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Trade and Globalization

How did international trade and globalization change over time? What is the structure today? And what is its impact?

By Esteban Ortiz-Ospina, Diana Beltekian and Max Roser

This page was first published in 2014 and last revised in April 2024.

On this topic page, you can find data, visualizations, and research on historical and current patterns of international trade, as well as discussions of their origins and effects.

Other research and writing on trade and globalization on Our World in Data:

• Is globalization an engine of economic development?
• Is trade a major driver of income inequality?

Related topics

Economic Growth

See all our data, visualizations, and writing on economic growth.

Economic Inequality

See all our data, visualizations, and writing on economic inequality.

See all our data, visualizations, and writing on migration.

See all interactive charts on Trade and Globalization ↓

Trade has changed the world economy

Trade has grown remarkably over the last century.

One of the most important developments of the last century has been the integration of national economies into a global economic system. This process of integration, often called globalization, has resulted in a remarkable growth in trade between countries.

The chart here shows the growth of world exports over more than the last two centuries. These estimates are in constant prices (i.e. have been adjusted to account for inflation) and are indexed at 1913 values.

The chart shows an extraordinary growth in international trade over the last couple of centuries: Exports today are more than 40 times larger than in 1913.

You can switch to a logarithmic scale under ‘Settings’. This will help you see that, over the long run, growth has roughly followed an exponential path.

The increase in trade has even outpaced economic growth

The chart above shows how much more trade we have today relative to a century ago. But what about trade relative to total economic output?

Over the last couple of centuries the world economy has experienced sustained positive economic growth , so looking at changes in trade relative to GDP offers another interesting perspective.

The next chart plots the value of traded goods relative to GDP (i.e. the value of merchandise trade as a share of global economic output).

Up to 1870, the sum of worldwide exports accounted for less than 10% of global output. Today, the value of exported goods around the world is around 25%. This shows that over the last hundred years, the growth in trade has even outpaced rapid economic growth.

Trade expanded in two waves

The first "wave of globalization" started in the 19th century, the second one after ww2.

The following visualization presents a compilation of available trade estimates, showing the evolution of world exports and imports as a share of global economic output .

This metric (the ratio of total trade, exports plus imports, to global GDP) is known as the “openness index”. The higher the index, the higher the influence of trade transactions on global economic activity. 1

As we can see, until 1800 there was a long period characterized by persistently low international trade – globally the index never exceeded 10% before 1800. This then changed over the course of the 19th century, when technological advances triggered a period of marked growth in world trade – the so-called “first wave of globalization”.

This first wave came to an end with the beginning of World War I, when the decline of liberalism and the rise of nationalism led to a slump in international trade. In the chart we see a large drop in the interwar period.

After World War II trade started growing again. This new – and ongoing – wave of globalization has seen international trade grow faster than ever before. Today the sum of exports and imports across nations amounts to more than 50% of the value of total global output. 2

Before the first wave of globalization, trade was driven mostly by colonialism

Over the early modern period, transoceanic flows of goods between empires and colonies accounted for an important part of international trade. The following visualizations provide a comparison of intercontinental trade, in per capita terms, for different countries.

As we can see, intercontinental trade was very dynamic, with volumes varying considerably across time and from empire to empire.

Leonor Freire Costa, Nuno Palma, and Jaime Reis, who compiled and published the original data shown here, argue that trade, also in this period, had a substantial positive impact on the economy. 3

The first wave of globalization was marked by the rise and collapse of intra-European trade

The following visualization shows a detailed overview of Western European exports by destination. Figures correspond to export-to-GDP ratios (i.e. the sum of the value of exports from all Western European countries, divided by the total GDP in this region). You can use “Settings” to switch to a relative view and see the proportional contribution of each region to total Western European exports.

This chart shows that growth in Western European trade throughout the 19th century was largely driven by trade within the region: In the period 1830-1900 intra-European exports went from 1% of GDP to 10% of GDP, and this meant that the relative weight of intra-European exports doubled over the period. However, this process of European integration then collapsed sharply in the interwar period.

After the Second World War trade within Europe rebounded, and from the 1990s onwards exceeded the highest levels of the first wave of globalization. In addition, Western Europe then started to increasingly trade with Asia, the Americas, and to a smaller extent Africa and Oceania.

The next graph, using data from Broadberry and O'Rourke (2010) 4 , shows another perspective on the integration of the global economy and plots the evolution of three indicators measuring integration across different markets – specifically goods, labor, and capital markets.

The indicators in this chart are indexed, so they show changes relative to the levels of integration observed in 1900. This gives us another perspective on how quickly global integration collapsed with the two World Wars. 5

The second wave of globalization was enabled by technology

The worldwide expansion of trade after the Second World War was largely possible because of reductions in transaction costs stemming from technological advances, such as the development of commercial civil aviation, the improvement of productivity in the merchant marines, and the democratization of the telephone as the main mode of communication. The visualization shows how, at the global level, costs across these three variables have been going down since 1930.

Reductions in transaction costs impacted not only the volumes of trade but also the types of exchanges that were possible and profitable.

The first wave of globalization was characterized by inter-industry trade. This means that countries exported goods that were very different from what they imported – England exchanged machines for Australian wool and Indian tea. As transaction costs went down, this changed. In the second wave of globalization, we are seeing a rise in intra -industry trade (i.e. the exchange of broadly similar goods and services is becoming more and more common). France, for example, now both imports and exports machines to and from Germany.

The following visualization, from the UN World Development Report (2009) , plots the fraction of total world trade that is accounted for by intra-industry trade, by type of goods. As we can see, intra-industry trade has been going up for primary, intermediate, and final goods.

This pattern of trade is important because the scope for specialization increases if countries are able to exchange intermediate goods (e.g. auto parts) for related final goods (e.g. cars).

Trade and trade partners by country

Above, we examined the broad global trends over the last two centuries. Let's now examine country-level trends over this long and dynamic period.

This chart plots estimates of the value of trade in goods, relative to total economic activity (i.e. export-to-GDP ratios).

These historical estimates obviously come with a large margin of error (in the measurement section below we discuss the data limitations); yet they offer an interesting perspective.

You can edit the countries and regions selected. Each country tells a different story. 7

In the next chart we plot, country by country, the regional breakdown of exports. India is shown by default, but you can edit the countries and regions shown.

When switching to displaying relative values under ‘Settings’, we see the proportional contribution of purchases from each region. For example, we see that more than a third of Indian exports went to Asian countries in recent decades.

This gives us an interesting perspective on the changing nature of trade partnerships. In India, we see the rising importance of trade with Africa—a pattern that we discuss in more detail below .

Trade around the world today

How much do countries trade, trade openness around the world.

The metric trade as a share of GDP gives us an idea of global integration by capturing all incoming and outgoing transactions of a country.

The charts shows that countries differ a lot in the extent to which they engage in trade. Trade, for example, is much less important to the US economy than for other rich countries.

If you press the play button on the map, you can see changes over time. This reveals that, despite the great variation between countries, there is a common trend: over the last couple of decades trade openness has gone up in most countries.

Exports and imports in real dollars

Expressing the value of trade as a share of GDP tells us the importance of trade in relation to the size of economic activity. Let's now take a look at trade in monetary terms – this tells us the importance of trade in absolute, rather than relative terms.

The chart shows the value of exports (goods plus services) in dollars, country by country.

The main takeaway here is that the trend towards more trade is more pronounced than in the charts showing shares of GDP. This is not surprising: most countries today produce more than a couple of decades ago , and at the same time they trade more of what they produce. 8

What do countries trade?

Trade in goods vs. trade in services.

Trade transactions include goods (tangible products that are physically shipped across borders by road, rail, water, or air) and services (intangible commodities, such as tourism, financial services, and legal advice).

Many traded services make merchandise trade easier or cheaper—for example, shipping services, or insurance and financial services.

Trade in goods has been happening for millennia , while trade in services is a relatively recent phenomenon.

In some countries services are today an important driver of trade: in the UK services account for around half of all exports; and in the Bahamas, almost all exports are services.

In other countries, such as Nigeria and Venezuela, services account for a small share of total exports.

Globally, trade in goods accounts for the majority of trade transactions. But as this chart shows, the share of services in total global exports has slightly increased in recent decades. 9

How are trade partnerships changing?

Bilateral trade is becoming increasingly common.

If we consider all pairs of countries that engage in trade around the world, we find that in the majority of cases, there is a bilateral relationship today: most countries that export goods to a country also import goods from the same country.

The interactive visualization shows this. 10 In the chart, all possible country pairs are partitioned into three categories: the top portion represents the fraction of country pairs that do not trade with one another; the middle portion represents those that trade in both directions (they export to one another); and the bottom portion represents those that trade in one direction only (one country imports from, but does not export to, the other country).

As we can see, bilateral trade is becoming increasingly common (the middle portion has grown substantially). However, many countries still do not trade with each other at all.

South-South trade is becoming increasingly important

The next visualization here shows the share of world merchandise trade that corresponds to exchanges between today's rich countries and the rest of the world.

The 'rich countries' in this chart are: Australia, Austria, Belgium, Canada, Cyprus, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom and the United States. 'Non-rich countries' are all the other countries in the world.

As we can see, up until the Second World War, the majority of trade transactions involved exchanges between this small group of rich countries. But this has changed quickly over the last couple of decades, and today, trade between non-rich countries is just as important as trade between rich countries.

In the past two decades, China has been a key driver of this dynamic: the UN Human Development Report (2013) estimates that between 1992 and 2011, China's trade with Sub-Saharan Africa rose from $1 billion to more than $140 billion. 11

The majority of preferential trade agreements are between emerging economies

The last few decades have not only seen an increase in the volume of international trade, but also an increase in the number of preferential trade agreements through which exchanges take place. A preferential trade agreement is a trade pact that reduces tariffs between the participating countries for certain products.

The visualization here shows the evolution of the cumulative number of preferential trade agreements in force worldwide, according to the World Trade Organization (WTO). These numbers include notified and non-notified preferential agreements (the source reports that only about two-thirds of the agreements currently in force have been notified to the WTO) and are disaggregated by country groups.

This figure shows the increasingly important role of trade between developing countries (South-South trade), vis-a-vis trade between developed and developing countries (North-South trade). In the late 1970s, North-South agreements accounted for more than half of all agreements – in 2010, they accounted for about one-quarter. Today, the majority of preferential trade agreements are between developing economies.

Trading patterns have been changing quickly in middle-income countries

An important change in the composition of exported goods in these countries has accompanied the increase in trade among emerging economies over the last half century.

The next visualization plots the share of food exports in each country's total exported merchandise. These figures, produced by the World Bank, correspond to the Standard International Trade Classification, in which 'food' includes, among other goods, live animals, beverages, tobacco, coffee, oils, and fats.

Two points stand out. First, the relative importance of food exports has substantially decreased in most countries since the 1960s (although globally, it has gone up slightly more recently). Second, this decrease has been largest in middle-income countries, particularly in Latin America.

Regarding levels, as one would expect, in high-income countries, food still accounts for a much smaller share of merchandise exports than in most low- and middle-income-countries.

Trade generates efficiency gains

The raw correlation between trade and growth.

Over the last couple of centuries, the world economy has experienced sustained positive economic growth , and over the same period, this process of economic growth has been accompanied by even faster growth in global trade .

