Globalization refers to the integration of economies through the exchange of goods, people and ideas. It views the whole world as a ‘Global village’ or ‘World without trade borders’.

Globalization 4.0 is the third unbundling, which would happen when digi-tech allows arbitrage of international wage differences without the physical movement of workers. Globalization 4.0 is going to hit the service sector. Hundreds of millions of service-sector and professional workers in advanced economies will, for the first time ever, be exposed to the challenges and opportunities of globalization 4.0.

Trends of Globalization:

• Globalization 1.0 was pre-World War 1 globalization, which was launched by a historic drop in trade costs when steam and other forms of mechanical power made it economical to consume goods made faraway. This globalization came with almost no government support. There was no global governance and there was little domestic policy to help share the gains and pains of more intense international arbitrage in goods. Laissez-faire capitalism, imperialism and various forms of autocracy ruled this era mostly.
  1. However, the two world wars, the Great Depression, and the rise of communism and fascism resulted in hundreds of millions of humans being killed by other humans. This led to the end of G-1.0.
• Globalization 2.0 is the post-World War II phase where trade in goods was combined with complementary domestic policies that helped share the pains and gains of globalization (and automation). The market was in charge of efficiency; the government was in charge of justice. Internationally, Globalization 2.0 saw the establishment of institute-based, rule-based international governance, specifically the UN, IMF, World Bank, GATT/WTO and many specialized agencies like the FAO and ILO.
• Globalization 3.0 is the second unbundling, or the New Globalization. Arvind Subramanian called it hyper-globalization, Gary Gereffi called it the global value chain revolution, and Alan Blinder called it offshoring. The key is that globalization now meant factories crossing borders, and – critically – the know-how of G7 firms along with them. This created a new world of manufacturing in which high-tech was combined with low wages.
  1. This new combination disrupted the lives and communities of workers struggling to compete with high wages and high tech as well as those struggling to compete with low wages and low tech.
  2. Workers employed in goods-producing sectors were the most affected, since this unbundling mostly affected goods-producing sectors. In particular, the monopoly that G7 factory workers had on G7 manufacturing technology was broken when their employers moved jobs and know-how abroad.

Globalization 4.0: As explained above, the G-4.0 will impact the service sector mostly. It is in parallel with the IR 4.0. The various disruptive technologies like Artificial Intelligence, Big Data, Internet of Things, Block-chain etc. will play key roles in this. Rather than shaping a parallel hegemonic structure, globalisation 4.0 intends to correct the flaws inherent in globalisation 3.0 that allowed the dominance and wealth superiority of the great economic powers to hinder the optimisation and evolution of the global governance structure.

Globalization 4.0 and fighting climate change:

Climate change, arguably humanity’s most existential challenge, requires urgent global action. IPCC’s Special Report on the Impacts of Global warming at 1.5°C, published in October 2018, says we have just 12 years to act if dangerous climate change is to be avoided. With the rise in protectionism, rising national interest, G-4.0 is imperative to tackle the climate change with global efforts.

• By building new forms of alliances within and between the private and public sectors. Example: The Alliance of CEO Climate Leaders: This group of CEOs, with collective company revenues of more than $1.5 trillion, have already reduced their collective emissions by 9% since 2015 and are committed to do more
• By forging new clubs of like-minded governments, cities, states and provinces. Example: International Solar Alliance initiative which has about 120 countries
• By building new leadership platforms for policy experimentation and public-private action, each targeted to suit different industrial, national and regional agendas.
• With the rapid technological advances of the IR 4.0, we will also be able to harness new means of monitoring, verifying and reporting the progress (or lack thereof) of global, regional and industry actions on climate.
• This will also lead to radical new forms of distributed information transparency and real-time disclosures. Example: Internet of Things to capture and transmit data at real-time in highly polluted areas in cities.
• Increased transparency will boost awareness and simply heighten the pressure to act.

Conclusion:

Globalisation 4.0 should be more sustainable, reasonable and balanced version, led by innovation, inclusiveness, shared benefits and tolerance. Globalization 4.0 seeks to promote: practical, public-private arrangements to help governments find agile, collaborative solutions to pressing global problems in our more complex world, which is being rapidly transformed by the IR 4.0.