports and pointed out that the outlook for this next period is indeterminate.

“June data on Singapore’s non-oil domestic exports suggest the worst may have happened, but don’t expect double-digit growth momentum to continue in the second half of the year,” she said.

The growth of non-oil exports represents a challenge amid the recent economic crisis facing the city-state.

Economy in Recession

A week ago the Singapore Ministry of Commerce and Trade reported data revealing the condition of the city-state economy.

The published data shows a contraction in the economy during the Q2 of the year.

According to preliminary data from the Ministry of Commerce and Trade, the Gross Domestic Product (GDP) fell 41.2%, instead of the 37.4% forecast by economists.

The Ministry of Commerce attributed this fall of the economy due to low foreign demand in the context of the global crisis because of the pandemic.

To sum up, Singapore’s numbers give an idea of ​​how the ongoing pandemic could affect economies around the world, as one of the first countries to publish economic growth data for the period when the outbreak has spread globally.