In a similar way, if we look at country-level data from the last half century we find that there is also a correlation between economic growth and trade: countries with higher rates of GDP growth also tend to have higher rates of growth in trade as a share of output. This basic correlation is shown in the chart here, where we plot the average annual change in real GDP per capita, against growth in trade (average annual change in value of exports as a share of GDP). 12

Is this statistical association between economic output and trade causal?

Among the potential growth-enhancing factors that may come from greater global economic integration are: competition (firms that fail to adopt new technologies and cut costs are more likely to fail and be replaced by more dynamic firms); economies of scale (firms that can export to the world face larger demand, and under the right conditions, they can operate at larger scales where the price per unit of product is lower); learning and innovation (firms that trade gain more experience and exposure to develop and adopt technologies and industry standards from foreign competitors). 13

Are these mechanisms supported by the data? Let's take a look at the available empirical evidence.

Evidence from cross-country differences in trade, growth, and productivity

When it comes to academic studies estimating the impact of trade on GDP growth, the most cited paper is Frankel and Romer (1999). 14

In this study, Frankel and Romer used geography as a proxy for trade to estimate the impact of trade on growth. This is a classic example of the so-called instrumental variables approach . The idea is that a country's geography is fixed, and mainly affects national income through trade. So if we observe that a country's distance from other countries is a powerful predictor of economic growth (after accounting for other characteristics), then the conclusion is drawn that it must be because trade has an effect on economic growth. Following this logic, Frankel and Romer find evidence of a strong impact of trade on economic growth.

Other papers have applied the same approach to richer cross-country data, and they have found similar results. A key example is Alcalá and Ciccone (2004). 15

This body of evidence suggests trade is indeed one of the factors driving national average incomes (GDP per capita) and macroeconomic productivity (GDP per worker) over the long run. 16

Evidence from changes in labor productivity at the firm level

If trade is causally linked to economic growth, we would expect that trade liberalization episodes also lead to firms becoming more productive in the medium and even short run. There is evidence suggesting this is often the case.

Pavcnik (2002) examined the effects of liberalized trade on plant productivity in the case of Chile, during the late 1970s and early 1980s. She found a positive impact on firm productivity in the import-competing sector. She also found evidence of aggregate productivity improvements from the reshuffling of resources and output from less to more efficient producers. 17

Bloom, Draca, and Van Reenen (2016) examined the impact of rising Chinese import competition on European firms over the period 1996-2007 and obtained similar results. They found that innovation increased more in those firms most affected by Chinese imports. They also found evidence of efficiency gains through two related channels: innovation increased and new existing technologies were adopted within firms, and aggregate productivity also increased because employment was reallocated towards more technologically advanced firms. 18

Trade does not only increase efficiency gains

Overall, the available evidence suggests that trade liberalization does improve economic efficiency. This evidence comes from different political and economic contexts and includes both micro and macro measures of efficiency.

This result is important because it shows that there are gains from trade. But of course, efficiency is not the only relevant consideration here. As we discuss in a companion article , the efficiency gains from trade are not generally equally shared by everyone. The evidence from the impact of trade on firm productivity confirms this: "reshuffling workers from less to more efficient producers" means closing down some jobs in some places. Because distributional concerns are real it is important to promote public policies – such as unemployment benefits and other safety-net programs – that help redistribute the gains from trade.

Trade has distributional consequences

The conceptual link between trade and household welfare.

When a country opens up to trade, the demand and supply of goods and services in the economy shift. As a consequence, local markets respond, and prices change. This has an impact on households, both as consumers and as wage earners.

The implication is that trade has an impact on everyone. It's not the case that the effects are restricted to workers from industries in the trade sector; or to consumers who buy imported goods. The effects of trade extend to everyone because markets are interlinked, so imports and exports have knock-on effects on all prices in the economy, including those in non-traded sectors.

Economists usually distinguish between "general equilibrium consumption effects" (i.e. changes in consumption that arise from the fact that trade affects the prices of non-traded goods relative to traded goods) and "general equilibrium income effects" (i.e. changes in wages that arise from the fact that trade has an impact on the demand for specific types of workers, who could be employed in both the traded and non-traded sectors).

Considering all these complex interrelations, it's not surprising that economic theories predict that not everyone will benefit from international trade in the same way. The distribution of the gains from trade depends on what different groups of people consume, and which types of jobs they have, or could have. 19

The link between trade, jobs and wages

Evidence from chinese imports and their impact on factory workers in the us.

The most famous study looking at this question is Autor, Dorn and Hanson (2013): "The China syndrome: Local labor market effects of import competition in the United States". 20

In this paper, Autor and coauthors examined how local labor markets changed in the parts of the country most exposed to Chinese competition. They found that rising exposure increased unemployment, lowered labor force participation, and reduced wages. Additionally, they found that claims for unemployment and healthcare benefits also increased in more trade-exposed labor markets.

The visualization here is one of the key charts from their paper. It's a scatter plot of cross-regional exposure to rising imports, against changes in employment. Each dot is a small region (a 'commuting zone' to be precise). The vertical position of the dots represents the percent change in manufacturing employment for the working-age population, and the horizontal position represents the predicted exposure to rising imports (exposure varies across regions depending on the local weight of different industries).

The trend line in this chart shows a negative relationship: more exposure goes along with less employment. There are large deviations from the trend (there are some low-exposure regions with big negative changes in employment); but the paper provides more sophisticated regressions and robustness checks, and finds that this relationship is statistically significant.

This result is important because it shows that the labor market adjustments were large. Many workers and communities were affected over a long period of time. 21

But it's also important to keep in mind that Autor and colleagues are only giving us a partial perspective on the total effect of trade on employment. In particular, comparing changes in employment at the regional level misses the fact that firms operate in multiple regions and industries at the same time. Indeed, Ildikó Magyari found evidence suggesting the Chinese trade shock provided incentives for US firms to diversify and reorganize production. 22

So companies that outsourced jobs to China often ended up closing some lines of business, but at the same time expanded other lines elsewhere in the US. This means that job losses in some regions subsidized new jobs in other parts of the country.

On the whole, Magyari finds that although Chinese imports may have reduced employment within some establishments, these losses were more than offset by gains in employment within the same firms in other places. This is no consolation to people who lost their jobs. But it is necessary to add this perspective to the simplistic story of "trade with China is bad for US workers".

Evidence from the expansion of trade in India and the impact on poverty reductions

Another important paper in this field is Topalova (2010): "Factor immobility and regional impacts of trade liberalization: Evidence on poverty from India". 23

In this paper, Topalova examines the impact of trade liberalization on poverty across different regions in India, using the sudden and extensive change in India's trade policy in 1991. She finds that rural regions that were more exposed to liberalization experienced a slower decline in poverty and lower consumption growth.

Analyzing the mechanisms underlying this effect, Topalova finds that liberalization had a stronger negative impact among the least geographically mobile at the bottom of the income distribution and in places where labor laws deterred workers from reallocating across sectors.

The evidence from India shows that (i) discussions that only look at "winners" in poor countries and "losers" in rich countries miss the point that the gains from trade are unequally distributed within both sets of countries; and (ii) context-specific factors, like worker mobility across sectors and geographic regions, are crucial to understand the impact of trade on incomes.

Evidence from other studies

• Donaldson (2018) uses archival data from colonial India to estimate the impact of India’s vast railroad network. He finds railroads increased trade, and in doing so they increased real incomes (and reduced income volatility). 24
• Porto (2006) looks at the distributional effects of Mercosur on Argentine families, and finds this regional trade agreement led to benefits across the entire income distribution. He finds the effect was progressive: poor households gained more than middle-income households because prior to the reform, trade protection benefitted the rich disproportionately. 25
• Trefler (2004) looks at the Canada-US Free Trade Agreement and finds there was a group who bore "adjustment costs" (displaced workers and struggling plants) and a group who enjoyed "long-run gains" (consumers and efficient plants). 26

The link between trade and the cost of living

The fact that trade negatively affects labor market opportunities for specific groups of people does not necessarily imply that trade has a negative aggregate effect on household welfare. This is because, while trade affects wages and employment, it also affects the prices of consumption goods. So households are affected both as consumers and as wage earners.

Most studies focus on the earnings channel and try to approximate the impact of trade on welfare by looking at how much wages can buy, using as a reference the changing prices of a fixed basket of goods.

This approach is problematic because it fails to consider welfare gains from increased product variety, and obscures complicated distributional issues such as the fact that poor and rich individuals consume different baskets so they benefit differently from changes in relative prices. 27

Ideally, studies looking at the impact of trade on household welfare should rely on fine-grained data on prices, consumption, and earnings. This is the approach followed in Atkin, Faber, and Gonzalez-Navarro (2018): "Retail globalization and household welfare: Evidence from Mexico". 28

Atkin and coauthors use a uniquely rich dataset from Mexico, and find that the arrival of global retail chains led to reductions in the incomes of traditional retail sector workers, but had little impact on average municipality-level incomes or employment; and led to lower costs of living for both rich and poor households.

The chart here shows the estimated distribution of total welfare gains across the household income distribution (the light-gray lines correspond to confidence intervals). These are proportional gains expressed as a percent of initial household income.

As we can see, there is a net positive welfare effect across all income groups; but these improvements in welfare are regressive, in the sense that richer households gain proportionally more (about 7.5 percent gain compared to 5 percent). 29

Evidence from other countries confirms this is not an isolated case – the expenditure channel really seems to be an important and understudied source of household welfare. Giuseppe Berlingieri, Holger Breinlich, Swati Dhingra, for example, investigated the consumer benefits from trade agreements implemented by the EU between 1993 and 2013; and they found that these trade agreements increased the quality of available products, which translated into a cumulative reduction in consumer prices equivalent to savings of €24 billion per year for EU consumers. 30

Implications of trade’s distributional effects

The available evidence shows that, for some groups of people, trade has a negative effect on wages and employment opportunities; at the same time, it has a large positive effect via lower consumer prices and increased product availability.

Two points are worth emphasizing.

For some households, the net effect is positive. But for some households that's not the case. In particular, workers who lose their jobs can be affected for extended periods of time, so the positive effect via lower prices is not enough to compensate them for the reduction in earnings.

On the whole, if we aggregate changes in welfare across households, the net effect is usually positive. But this is hardly a consolation for the worse off.

This highlights a complex reality: There are aggregate gains from trade , but there are also real distributional concerns. Even if trade is not a major driver of income inequalities , it's important to keep in mind that public policies, such as unemployment benefits and other safety-net programs, can and should help redistribute the gains from trade.

Explaining trade patterns: Theory and Evidence

Comparative advantage, theory: what is 'comparative advantage' and why does it matter to understand trade.

In economic theory, the 'economic cost' – or the 'opportunity cost' – of producing a good is the value of everything you need to give up in order to produce that good.

Economic costs include physical inputs (the value of the stuff you use to produce the good), plus forgone opportunities (when you allocate scarce resources to a task, you give up alternative uses of those resources).

A country or a person is said to have a 'comparative advantage' if it can produce something at a lower opportunity cost than its trade partners.

The forgone opportunities of production are key to understanding this concept. It is precisely this that distinguishes absolute advantage from comparative advantage.

To see the difference between comparative and absolute advantage, consider a commercial aviation pilot and a baker. Suppose the pilot is an excellent chef, and she can bake just as well, or even better than the baker. In this case, the pilot has an absolute advantage in both tasks. Yet the baker probably has a comparative advantage in baking, because the opportunity cost of baking is much higher for the pilot.

