Major Significances of the Second Wave of Globalisation
The second wave of globalisation refers to the period from the early 1990s onwards, especially after the end of the Cold War, when global economic integration deepened rapidly due to advances in technology, liberalisation of trade, rise of multinational corporations (MNCs), and international institutional support.
For countries like India, the second wave began in 1991 with economic liberalisation, opening up the economy to foreign investment, reducing trade barriers, and increasing private sector participation. This wave of globalisation has had far-reaching economic, political, cultural, and technological impacts on both developed and developing nations.
Below are the major significances of the second wave of globalisation:
1. Economic Liberalisation and Growth
- Many countries, including India, adopted liberal economic reforms such as:
- Deregulation of industries
- Reduction in import tariffs
- Privatisation of public enterprises
- Encouragement of foreign direct investment (FDI)
- These reforms led to higher economic growth rates, expanded employment opportunities, and increased trade.
- India’s GDP began to grow at 6–8% annually after 1991, marking a clear shift from the slower growth of the pre-liberalisation era.
2. Expansion of Global Trade and Markets
- The second wave witnessed a massive expansion of international trade due to:
- World Trade Organization (WTO) formation in 1995
- Free Trade Agreements (FTAs)
- Regional economic blocs like EU, NAFTA, ASEAN
- Businesses could now access global markets for selling their products and sourcing cheaper raw materials.
- Indian companies like Infosys, Tata, Mahindra, and Reliance became global players.
3. Rise of Multinational Corporations (MNCs)
- MNCs began setting up operations in multiple countries, creating global value chains.
- Developing countries like India became outsourcing hubs for services (IT, BPO) and manufacturing.
- For example, Bangalore emerged as a global IT city due to the entry of companies like Microsoft, Google, and IBM.
4. Technological Advancement and Digital Revolution
- The internet, mobile phones, satellite communication, and computer networks rapidly spread after 1990.
- Globalisation made technology transfer faster and more widespread.
- Social media, e-commerce, digital banking, and online education transformed daily life and work.
- India’s Digital India initiative and rise of platforms like Flipkart, Paytm, and UPI are direct outcomes of this tech-driven integration.
5. Cultural Exchange and Global Connectivity
- There was a huge increase in cross-cultural interaction due to international travel, migration, media, and online content.
- Young people across the world began to adopt similar lifestyles, fashion, music, and food habits.
- For example, international chains like McDonald’s, KFC, Domino’s, and Starbucks became popular in Indian cities.
- At the same time, Indian cinema, yoga, and cuisine spread globally.
6. Employment and Outsourcing Opportunities
- Outsourcing became a major feature of the global economy, with countries like India and the Philippines providing services like:
- Customer support
- Software development
- Accounting and legal services
- Millions of jobs were created in Indian cities through call centres, IT parks, and SEZs (Special Economic Zones).
7. Growth of International Institutions and Cooperation
- The second wave saw the rise in influence of:
- World Trade Organization (WTO)
- International Monetary Fund (IMF)
- World Bank
- United Nations Sustainable Development Goals (SDGs)
- These institutions helped standardise rules, solve disputes, and promote development cooperation.
- India started participating more actively in global forums like G20, BRICS, and UN summits.
8. Increased Foreign Direct Investment (FDI)
- Countries started competing to attract FDI by creating investment-friendly policies.
- India received significant FDI inflows in sectors like:
- Automobiles (e.g., Hyundai, Suzuki)
- Retail (e.g., Walmart, IKEA)
- Telecom (e.g., Vodafone, Jio collaborations)
- Infrastructure and real estate
- FDI contributed to infrastructure development, employment, and better technology.
9. Migration and Brain Circulation
- Globalisation allowed greater mobility of skilled labour.
- Many Indians went abroad for higher education, jobs, and business, leading to the rise of the Indian diaspora.
- This also led to remittances being sent back to India, boosting the rural economy. In 2023, India received over ₹8 lakh crore in remittances.
- There is also brain circulation, where Indian professionals return and contribute to national growth.
10. Global Awareness of Common Challenges
- Globalisation increased awareness and cooperation on common issues like:
- Climate change
- Pandemics (e.g., COVID-19)
- Terrorism
- Human rights and education
- Countries began working together through global treaties and conventions.
11. Rural and Urban Transformation
- Urban areas in India saw infrastructure growth, malls, metros, smart cities, and high-rise buildings.
- Rural India was affected through:
- Mobile connectivity
- Satellite TV
- Job opportunities via migration
- Increased consumer goods penetration (FMCG, electronics)
12. Shift in Consumer Behaviour and Lifestyle
- Global brands, online shopping, western education, and work culture changed how people think, dress, eat, and live.
- There is a growing middle-class consumer culture in India, influenced by global trends.
Conclusion
The second wave of globalisation brought about unprecedented economic, technological, and social transformations in countries like India. It connected nations, reduced distances (virtually and physically), and created opportunities for growth, innovation, and cooperation.
However, it also raised concerns like:
- Economic inequality
- Loss of local culture
- Job insecurity due to automation
- Over-dependence on global markets
Despite these challenges, the second wave has played a critical role in shaping the modern global economy and society, making it one of the most significant periods in recent human history.