The freely available economics textbook The Economy: Economics for a Changing World explains this as follows: "A person or country has comparative advantage in the production of a particular good, if the cost of producing an additional unit of that good relative to the cost of producing another good is lower than another person or country’s cost to produce the same two goods."

At the individual level, comparative advantage explains why you might want to delegate tasks to someone else, even if you can do those tasks better and faster than them. This may sound counterintuitive, but it is not: If you are good at many things, it means that investing time in one task has a high opportunity cost, because you are not doing the other amazing things you could be doing with your time and resources. So, at least from an efficiency point of view, you should specialize on what you are best at, and delegate the rest.

The same logic applies to countries. Broadly speaking, the principle of comparative advantage postulates that all nations can gain from trade if each specializes in producing what they are relatively more efficient at producing, and imports the rest: “do what you do best, import the rest”. 31

In countries with a relative abundance of certain factors of production, the theory of comparative advantage predicts that they will export goods that rely heavily upon those factors: a country typically has a comparative advantage in those goods that use its abundant resources. Colombia exports bananas to Europe because it has comparatively abundant tropical weather.

Is there empirical support for comparative-advantage theories of trade?

The empirical evidence suggests that the principle of comparative advantage does help explain trade patterns. Bernhofen and Brown (2004) 32 , for instance, provide evidence using the experience of Japan. Specifically, they exploit Japan’s dramatic nineteenth-century move from a state of near complete isolation to wide trade openness.

The graph here shows the price changes of the key tradable goods after the opening up to trade. It presents a scatter diagram of the net exports in 1869 graphed in relation to the change in prices from 1851–53 to 1869. As we can see, this is consistent with the theory: after opening to trade, the relative prices of major exports such as silk increased (Japan exported what was cheap for them to produce and which was valuable abroad), while the relative price of imports such as sugar declined (they imported what was relatively more difficult for them to produce, but was cheap abroad).

Trade diminishes with distance

The resistance that geography imposes on trade has long been studied in the empirical economics literature – and the main conclusion is that trade intensity is strongly linked to geographic distance.

The visualization, from Eaton and Kortum (2002), graphs 'normalized import shares' against distance. 33 Each dot represents a country pair from a set of 19 OECD countries, and both the vertical and horizontal axes are expressed on logarithmic scales.

The 'normalized import shares' in the vertical axis provide a measure of how much each country imports from different partners (see the paper for details on how this is calculated and normalized), while the distance in the horizontal axis corresponds to the distance between central cities in each country (see the paper and references therein for details on the list of cities). As we can see, there is a strong negative relationship. Trade diminishes with distance. Through econometric modeling, the paper shows that this relationship is not just a correlation driven by other factors: their findings suggest that distance imposes a significant barrier to trade.

The fact that trade diminishes with distance is also corroborated by data on trade intensity within countries. The visualization here shows, through a series of maps, the geographic distribution of French firms that export to France's neighboring countries. The colors reflect the percentage of firms that export to each specific country.

As we can see, the share of firms exporting to each of the corresponding neighbors is the largest close to the border. The authors also show in the paper that this pattern holds for the value of individual-firm exports – trade value decreases with distance to the border.

Institutions

Conducting international trade requires both financial and non-financial institutions to support transactions. Some of these institutions are fairly obvious (e.g. law enforcement); but some are less obvious. For example, the evidence shows that producers in exporting countries often need credit in order to engage in trade.

The scatter plot, from Manova (2013), shows the correlation between levels in private credit (specifically exporters’ private credit as a share of GDP) and exports (average log bilateral exports across destinations and sectors). 35 As can be seen, financially developed economies – those with more dynamic private credit markets – typically outperform exporters with less evolved financial institutions.

Other studies have shown that country-specific institutions, like the knowledge of foreign languages, for instance, are also important to promote foreign relative to domestic trade. 36

Increasing returns to scale

The concept of comparative advantage predicts that if all countries had identical endowments and institutions, there would be little incentive for specialization because the opportunity cost of producing any good would be the same in every country.

So you may wonder: why is it then the case that in the last few years, we have seen such rapid growth in intra-industry trade between rich countries?

The increase in intra-industry between rich countries seems paradoxical under the light of comparative advantage because in recent decades we have seen convergence in key factors, such as human capital , across these countries.

The solution to the paradox is actually not very complicated: Comparative advantage is one, but not the only force driving incentives to specialization and trade.

Several economists, most notably Paul Krugman, have developed theories of trade in which trade is not due to differences between countries, but instead due to "increasing returns to scale" – an economic term used to denote a technology in which producing extra units of a good becomes cheaper if you operate at a larger scale.

The idea is that specialization allows countries to reap greater economies of scale (i.e. to reduce production costs by focusing on producing large quantities of specific products), so trade can be a good idea even if the countries do not differ in endowments, including culture and institutions.

These models of trade, often referred to as “New Trade Theory”, are helpful in explaining why in the last few years we have seen such rapid growth in two-way exchanges of goods within industries between developed nations.

In a much-cited paper, Evenett and Keller (2002) show that both factor endowments and increasing returns help explain production and trade patterns around the world. 37

You can learn more about New Trade Theory, and the empirical support behind it, in Paul Krugman's Nobel lecture .

Measurement and data quality

There are dozens of official sources of data on international trade, and if you compare these different sources, you will find that they do not agree with one another. Even if you focus on what seems to be the same indicator for the same year in the same country, discrepancies are large.

Such differences between sources can also be found in rich countries where statistical agencies tend to follow international reporting guidelines more closely.

There are also large bilateral discrepancies within sources: the value of goods that country A exports to country B can be more than the value of goods that country B imports from country A.

Here we explain how international trade data is collected and processed, and why there are such large discrepancies.

What data is available?

The data hubs from several large international organizations publish and maintain extensive cross-country datasets on international trade. Here's a list of the most important ones:

• World Bank Open Data
• WTO Statistics
• UN Comtrade
• UNCTAD World Integrated Trade Solutions

In addition to these sources, there are also many other academic projects that publish data on international trade. These projects tend to rely on data from one or more of the sources above, and they typically process and merge series in order to improve coverage and consistency. Three important sources are:

• The Correlates of War Project . 38
• The NBER-United Nations Trade Dataset Project .
• The CEPII Bilateral Trade and Gravity Data Project . 39

How large are the discrepancies between sources?

In the visualization here, we compare the data published by several of the sources listed above, country by country, from 1955 to today.

For each country, we exclude trade in services, and we focus only on estimates of the total value of exported goods, expressed as shares of GDP. 40

As this chart clearly shows, different data sources often tell very different stories. If you change the country or region shown you will see that this is true, to varying degrees, across all countries and years.

Constructing this chart was demanding. It required downloading trade data from many different sources, collecting the relevant series, and then standardizing them so that the units of measure and the geographical territories were consistent.

All series, except the two long-run series from CEPII and NBER-UN, were produced from data published by the sources in current US dollars and then converted to GDP shares using a unique source (World Bank).

So, if all series are in the same units (share of national GDP) and they measure the same thing (value of goods exported from one country to the rest of the world), what explains the differences?

Let's dig deeper to understand what's going on.

Why doesn't the data add up?

Differences in guidelines used by countries to record and report trade data.

Broadly speaking, there are two main approaches used to estimate international merchandise trade:

• The first approach relies on estimating trade from customs records , often complementing or correcting figures with data from enterprise surveys and administrative records associated with taxation. The main manual providing guidelines for this approach is the International Merchandise Trade Statistics Manual (IMTS).
• The second approach relies on estimating trade from macroeconomic data , typically National Accounts . The main manual providing guidelines for this approach is the Balance of Payments and International Investment Position Manual (BPM6), which was drafted in parallel with the 2008 System of National Accounts of the United Nations (SNA 2008). The idea behind this approach is to record changes in economic ownership. 41

Under these two approaches, it is common to distinguish between 'traded merchandise' and 'traded goods'. The distinction is often made because goods simply being transported through a country (i.e., goods in transit) are not considered to change a country's stock of material resources and are hence often excluded from the more narrow concept of 'merchandise trade'.

Also, adding to the complexity, countries often rely on measurement protocols developed alongside approaches and concepts that are not perfectly compatible to begin with. In Europe, for example, countries use the 'Compilers guide on European statistics on international trade in goods'.

Measurement error and other inconsistencies

Even when two sources rely on the same broad accounting approach, discrepancies arise because countries fail to adhere perfectly to the protocols.

In theory, for example, the exports of country A to country B should mirror the imports of country B from country A. But in practice this is rarely the case because of differences in valuation. According to the BPM6, imports, and exports should be recorded in the balance of payments accounts on a ' free on board (FOB) basis', which means using prices that include all charges up to placing the goods on board a ship at the port of departure. Yet many countries stick to FOB values only for exports, and use CIF values for imports (CIF stands for 'Cost, Insurance and Freight', and includes the costs of transportation). 42

The chart here gives you an idea of how large import-export asymmetries are. Shown are the differences between the value of goods that each country reports exporting to the US, and the value of goods that the US reports importing from the same countries. For example, for China, the figure in the chart corresponds to the “Value of merchandise imports in the US from China” minus the “Value of merchandise exports from China to the US”.

The differences in the chart here, which are both positive and negative, suggest that there is more going on than differences in FOB vs. CIF values. If all asymmetries were coming from FOB-CIF differences, then we should only see positive values in the chart (recall that, unlike FOB values, CIF values include the cost of transportation, so CIF values are larger).

What else may be going on here?

Another common source of measurement error relates to the inconsistent attribution of trade partners. An example is failure to follow the guidelines on how to treat goods passing through intermediary countries for processing or merchanting purposes. As global production chains become more complex, countries find it increasingly difficult to unambiguously establish the origin and final destination of merchandise, even when rules are established in the manuals. 43

And there are still more potential sources of discrepancies. For example differences in customs and tax regimes, and differences between "general" and "special" trade systems (i.e. differences between statistical territories and actual country borders, which do not often coincide because of things like 'custom free zones'). 44

Even when two sources have identical trade estimates, inconsistencies in published data can arise from differences in exchange rates. If a dataset reports cross-country trade data in US dollars, estimates will vary depending on the exchange rates used. Different exchange rates will lead to conflicting estimates, even if figures in local currency units are consistent.

A checklist for comparing sources

Asymmetries in international trade statistics are large and arise for a variety of reasons. These include conceptual inconsistencies across measurement standards and inconsistencies in the way countries apply agreed-upon protocols. Here's a checklist of issues to keep in mind when comparing sources.

• Differences in underlying records: is trade measured from National Accounts data rather than directly from custom or tax records?
• Differences in import and export valuations: are transactions valued at FOB or CIF prices?
• Inconsistent attribution of trade partners: how is the origin and final destination of merchandise established?
• Difference between 'goods' and 'merchandise': how are re-importing, re-exporting, and intermediary merchanting transactions recorded?
• Exchange rates: how are values converted from local currency units to the currency that allows international comparisons (most often the US-$)?
• Differences between 'general' and 'special' trade system: how is trade recorded for custom-free zones?
• Other issues: Time of recording, confidentiality policies, product classification, deliberate mis-invoicing for illicit purposes.

Many organizations producing trade data have long recognized these factors. Indeed, international organizations often incorporate corrections in an attempt to improve data quality.

The OECD's Balanced International Merchandise Trade Statistics , for example, uses its own approach to correct and reconcile international merchandise trade statistics. 45

The corrections applied in the OECD's 'balanced' series make this the best source for cross-country comparisons. However, this dataset has low coverage across countries, and it only goes back to 2011. This is an important obstacle since the complex adjustments introduced by the OECD imply we can't easily improve coverage by appending data from other sources. At Our World in Data we have chosen to rely on CEPII as the main source for exploring long-run changes in international trade, but we also rely on World Bank and OECD data for up-to-date cross-country comparisons.

There are two key lessons from all of this. The first lesson is that, for most users of trade data out there, there is no obvious way of choosing between sources. And the second lesson is that, because of statistical glitches, researchers and policymakers should always take analyses of trade data with a pinch of salt. For example, in a recent high-profile report , researchers attributed mismatches in bilateral trade data to illicit financial flows through trade mis-invoicing (or trade-based money laundering). As we show here, this interpretation of the data is not appropriate, since mismatches in the data can, and often do arise from measurement inconsistencies rather than malfeasance. 46

Hopefully, the discussion and checklist above can help researchers better interpret and choose between conflicting data sources.

Interactive charts on Trade and Globalization

The openness index, when calculated for the world as a whole, includes double-counting of transactions: When country A sells goods to country B, this shows up in the data both as an import (B imports from A) and as an export (A sells to B).

Indeed, if you compare the chart showing the global trade openness index and the chart showing global merchandise exports as a share of GDP , you find that the former is almost twice as large as the latter.

Why is the global openness index not exactly twice the value reported in the chart plotting global merchandise exports? There a three reasons.

First, the global openness index uses different sources. Second, the global openness index includes trade in goods and services, while merchandise exports include goods but not services. And third, the amount that country A reports exporting to country B does not usually match the amount that B reports importing from A.

We explore this in more detail in our measurement section below .

Klasing and Milionis (2014), one of the sources in the chart, published an additional set of estimates under an alternative specification. Similarly, for the period 1960-2015, the World Bank's World Development Indicators published an alternative set of estimates similar but not identical to those included from the Penn World Tables (9.1). You find all these alternative overlapping sources in this comparison chart .

Leonor Freire Costa, Nuno Palma, and Jaime Reis (2015) – The great escape? The contribution of the empire to Portugal's economic growth, 1500–1800 Leonor Freire Costa Nuno Palma Jaime Reis European Review of Economic History, Volume 19, Issue 1, 1 February 2015, Pages 1–22, https://doi.org/10.1093/ereh/heu019

Broadberry and O'Rourke (2010) - The Cambridge Economic History of Modern Europe: Volume 2, 1870 to the Present. Cambridge University Press.

Integration in the goods markets is measured here through the 'trade openness index', which is defined by the sum of exports and imports as a share of GDP. In our interactive chart you can explore trends in trade openness over this period for a selection of European countries.

Broadberry and O'Rourke (2010) - The Cambridge Economic History of Modern Europe: Volume 2, 1870 to the Present. Cambridge University Press. The graph depicts the “evolution of three indicators measuring integration in commodity, labor, and capital markets over the long run. Commodity market integration is measured by computing the ratio of exports to GDP. Labor market integration is measured by dividing the migratory turnover by population. Financial integration is measured using Feldstein–Horioka estimators of current account disconnectedness.”

We also have the same chart but showing imports .

We also have the same chart, but showing imports .

This interactive chart shows trade in services as a share of GDP across countries and regions.

This chart was inspired by a chart from Helpman, E., Melitz, M., & Rubinstein, Y. (2007). Estimating trade flows: Trading partners and trading volumes (No. w12927). National Bureau of Economic Research.

We also have the same data, but as a stacked-area chart .

There are different ways of capturing this correlation. I focus here on all countries with data over the period 1945-2014. You can find a similar chart using different data sources and time periods in Ventura, J. (2005). A global view of economic growth. Handbook of economic growth, 1, 1419-1497. Online here .

The textbook The Economy: Economics for a Changing World explains this in more detail.

Frankel, J. A., & Romer, D. H. (1999). Does trade cause growth? American Economic Review, 89(3), 379-399.

Alcalá, F., & Ciccone, A. (2004). Trade and productivity . The Quarterly Journal of Economics, 119(2), 613-646.

There are many papers that try to answer this specific question with macro data. For an overview of papers and methods see: Durlauf, S. N., Johnson, P. A., & Temple, J. R. (2005). Growth econometrics. Handbook of economic growth, 1, 555-677.

Pavcnik, N. (2002). Trade liberalization, exit, and productivity improvements: Evidence from Chilean plants . The Review of Economic Studies, 69(1), 245-276.

Bloom, N., Draca, M., & Van Reenen, J. (2016). Trade induced technical change? The impact of Chinese imports on innovation, IT and productivity. The Review of Economic Studies, 83(1), 87-117. Available online here .

You can read more about these economic concepts, and the related predictions from economic theory, in Chapter 18 of the textbook The Economy: Economics for a Changing World .

David, H., Dorn, D., & Hanson, G. H. (2013). The China syndrome: Local labor market effects of import competition in the United States . American Economic Review, 103(6), 2121-68.

It's important to mention here that the economist Jonathan Rothwell wrote a paper suggesting these findings are the result of a statistical illusion. Rothwell's critique received some attention from the media , but Autor and coauthors provided a reply , which I think successfully refutes this claim.

Magyari, I. (2017). Firm Reorganization, Chinese Imports, and US Manufacturing Employment . US Census Bureau, Center for Economic Studies.

Topalova, P. (2010). Factor immobility and regional impacts of trade liberalization: Evidence on poverty from India . American Economic Journal: Applied Economics, 2(4), 1-41.

Donaldson, D. (2018). Railroads of the Raj: Estimating the impact of transportation infrastructure . American Economic Review, 108(4-5), 899-934.

Porto, G (2006). Using Survey Data to Assess the Distributional Effects of Trade Policy. Journal of International Economics 70 (2006) 140–160.

Trefler, D. (2004). The long and short of the Canada-US free trade agreement . American Economic Review, 94(4), 870-895.

See: (i) Feenstra, R. C., & Weinstein, D. E. (2017). Globalization, markups, and US welfare . Journal of Political Economy, 125(4), 1040-1074. (ii) Fajgelbaum, P. D., & Khandelwal, A. K. (2016). Measuring the unequal gains from trade . The Quarterly Journal of Economics, 131(3), 1113-1180.

Atkin, David, Benjamin Faber, and Marco Gonzalez-Navarro. "Retail globalization and household welfare: Evidence from Mexico." Journal of Political Economy 126.1 (2018): 1-73.

In the paper, Atkin and coauthors explore the reasons for this and find that the regressive nature of the distribution is mainly due to richer households placing higher weight on the product variety and shopping amenities on offer at these new foreign stores.

Berlingieri, G., Breinlich, H., & Dhingra, S. (2018). The Impact of Trade Agreements on Consumer Welfare—Evidence from the EU Common External Trade Policy. Journal of the European Economic Association.

Nobel laureate Paul Samuelson (1969) was once challenged by the mathematician Stanislaw Ulam: "Name me one proposition in all of the social sciences which is both true and non-trivial." It was several years later than he thought of the correct response: comparative advantage. "That it is logically true need not be argued before a mathematician; that is is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them."

(NB. This is an excerpt from https://www.wto.org/english/res_e/reser_e/cadv_e.htm)

Bernhofen, D., & Brown, J. (2004). A Direct Test of the Theory of Comparative Advantage: The Case of Japan. Journal of Political Economy, 112(1), 48-67. doi:1. Retrieved from http://www.jstor.org/stable/10.1086/379944 doi:1

Eaton, J., & Kortum, S. (2002). Technology, geography, and trade. Econometrica, 70(5), 1741-1779.

Crozet, M., & Koenig, P. (2010). Structural Gravity Equations with Intensive and Extensive Margins. The Canadian Journal of Economics / Revue Canadienne D'Economique, 43(1), 41-62. Retrieved from http://www.jstor.org/stable/40389555

Manova, Kalina. "Credit constraints, heterogeneous firms, and international trade." The Review of Economic Studies 80.2 (2013): 711-744.

Melitz, J. (2008). Language and foreign trade. European Economic Review, 52(4), 667-699.

Evenett, S. J., & Keller, W. (2002). On theories explaining the success of the gravity equation . Journal of Political Economy, 110(2), 281-316.

For more information on how the COW trade datasets were constructed see: (i) Barbieri, Katherine, and Omar M. G. Omar Keshk. 2016. Correlates of War Project Trade Data Set Codebook, Version 4.0. Available at http://correlatesofwar.org and (ii) Barbieri, Katherine, Omar M. G. Keshk, and Brian Pollins. 2009. TRADING DATA: Evaluating our Assumptions and Coding Rules. Conflict Management and Peace Science, 26(5): 471–491.

Further information on CEPII's methodology can be found in their working paper .

The chart includes series labeled by the sources as 'merchandise trade' and 'goods trade'. As we explain below, part of the asymmetries in trade data comes from the fact that, although 'merchandise' and 'goods' are equivalent in the dictionary, these two terms often measure related but different things.

For example, if there is no change in ownership (e.g. a firm exports goods to its factory in another country for processing, and then re-imports the processed goods) the manual says that statistical agencies should only record the net difference in value. You can find more details about this in an OECD Statistics Briefing .

This issue is actually also a source of disagreement between National Accounts data and customs data. You can read more about it in this report: Harrison, Anne (2013) FOB/CIF Issue in Merchandise Trade/Transport of Goods in BPM6 and the 2008 SNA, Twenty-Fifth Meeting of the IMF Committee on Balance of Payments Statistics, Washington, D.C .

Precisely because of the difficulty that arises when trying to establish the origin and final destination of merchandise, some sources distinguish between national and dyadic (i.e. 'directed') trade estimates.

For more details about general and special trade see the Eurostat glossary .

The OECD approach consists of four steps, which they describe as follows: "First, data are collected and organized, and imports are converted to FOB prices to match the valuation of exports. Secondly, data are adjusted for several specific large problems known to drive asymmetries. Presently these include “modular” adjustments for unallocated and confidential trade; for exports by Hong Kong, China; for Swiss non-monetary gold; and for clear-cut cases of product misclassifications. The list of modules is expected to grow over time. In the third step, adjusted data are balanced using a “Symmetry Index” that weights exports and imports. As the final step, the data are also converted to Classification of Products by Activity (CPA) products to better align with National Accounts statistics, such as in national Supply-Use tables." You can read more about it here . In addition to the OECD, other sources also use corrections. The IMF's DOTS dataset, for example, uses a 6 percent rule for converting import valuations (in CIF) into export values (in FOB). More information can be found in the IMF's (2018) working paper on 'New Estimates for Direction of Trade Statistics'.

For more details on this see Forstater, M. (2018) Illicit Financial Flows, Trade Misinvoicing, and Multinational Tax Avoidance: The Same or Different? , CGD Policy Paper 123.

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Home — Essay Samples — Sociology — Globalization

Essays on Globalization

Hook examples for globalization essays, "the global village" metaphor hook.

"In the age of globalization, our world has transformed into a 'global village.' Explore the implications of this metaphor and how it has reshaped our understanding of interconnectedness and cultural exchange."

The Impact of Digital Connectivity Hook

"In an era where a single tweet can reach millions, digital connectivity has revolutionized globalization. Delve into the profound impact of the internet, social media, and technology on global interactions."

The Paradox of Local vs. Global Hook

"Globalization blurs the lines between local and global identities. Analyze the paradox of preserving cultural heritage while embracing the globalized world and how this tension shapes our societies."

The Global Marketplace Hook

"Globalization has ushered in an era of unprecedented trade and economic interconnectedness. Explore the dynamics of the global marketplace, from multinational corporations to supply chains spanning continents."

Cultural Fusion and Identity Hook

"Globalization has led to a melting pot of cultures, but what happens to cultural identities in the process? Investigate how globalization impacts the preservation and evolution of cultural identities."

The Challenges of Globalization Hook

"While globalization offers numerous benefits, it also presents challenges. Examine issues such as income inequality, cultural homogenization, and environmental concerns that arise in a globalized world."

The Future of Globalization Hook

"As we stand on the brink of a globalized future, what can we expect? Join me in exploring the potential trajectories of globalization, from its impact on politics to the role of emerging technologies."

The Best Globalization Essay Topics

• The Impact of Globalization on Local Cultures: Integration or Erasure?
• The Impact of Globalization on Cultural Identity in Anthropological Studies
• Globalization and Economic Inequality: Bridging the Gap Between Rich and Poor
• The Role of Technology in Advancing Globalization and Its Social Implications
• Environmental Consequences of Globalization: Challenges and Sustainable Solutions
• Analyzing the Advantages and Disadvantages of Globalization
• The Influence of Globalization on Education and Cross-Cultural Exchanges
• Global Political Dynamics: How Globalization Affects Sovereignty and Governance
• Globalization and Health: The Spread of Diseases and Global Health Initiatives
• Consumer Culture and Globalization: The Homogenization of Global Markets

The Disadvantages of a Mcdonaldized Society

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Sociological Imagination Am I Supposed to

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Globalization's Theories and Effects in The Modern World

The effects of globalization on health and medicine, a study on globalization and its various sides, overview of five articles about globalization, globalization: two sides of the arguments both for and against, globalization and its positive and negative sides for india, the advantages and disadvantages of the globalization process based on real-life examples, criticism and controversial benefits of globalization, globalization: importance of english nowadays, the impact of globalization, nationalism and protectionism on india, an overview of the overall impact of globalization, research of effects of globalization on the media in the world, globalisation as an economical, political and cultural process, pro globalist and anti globalist view from developed country perspective, how global issues impact individual states, electronic commerce in the globalization era, the effect of globalization and americanization on mass media, components of globalization: concept sociocultural and social globalizations, how the impact of globalization on illicit drug trafficking has affected international security, discussion of whether globalization is good or bad for the indian economy.

1. Halliday, T. C., & Osinsky, P. (2006). Globalization of law. Annu. Rev. Sociol., 32, 447-470. (https://www.annualreviews.org/doi/abs/10.1146/annurev.soc.32.061604.123136) 2. Fischer, S. (2003). Globalization and its challenges. American Economic Review, 93(2), 1-30. (https://www.aeaweb.org/articles?id=10.1257/000282803321946750) 3. Lang, M. (2006). Globalization and its history. The Journal of Modern History, 78(4), 899-931. (https://www.journals.uchicago.edu/doi/abs/10.1086/511251?journalCode=jmh) 4. Spring, J. (2008). Research on globalization and education. Review of educational research, 78(2), 330-363. (https://journals.sagepub.com/doi/abs/10.3102/0034654308317846?journalCode=rera) 5. Scott, A., & Storper, M. (2003). Regions, globalization, development. Regional studies, 37(6-7), 579-593. (https://www.tandfonline.com/doi/abs/10.1080/0034340032000108697a) 6. Jameson, F. (1998). Notes on globalization as a philosophical issue. In The cultures of globalization (pp. 54-78). Duke University Press. (https://www.degruyter.com/document/doi/10.1515/9780822378426-005/html?lang=de) 7. Frankel, J. A. (2003). The environment and globalization. (https://www.nber.org/papers/w10090) 8. Teeple, G. (2000). What is globalization?. Globalization and its discontents, 9-23. (https://link.springer.com/chapter/10.1057/9780333981610_2)

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• Sociological Imagination
• Stereotypes
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• Sociological Perspective
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2020 Theses Doctoral

Essays on Financial Market and Trade Globalization

Wang, Yahui

This dissertation presents three essays in financial economics. The essays study the impact of trade globalization through the lens of the financial market. The first chapter investigates the effect of trade liberalization policy on firm value. I identify this effect by exploiting cross-sectional differences in firms' exposure to potential tariff hikes imposed on U.S. imports from China. I find that the Chinese equity market responded negatively to a major U.S.-China trade liberalization event in 2000, and the responses were driven by inefficient state-owned institutions. The analysis also implies that policy uncertainty elimination may generate distributional gains from market share reallocation. The second chapter focuses on the role of implicit protection from trade globalization and its impact on the U.S. equity market. The third chapter explores the consequences of the U.S.-China trade war.

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• United States
• International trade
• Economic policy
• International economic relations

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✍️Essay on Globalisation: Samples in 100, 150 and 200 Words

• Updated on  
• Oct 25, 2023

Globalisation means the combination of economies and societies with the help of information, ideas, technology, finance, goods, services, and people. It is a process where multinational companies work on their international standing and conduct operations internationally or overseas. Over the years, Globalisation has had a profound impact on various aspects of society. Today we will be discussing what globalisation is and how it came into existence with the essay on globalisation listed below.

Table of Contents

• 1 How Globalisation Came Into Existence?
• 2 Essay on Globalisation in 100 Words
• 3 Essay on Globalisation in 150 Words
• 4 Essay on Globalisation in 200 Words

How Globalisation Came Into Existence?

For all those unaware, the concepts of globalisation first emerged in the 20th century. Here are some of the key events which led to the development of globalisation in today’s digital world.

• The ancient Silk Route as well as the maritime routes led to the exchange of goods, ideas and culture in several countries. Although these were just trade routes, but later became important centres for cultural exchange.
• Other than this, the European colonial expansion which took place from the 15th to the 20th century led to the setting up of global markets where both knowledge and people were transferred to several developing countries. 
• The evolution and exchange of mass media, cinema and the internet further led to the widespread dissemination of cultures and ideas.

Also Read: Essay on the Importance of the English Language for Students

Essay on Globalisation in 100 Words

Globalization, the interconnectedness of nations through trade, technology, and cultural exchange, has reshaped the world. It has enabled the free flow of goods and information, fostering economic growth and cultural diversity. However, it also raises challenges such as income inequality and cultural homogenization. 

In a globalized world, businesses expand internationally, but local industries can suffer. Moreover, while globalization promotes shared knowledge, it can erode local traditions. Striking a balance between the benefits and drawbacks of globalization is essential to ensure a more equitable and culturally diverse global community, where economies thrive without leaving anyone behind.

Also Read: Essay on Save Environment: Samples in 100, 200, 300 Words

Essay on Globalisation in 150 Words

Globalization is the process of increasing interconnectedness and interdependence among countries, economies, and cultures. It has transformed the world in various ways.

Economically, globalization has facilitated the flow of goods, services, and capital across borders. This has boosted economic growth and reduced poverty in many developing nations. However, it has also led to income inequality and job displacement in some regions.

Culturally, globalization has resulted in the spread of ideas, values, and cultural products worldwide. While this fosters cultural exchange and diversity, it also raises concerns about cultural homogenization.

Technologically, globalization has been driven by advances in communication and transportation. The internet and smartphones have connected people across the globe, allowing for rapid information dissemination and collaboration.

In conclusion, globalization is a complex phenomenon with both benefits and challenges. It has reshaped the world, bringing people closer together, but also highlighting the need for responsible governance and policies to address its downsides.

Also Read: Essay on Unity in Diversity in 100 to 200 Words

Essay on Globalisation in 200 Words

Globalization, a multifaceted phenomenon, has reshaped the world over the past few decades. It involves the interconnectedness of economies, cultures, and societies across the globe. In this essay, we will briefly discuss its key aspects and impacts.

Economically, globalization has led to increased international trade and investment. It has allowed companies to expand operations globally, leading to economic growth in many countries. However, it has also resulted in income inequality and job displacement in some regions.

Culturally, globalization has facilitated the exchange of ideas, values, and traditions. This has led to a more diverse and interconnected world where cultures blend, but it can also challenge local traditions and languages.

Socially, globalization has improved access to information and technology. It has connected people across borders, enabling global activism and awareness of worldwide issues. Nonetheless, it has also created challenges like cybercrime and privacy concerns.

In conclusion, globalization is a double-edged sword. It offers economic opportunities, cultural exchange, and global connectivity, but it also brings about disparities, cultural tensions, and new global challenges. To navigate this complex landscape, the world must strive for responsible globalization that balances the interests of all stakeholders and promotes inclusivity and sustainability.

Related Articles

The movement of goods, technologies, information, and jobs between countries is referred to as globalisation. 

Globalization as a phenomenon began with the earliest human migratory routes, or with Genghis Khan’s invasions, or travel across the Silk Road.

Globalisation allows wealthy nations to access cheaper labour and resources, while also providing opportunity for developing and underdeveloped nations with the jobs and investment capital they require.

For more information on such interesting topics, visit our essay-writing page and follow Leverage Edu ! 

Malvika Chawla

Malvika is a content writer cum news freak who comes with a strong background in Journalism and has worked with renowned news websites such as News 9 and The Financial Express to name a few. When not writing, she can be found bringing life to the canvasses by painting on them.

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• Globalisation Essay

Essay on Globalisation

Globalization means the integration of economies and societies through the flow of information, ideas, technology, goods, services, capital, finance, and people. The true meaning of Globalization in a broad sense is connecting in all areas of human life. It is the process by which other companies or organizations enhance their international reputation or start operating internationally. 

Globalization began thousands of years ago when people and companies bought and sold in distant lands. In the Middle Ages, Central Asia was connected to China and Europe via the famous Silk Road. After World War II and the last two decades, governments of many countries have adopted free-market economies. They have greatly increased their own production potential and created countless new opportunities for international trade and investment. New routes and means to transport goods have been discovered, which has allowed the people to expand their business easily and efficiently. 

The government has reduced all trade barriers and concluded new international agreements to promote trade in goods, services and investment. This profitable action has created opportunities for international trade. In foreign markets, companies with these new opportunities set up new factories and establish production and marketing relationships with foreign partners. Hence, Globalization is defined as an international industrial and financial enterprise.

Overview of Globalization

Globalization means the assimilation of economics and societies through the flow of information, ideas, technologies, goods, services, capital, finance, and people. The real meaning of Globalization in a broad sense is connectivity in all aspects of human life. It is the process where the businesses or other organizations expand international authority or start operating on an international scale.

How the Existence of Globalization Came Into Being?

Globalization had started many thousands of years ago when people and corporations were buying and selling across lands at great distances. In the middle age, Central Asia connected with China and Europe through the famed Silk Road. After the Second World War II and during the last two decades, the governments of many countries have adopted free-market economic systems. They increased their own productive potential immensely and created innumerable new opportunities for international trade and investment.

The governments have reduced all barriers to commerce and established new international agreements to promote trade in goods, services and investments. These beneficial measures gave rise to opportunities for global trade. With these new opportunities in the foreign markets, corporations established new factories and started production and marketing alliances with foreign partners. Hence, Globalization is defined as an international industrial and financial business structure.

Advantages and Disadvantages

The frontiers of the state with increased confidence in the market economy and renewed policies in the private capital and resources, a process of structural adjustment spurred by the studies and with the support of the World Bank and other international organizations have started in many of the developing countries. Globalization has also brought in new opportunities to developing countries. Greater access to developed country markets and technology transfer has promised to improve their productivity and higher standards. 

At the same time, Globalization has also created challenges like growing inequality across and within nations, instability in the financial market and environmental deterioration. Globalization is a fascinating exhibition that can be understood as a global system of competition and connectivity. It has created tough competition among countries and global corporations.

Impact of Globalization in India

The British Colonial rule had destroyed the self-sufficient economy of India and left India to be the poorest Independent country. Our first Prime Minister gave preference to a mixed economy to boost the economic condition of the country. Public sectors were set up along with the private enterprises, but because of the socialistic model of the economy, the new strategy did not produce profitable results. Due to this, a number of public sectors became sick and the growth rates of production began to fall. 

During that time, the poverty of the people in India was increasing at an alarming rate and because of low domestic savings and acute balance of payment crisis, there was no adequate capital for investment. During that time of crisis, Prime Minister PV Narsimha Rao introduced the policy of liberalization, privatization to overcome the financial situation. 

India opened up to Globalization after the economic policy of 1991 came into force. Mounting debts and pressure from the International Monetary Fund drove the nation to go global. The process of Globalization has been an integral part of the recent economic growth of India. Globalization has played a very significant role in the growth of export, leading to the expansion of the job market in India. One of the major sectors of Globalization in India has been in the growth of outsourced IT and Business Process Outsourcing services. There has been an incredible increase in the number of skilled professionals in India employed by domestic and foreign companies to cater service to the customers globally, especially in the USA and Europe. 

There was not a doubt that Globalization in India brought a monumental change in the living standards of the people. People in India realized many benefits from Globalization. The establishment of multinational companies generating billions of jobs and access to umpteen numbers of brands and an increase in the forex reserves of the country took India to a higher platform globally. Despite this monumental change in the economy of the country, India also faced the challenges of severe competition from the foreign market and the domestic producers started fearing marginalization and pulverization because of the better quality products produced by the foreign producers.

Globalization had both desirable and undesirable consequences for India and the world. Even though it has accelerated progress in some countries, it has also widened the gap between the rich and the poor.

The impact of Globalization has been both positive and negative on the entire world, but we can surely hope for more advancement in the global economy due to this process.

FAQs on Globalisation Essay

1. How Did Globalization Help India to Improve the Economic Conditions?

Globalization generated umpteen employment opportunities for the people of India by establishing multinational companies. The policy of liberalization and privatization invited foreign traders to do business with India. This has increased the inflow of men, money, material, labor, technology, etc., from foreign countries to India. People have access to foreign brands and the living standards have improved drastically.

2. How is Globalization a Threat to Domestic Producers?

The domestic producers fear marginalization and pulverization because of the entry of foreign and better quality products.

3. What are the advantages and disadvantages of Globalization?

With increasing confidence in market economies and new policies on private capital and resources, many developing countries are beginning to adapt to developments with the support of the World Bank and other international institutions involved in research and development. Globalization also offers new opportunities for developing countries. Greater access to markets in developed countries and the transfer of technology will increase their productivity and demand.

At the same time, Globalization has created challenges such as increasing inequality between and within countries, instability of financial markets and environmental degradation. Globalization is an interesting exhibition that can also be seen as a system of competition and international relations. This has created intense competition between countries and international companies. 

4. What do you mean by Globalization?

Globalization means the integration of economies and societies through the flow of information, ideas, technology, goods, services, capital, finance, and people. The true meaning of Globalization in a broad sense is a connectedness in all areas of human life. It is the process by which other companies or organizations enhance their international reputation or start operating internationally. Globalization has its own benefits and drawbacks. We can learn more about Globalization and how to write an essay on it in detail on the Vedantu website, which has all the necessary materials that students need in order to write an essay on Globalization. 

5. How can Globalization help India improve its economic situation?

In our present times, Globalization has been a boon to many people as it not only allows companies to expand their business but also makes things accessible for everyone. In a simple sense, we can say that it helps in connecting people with the world. Globalization has created many job opportunities in India through the creation of multinational companies. Policies of liberalization and privatization have encouraged foreign traders to trade with India. This has increased the number of people, money, materials, labor, technology and so on—inflows from abroad to India. People have access to foreign brands and the standard of living has improved significantly.

6. How does Globalization threaten domestic producers?

Domestic producers are afraid of marginalization and due to the entry of foreign and better quality products into the market. Globalization can be associated with increasing income and wealth inequality. Many of the world's poorest people lack access to basic technologies and public goods. They are excluded from treatment. Some critics of globalization point to the loss of economic and cultural diversity as international multinational giants and brands dominate domestic markets in many countries. Globalization can hinder competition if international companies with dominant brands and high technology gain a foothold in key markets, be it telecommunications, the automotive industry, and so on.

7. What are the main industries that have grown tremendously because of Globalization?

The integration of national economies into the global economy is one of the most important developments of the last century. This process of integration, often referred to as Globalization, has manifested itself in a tremendous increase in cross-border trade.

The outsourcing business has grown exponentially due to Globalization. The main industries resulting from Globalization are trade and commerce. Automobile companies, clothing manufacturers and transportation, are the three main industries taken over as a result of Globalization.

Essay on Globalization for Students and Children

500+ words essay on globalization.

Globalization refers to integration between people, companies, and governments. Most noteworthy, this integration occurs on a global scale. Furthermore, it is the process of expanding the business all over the world. In Globalization, many businesses expand globally and assume an international image. Consequently, there is a requirement for huge investment to develop international companies.

How Globalization Came into Existence?

First of all, people have been trading goods since civilization began. In the 1st century BC, there was the transportation of goods from China to Europe. The goods transportation took place along the Silk Road. The Silk Road route was very long in distance. This was a remarkable development in the history of Globalization. This is because, for the first time ever, goods were sold across continents.

Globalization kept on growing gradually since 1st BC. Another significant development took place in the 7th century AD. This was the time when the religion of Islam spread. Most noteworthy, Arab merchants led to a rapid expansion of international trade . By the 9th century, there was the domination of Muslim traders on international trade. Furthermore, the focus of trade at this time was spices.

True Global trade began in the Age of Discovery in the 15th century. The Eastern and Western continents were connected by European merchants. There was the discovery of America in this period. Consequently, global trade reached America from Europe.

From the 19th century, there was a domination of Great Britain all over the world. There was a rapid spread of international trade. The British developed powerful ships and trains. Consequently, the speed of transportation greatly increased. The rate of production of goods also significantly increased. Communication also got faster which was better for Global trade .

Finally, in 20th and 21st -Century Globalization took its ultimate form. Above all, the development of technology and the internet took place. This was a massive aid for Globalization. Hence, E-commerce plays a huge role in Globalization.

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Impact of Globalization

First of all, Foreign Direct Investment (FDI) increases at a great rate. This certainly is a huge contribution of Globalization. Due to FDI, there is industrial development. Furthermore, there is the growth of global companies. Also, many third world countries would also benefit from FDI.

Technological Innovation is another notable contribution of Globalization. Most noteworthy, there is a huge emphasis on technology development in Globalization. Furthermore, there is also technology transfer due to Globalization. The technology would certainly benefit the common people.

The quality of products improves due to Globalization. This is because manufacturers try to make products of high-quality. This is due to the pressure of intense competition. If the product is inferior, people can easily switch to another high-quality product.

To sum it up, Globalization is a very visible phenomenon currently. Most noteworthy, it is continuously increasing. Above all, it is a great blessing to trade. This is because it brings a lot of economic and social benefits to it.

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Impact of Globalisation (Revision Essay Plan)

Last updated 11 Jan 2022

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Here is a suggested answer to a question on the impact of globalisation on developed and developing countries.

Introductory Context

An estimated 9 percent of the global population still lives below the international poverty line of US$1.90 PPP a day.Success in reducing poverty in East Asia is clear with 7 percent of the population in the region living below the US$3.20 PPP line and 25 percent living below the US$5.50 PPP poverty line in 2018. However, almost 70 percent of Sub-Saharan Africa’s population lives on less than US$3.20 per day. Progress in cutting extreme poverty has been halted by the pandemic. The World Bank estimated that the pandemic pushed between 119 and 124 million people into extreme poverty around the globe in 2020. Many developing countries have limited resilience to the impact of economic shocks and threats from climate change.”.

Source: Adapted from the World Bank Poverty Report, 2021

To what extent have the economic benefits of globalisation favoured developed over developing countries? (25 marks)

KAA Point 1

Globalisation involves deeper integration between countries through networks of trade, capital flows, ideas, technologies and movement of people. One argument that globalisation has favoured high-income countries lies in the growing dominance of TNCs from advanced nations. TNCs base their manufacturing, assembly, research and retail operations across several countries, and many have become synonymous with globalisation namely Nike, Apple, Amazon, Google (Alphabet) and Samsung. Some have annual revenues many times higher than the GDP of smaller low-income countries and there has been fierce criticism of numerous TNCs for following tax avoidance strategies such as transfer pricing. This has reduced tax revenues for governments in developing nations which then hampers their ability to use fiscal policy to fund public services such as education and basic health care. The effect is to limit progress in reducing extreme poverty and improving human development outcomes.

Evaluation Point 1

A counter argument is that globalisation is associated with a steady reduction in import tariffs around the world which has then improved access to high-income markets for businesses from emerging countries. Many nations in east Asia have achieved reductions in extreme poverty driven by export-led growth. The extract says that only 7 percent of this region’s population now live below the US$3.20 PPP poverty line and continued high growth – as economies recover from the effects of the pandemic - will lead to improvements in per capita incomes and living standards. Indeed, sixty percent of the value of world GDP now comes from emerging market and developing economies and several countries have their own TNCs operating on a global scale. The recent success of countries such as South Korea, India and Vietnam is testimony to the opportunities that globalisation has offered developing nations who have developed competitive advantage across a range of industries.

KAA Point 2

A second argument supporting the question is that nations succeeding in a globalizing world have diversified economies, a workforce with flexible skills and governments with fiscal resources to overcome external shocks such as the pandemic. In contrast, poorer low-income countries rely heavily on the production and export of primary commodities or incomes from tourism, both of which have been hit by the global recession in 2020-21. Many poorer nations also haveinadequate infrastructure which increases the costs of trade and their direct tax revenues as a share of GDP are low because of sizeable informal economies and persistently low per capita incomes. This means that national governments rely heavily on external debt, and many have low currency reserves. They are therefore more exposed to economic, financial and public health shocks. This is evidenced by the differences in vaccination rates between rich and low-income countries. As of January 2022, only 9% of people in low-income countries have received at least one dose and per capita incomes may take years to reach pre-2020 levels.

Evaluation Point 2

In evaluation, the globalisation process has been a catalyst for economic reforms in low and middle-income countries. Consider the example of Vietnam which has transitioned to a socialist oriented market economy and successfully attracted inward FDI from companies such as LG and Samsung. FDIhas flowed in helped by low unit labour costs costs, improving infrastructure and human capital and a deregulated business environment whilst the Vietnamesegovernment has moved to a managed floating exchange rateto help reduce some of the risks from regional and global economic shocks. Vietnam is a good example of a country that has successfully progressed from a low income to a low-middle income nation over the last two decades. The valueof their external trade accounts for roughly 180% of national output, more than any other country at its level of per-person GDP. And their educational scores on standardized tests are on a par with Germany and Austria.

Final Reasoned Comment

Overall, it is hard to reach a firm view on this question because globalisation as a process is uneven and not inevitable. Before and during the pandemic, there was evidence of a switch towards “regionalisation” rather than full-throttled globalisation. For example, most sub-Saharan African countries have joined the African Continental Free Trade Area which seeks to boost intra-regional trade and investment and encourage economies of scale among African businesses so that they can better compete against the dominance of Western TNCs. Developing nations often struggle to compete with developed countries, therefore it is argued free trade benefits high-income economies more. Gains from globalisation will never be equitably distributed.And this sense of deepening inequality and opportunity risks a further shift to tariff and non-tariff barriers to trade and moves towards economic nationalism.

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• Deglobalisation
• Hyper-globalisation
• Transnational Businesses
• Developing countries

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Essay on Globalisation

List of essays on globalisation, essay on globalisation – definition, existence and impact (essay 1 – 250 words), essay on globalisation (essay 2 – 250 words), essay on globalisation – in india (essay 3 – 400 words), essay on globalisation – objectives, advantages, disadvantages and conclusion (essay 4 – 500 words), essay on globalisation – for school students (class 6,7,8,9 and 10) (essay 5 – 600 words), essay on globalisation (essay 6 – 750 words), essay on globalisation – for college and university students (essay 7 – 1000 words), essay on globalisation – for ias, civil services, ips, upsc and other competitive exams (essay 8 – 1500 words).

The worldwide integration of people, services and interests is what globalisation is all about. Since the last decade, there has been a tremendous focus on globalisation with everyone trying to have a reach at even the remotest locations of the world. This has probably been possible due to the advancement in technology and communication.

Audience: The below given essays are especially written for school, college and university students. Furthermore, those students preparing for IAS, IPS, UPSC, Civil Services and other competitive exams can also increase their knowledge by studying these essays.

The word ‘Globalization’ is often heard in the business world, in corporate meetings, in trade markets, at international conferences, in schools, colleges and many other places. So what does globalization symbolize? Is it a new concept or did it exist earlier? Let’s see.

Definition:

Globalization refers to the integration of the world nations by means of its people, goods, and services. The statement – ‘ globalization has made the world a small village ’ is very true.

Countries inviting foreign investment, free trade and relaxation in the visa rules to allow seamless movement of people from one country to another are all part of globalization.

In a nutshell, globalization has reduced the distance between nations and its people.

Many among us refer to the current period that we live in as ‘The Era of Globalization’ and think that the process of globalization has started only recently. But the real fact is that globalization is not a new phenomenon . The world was moving towards globalization from a very long time. The term globalization was in existence since mid-1980s. But it was only from the early 21 st century that globalization picked up momentum due to the advancements in technology and communication.

Impact of Globalization:

Globalization has more positive outcomes than the negative ones. The impact of globalization on the developing countries such as India, China and some African countries are overwhelming. Foreign investments have created a lot of employment opportunities in the developing countries and have boosted their economy. Globalization has also enabled people to interchange their knowledge and culture.

Conclusion:

Although the world is not completely globalized, we can very well say that globalization is the best way to achieve equality among nations.

In simple words, globalization means the spreading of a business, culture, or any technology on an international level. When the boundaries of countries and continents matter no more, and the whole world becomes one global village in itself. Globalization is an effort to reduce the geographical and political barriers for the smooth functioning of any business.

There are four main factors that form the four pillars of globalization. These are the free flow of goods, capitals, technology, and labors, all across the world. Although, many of the experts that support globalization clearly refuse to acknowledge the free flow of labor as their work culture.

The international phenomenon of global culture presents many implications and requires a specific environment to flourish. For instance, it needs the other countries to come to a mutual agreement in terms of political, cultural, and economic policies. There is greater sharing of ideas and knowledge and liberalization has gained a huge importance.

Undoubtedly, globalization helps in improving the economic growth rate of the developing countries . The advanced global policies also inspire businesses to work in a cost-effective way. As a result, the production quality is enhanced and employment opportunities are also rising in the domestic countries.

However, there are still some negative consequences of globalization that are yet to be dealt with. It leads to greater economic and socio-cultural disparities between the developed and the developing countries. Due to the MNC culture, the small-scale industries are losing their place in the market.

Exchanges and integration of social aspect of people along with their cultural and economic prospects is what we term as Globalization. It is considered as a relatively new term, which has been in discussion since the nineties.

Initial Steps towards Globalization:

India has been an exporter of various goods to other countries since the earlier times. Hence Globalization, for India, is not something new. However, it was only around in the early nineties that India opened up its economy for the world as it faced a major crisis of severe crunch of foreign exchange. Since then, there has been a major shift in the government’s strategies while dealing with the PSUs along with a reduction in the monopoly of the government organisations perfectly blended with the introduction of the private companies so as to achieve a sustainable growth and recognition across the world.

The Measurement of Success:

The success of such measures can be measured in the form of the GDP of India which hovered around 5.6% during the year 1990-91 and has been now around 8.9% during the first quarter of 2018-19. In fact, in the year 1996-97, it was said to have peaked up to as high as 77.8%. India’s global position is improved tremendously due to the steady growth in the GDP thus furthering the impact of globalization on India. As on date, India is ranked as the sixth biggest economy in the world. This globalization leading to the integration and trade has been instrumental in reducing the poverty rate as well.

However, given the fact that India is the second most populated country of the world, after China, this growth cannot be considered as sufficient enough as other countries such as China have increased their growth rates at much faster pace than India. For instance, the average flow of FDI in India, over the past few years has been around 0.5% of the GDP while for countries such as China it has been around 5% and Brazil has had a flow of around 5.5%. In fact, India is considered among the least globalized economy among the major countries.

Summarily, there has been a tremendous increase in the competition and interdependence that India faces due to Globalization, but a lot is yet to be done. It is not possible for a country to ignore the developments and globalization occurring in the rest of the world and one need to keep the pace of growth at a steady rate or else you may be left far behind.

The twentieth century witnessed a revolutionary global policy aiming to turn the entire globe into a single market. The motive of globalization can broadly define to bring substantial improvement in the living condition of people all around the world, education, and shelter to everybody, elimination of poverty, equal justice without any race or gender consideration, etc. Globalization also aims to lessen government involvement in various development activities, allowing more direct investors/peoples’ participation cutting across border restrictions thus expected to reap reasonable prosperity to human beings.

Main Objectives of Globalization:

The four main aspects of globalization are; Capital and Investment movements, Trade and Transactions, Education and Spread of knowledge, along with Migration and Unrestricted Movement of People.

In simpler terms, globalization visualizes that one can purchase and sell goods from any part of the world, communicate and interact with anyone, anywhere in the world and also enables cultural exchange among the global population. It is operational at three levels namely, economic globalization, cultural globalization, and political globalization. Right from its inception, the impact of globalization has both advantages and disadvantages worldwide.

Advantages of Globalization:

As the word itself suggests, this policy involves all the nations across the globe. The lifting of trade barriers can have a huge impact especially in developing countries. It augments the flow of technology, education, medicines, etc., to these countries which are a real blessing.

Globalization expects to create ample job opportunities as more and more companies can extend their presence to different parts of the world. Multinational companies can establish their presence in developing countries. Globalization gives educational aspirants from developing and underdeveloped countries more quality learning opportunities. It leads not only to the pursuit of best higher education but also to cultural and language exchanges.

Globalization also enhances a faster flow of information and quick transportation of goods and services. Moreover one can order any item from anywhere merely sitting at home. Another plus point of globalization is the diminishing cultural barriers between nations as it offers free access and cultural interactions . Also, it has been observed that there is a considerable reduction of poverty worldwide due to globalization . In addition to this, it also enables the effective use of resources.

Disadvantages of Globalization:

Globalization turned out to be a significant threat to the cottage and small-scale industries as they have to compete with the products of multi-national companies. Another dangerous effect of globalization is the condition of weak sections of the society, as they are getting poorer and the rich are getting richer. The situation leads to the domination of economically rich countries over emerging countries and the increase of disparity.

The actions of multi-national companies are deplorable and always facing criticism from various social, government and world bodies as they are incompetent in offering decent working conditions for the workers. Irrational tapping of natural resources which are instrumental in causing ecological imbalance is another major accusation against multi-national companies.

Globalization is also blamed to have paved the way for human trafficking, labor exploitation and spread of infectious diseases too. In addition to all these, if any economic disaster hit a country and if they subsequently suffer from economic depression, its ripples are felt deeply in other countries as well.

Despite all its disadvantages, globalization has transformed the entire globe into a single market irrespective of its region, religion, language, culture, and diversity differences. It also leads to an increase in demand for goods, which in turn calls for more production and industrialization. Our focus should be to minimize the risks and maximize the positive outcome of global policy, which in turn can help for a sustainable long-standing development for people all around the world.

Introduction:

Globalization is the procedure of global political, economic, as well as cultural incorporation of countries . It lets the producers and manufacturers of the goods or products to trade their goods internationally without any constraint.

The businessman fetches huge profit as they easily get low price workforce in developing nations with the concept of globalization. It offers a big prospect to the firms who wish to deal with the global market. Globalization assists any nation to contribute, set up or amalgamate businesses, capitalize on shares or equity, vending of services or products in any country.

How does the Globalization Work?

Globalization benefits the international market to the entire deliberate world like a solitary marketplace. Merchants are spreading their extents of trade by aiming world as a worldwide community. In the 1990s, there was a limit of importing some goods that were already mass-produced in India such as engineering goods, agricultural products, toiletries, food items, etc.

But, in the 1990s the rich countries pressurize the WTO (World Trade Organization), World Bank (affianced in improvement financing activities), and IMF (International Monetary Fund) to let other nations spread their trades by introducing market and trade in the deprived and emerging countries. The process of liberalization and globalization in India began in the year 1991 below the Union Finance Minister Mr. Manmohan Singh.

After numerous years, globalization has fetched major uprising inside the Indian marketplace when international brands arrived in India such as KFC, PepsiCo, Mc. Donald, Nokia, IBM, Aiwa, Ericsson, etc., and began the delivery of an extensive variety of quality goods at low-cost rates.

The entire leading brands presented actual uprising of globalization at this time as a marvellous improvement to the economy of an industrial sector. Rates of the quality goods were also getting low owing to the cut-throat war happening in the marketplace.

Liberalization and globalization of the businesses in the Indian marketplace is submerging the quality of imported goods but influencing the local Indian businesses badly in large part causing the job loss of illiterate and poor labors. Globalization has remained a goldmine for the customers, but it is also a burial ground for the small-scale manufacturers in India.

Positive Influences of Globalisation:

Globalization has influenced the education sectors and students of India predominantly by making accessible the education material and enormous info on the internet. Association of Indian universities with the overseas universities has fetched a massive modification in the education business.

The health industries are too influenced enormously by the globalization of health observing electronic apparatuses, conventional drugs, etc. The trade globalization in the agricultural sector has provided a range of high-quality seeds possessing disease-fighting property. But, it is not beneficial for the underprivileged Indian agriculturalists owing to the reason of expensive seeds as well as agricultural equipment.

Globalization has given an enormous rebellion to the occupation sector by increasing the growth of trades related to the handloom , cottage, artisans and carving, carpet, jewellery, ceramics, and glassware, etc.

Globalization is definitely required by the people and nation to progress and turn into an established society and country. It benefits in expanding our visualization and thoughts. It also aids in endorsing the philosophy that we fit in a huge crowd of persons, i.e., the humankind. Once the two nations congregate, they flourish by sharing their beliefs, thoughts, opinions, customs, and behaviors. People come to know new things and also acquire a chance to discover and get acquainted with other values.

Globalization has provided many reasonably priced valued goods and complete economic welfares to the emerging nations in addition to the employment. But, it has also given growth to the crime, competition, terrorism, anti-national activities, etc. Thus, along with the pleasure it has supplied some grief too.

Globalization is a term that we hear about every now and then. Question is; do we really know what it is all about? Globalization is defined as the process of integration and interaction among people, cultures and nations who come together in order to get things done easily through contact. Globalization began with the migration of people from Africa to different parts of the world. Global developments have been achieved in various sectors through the different types of globalization. The effects of globalization have been felt in every part of the world and more people continue to embrace it. Globalization has some of its core elements that help in the process.

Types of Globalization:

Globalization does not just transform a sector unless the strategies are related to that specific sector. The first type of globalization is financial and economic globalization whereby interaction takes place in the financial and economic sectors especially through stock market exchange and international trade. The other type is technological globalization which involves the integration and connection of different nations through technological methods like the internet. Political globalization transforms the politics of a nation through interactions with adoption of policies and government that cut across other nations. Cultural globalization is basically the interaction of people from different cultures and sharing. Ecological globalization is the viewing of the earth as one ecosystem and sociological globalization is on equality for all people.

Elements of Globalization:

Globalization works with characteristic elements. Trade agreements is one of the components that significantly benefits the economic and financial globalization. These trade agreements have been designed to promote and sustain globalization by preventing barriers that inhibit trade among nations or regions. Another element is capital flow that is concerned with the measures of either a decline or a rise in domestic or foreign assets. Migration patterns is a socio-economical and cultural element that monitors the impacts of immigration and emigration actively. The element of information transfer involves communications and maintains the functioning of the markets and economies. Spread of technology is an element of globalization that facilitates service exchanges. Without these elements, globalization would have faced many challenges, which would even stagnate the process of globalization.

Impacts of Globalization:

The impact of globalization is felt differently among individuals but the end result will be either positive or negative. Globalization has impacts on the lives of individuals, on the aspects of culture, religions and education. The positive impacts of globalization include the simplification of business management through efficiency. In business, the quality of goods and services has increased due to global competition. Foreign investment has been facilitated by globalization and the global market has been able to expand. Cultural growth has been experienced through intermingling and accommodation. Interdependence among nations has developed and more people have been exposed to the exchange program between nations. Improvement of human rights and legal matters has improved through media and technology sharing. Poverty has been alleviated in developing countries due to globalization and also employment opportunities are provided. Through technology, developments have been positively influenced in most parts of the world.

Although globalization has positive impacts, the negative impacts will remain constant unless solutions are sought. One of the negative effects of globalization is job insecurity for some people. Through globalization, more innovations are achieved, for e.g., technology causes automation and therefore people get replaced and they lack jobs. Another negative impact is the frequent fluctuation of prices of commodities that arises from global competitions. On the cultural side, the fast food sector has become wide spread globally, which is an unhealthy lifestyle that was adopted due to globalization. Also, Culture has been negatively affected for people in Africa because they tend to focus more on adopting the western culture and ignore their cultural practices.

Possible Solutions to the Negative Impacts of Globalization:

Globalization has impacted the society negatively and some of the solutions might help to mitigate the impacts. When adopting cultures from other people, it is important to be keen on the effects of the culture on the people and the existing culture being practiced. For example, Africans should not focus more of the western culture such that they ignore their own culture.

In conclusion, it is evident that globalization results in both negative and positive consequences. The society should embrace the positive and mitigate the negative impacts. Globalisation is a dynamic process which involves change, so flexibility among people is a must.

The buzzword befitted to describe the growth of Modern Indian economy is ‘Globalization’. But what exactly is Globalization? Globalization can be defined as integrating the economy of a country with the rest of the countries of the world. From the Indian perspective, this implies encouraging free trade policies, opening up our economy to foreign direct investment, removing constraints and obstacles to the entry of multinational corporations in India, also allowing Indian companies to set up joint ventures abroad, eliminating import restrictions, in-short encouraging Free Trade policies.

India opened its markets to Global Trade majorly during the early Nineties after a major economic crisis hit the country. New economic reforms were introduced in 1991 by then Prime Minister Shri. P V. Narasimha Rao and Finance Minister at the time, Dr. Manmohan Singh. In many ways, the new economic policies positively contributed to the implementation of the concept of Globalization in India.

It’s Impact:

1. Economic Impact :

Globalization in India targets to attract Multinational Companies and Institutions to approach Indian markets. India has a demography with a large workforce of young citizens who  are in need of jobs. Globalization has indeed left a major impact in the jobs sector. Indian companies are also expanding their business all over the world. They are driving funds from the bigwigs of the Global economy.

The Best example in today’s time is OYO Rooms, a budding Indian company in the hospitality sector. OYO Rooms recently made headlines when it declared to raise a fund close to $1 Billion from Japan’s Soft Bank Vision Fund. Globalization has also led the Indian Consumer market on the boom. The Giant of FMCG (fast-moving consumer goods) sector WALMART is also enthusiastic and actively investing in the India market.

2. Socio-Cultural impact on the Indian Society:

The world has become a smaller place, thanks to the social networking platforms blooming of the internet. India is a beautiful country which takes immense pride in “Unity in Diversity” as it is home to many different cultures and traditions. Globalization in India has left a lasting impression on the socio-cultural aspect of Indian society.

Food chains like McDonald’s are finding its way to the dining tables. With every passing day, Indians are indulging more and more in the Western culture and lifestyle. But Globalization in India has also provided a vibrant World platform for Indian Art, Music, Clothing, and Cuisine.

The psychological impact on a common Indian Man: The educated youth in India is developing a pictorial identity where they are integrating themselves with the fast-paced, technology-driven world and at the same time they are nurturing the deep roots of Indian Culture. Indians are fostering their Global identity through social media platforms and are actively interacting with the World community. They are more aware of burning issues like Climate Change, Net neutrality, and LGBT rights.

Advantages:

India has taken the Centre Stage amongst the Developing Nations because of its growing economy on the World Map. Globalization in India has brought tremendous change in the way India builds its National and International policies. It has created tremendous employment opportunities with increased compensations.

A large number of people are hired for Special Economic Zones (SEZs), Export Processing Zones (EPZs), etc., are set up across the country in which hundreds of people are hired. Developed western countries like USA and UK outsource their work to Indian companies as the cost of labour is cheap in India. This, in turn, creates more employment. This has resulted in a better standard of living across the demographic of young educated Indians. The Indian youth is definitely empowered in a big way.

Young lads below the age of 20 are now aspiring to become part of global organizations. Indian culture and morals are always strengthening their roots in modern world History as the world is now celebrating ‘International Yoga Day’ on 21st June every year. Globalization in India has led to a tremendous cash flow from Developed Nations in the Indian market. As a positive effect, India is witnessing the speedy completion of Metro projects across the country. Another spectacular example of newly constructed High-end Infrastructure in the country is the remarkable and thrilling ‘Chenani-Nashri Tunnel’, Longest Tunnel in India constructed in the State of Jammu and Kashmir. Globalization has greatly contributed in numerous ways to the development of Modern India.

Disadvantages:

As there are so many pros we cannot turn a blind eye to the cons of Globalization which are quite evident with the Indian perspective. The worst impact is seen in the environment across Indian cities due to heavy industrialization. Delhi, the capital of India has made headlines for the worst ever air pollution, which is increasing at an alarming rate.

India takes pride in calling itself an Agriculture oriented nation, but now Agriculture contributes to fragile 17% of the GDP. Globalization in India has been a major reason for the vulnerable condition of Indian Farmers and shrinking Agriculture sector. The intrusion of world players and import of food grains by the Indian Government has left minimal space for Indian farmers to trade their produce.

The impact of westernization has deeply kindled individualism and ‘Me factor’ and as a result, the look of an average Indian family has changed drastically where a Nuclear family is preferred over a traditional Joint family. The pervasive media and social networking platforms have deeply impacted the value system of our country where bigotry and homophobia are becoming an obvious threat.

One cannot clearly state that the impact of Globalization in India has been good or bad as both are quite evident. From the economic standpoint, Globalization has indeed brought a breath of fresh air to the aspirations of the Indian market. However, it is indeed a matter of deep concern when the Indian traditions and value system are at stake. India is one of the oldest civilizations and World trade has been the keystone of its History. Globalization must be practiced as a way towards development without compromising the Indian value system.

Globalisation can simply be defined as the process of integration and interaction between different people, corporations and also governments worldwide. Technology advancement which has in turn advanced means of communication and transportation has helped in the growth of globalisation. Globalisation has brought along with it an increase in international trade, culture and exchange of ideas. Globalisation is basically an economic process that involves integration and interaction that deals also with cultural and social aspects. Important features of globalisation, both modern and historically are diplomacy and conflicts.

In term of economy, globalisation involves services and goods, and the resources of technology, capital and data. The steamship, steam locomotive, container ship and jet engine are a few of the many technological advances in transportation while the inception of the telegraph and its babies, mobile phones and the internet portray technological advances in communications. These advancements have been contributing factors in the world of globalisation and they have led to interdependence of cultural and economic activities all over the world.

There are many theories regarding the origin of globalisation, some posit that the origin is in modern times while others say that it goes way back through history before adventures to the new world and the European discovery age. Some have even taken it further back to the third millennium. Globalisation on a large-scale began around the 1820s. Globalisation in its current meaning only started taking shape in the 1970s. There are four primary parts of globalisation, they are: transactions and trade, investments and capital movement, movement and migration of people and the circulation of knowledge and information. Globalization is subdivided into three: economic globalisation, political globalisation and cultural globalisation.

There are two primary forms of globalisation: Archaic and Modern Globalisations. Archaic globalisation is a period in the globalisation history from the period of the first civilisations until around the 1600s. Archaic globalisation is the interaction between states and communities and also how they were incepted by the spread by geography of social norms and ideas at different levels.

Archaic globalisation had three major requirements. First is the Eastern Origin idea, the second is distance, the third is all about regularity, stability and inter-dependency. The Silk Road and trade on it was a very important factor in archaic globalisation through the development of various civilisations from Persia, China, Arabia, Indian subcontinent and Europe birthing long distance economic and political relationships between them. Silk was the major item from China along the Silk Road; other goods such as sugar and salt were also traded.

Philosophies, different religious beliefs and varying technologies and also diseases also moved along the Silk Road route. Apart from economic trade, the Silk Road also was a means of cultural exchange among the various civilisations along its route. The cultural exchange was as a result of people’s movement including missionaries, refugees, craftsmen, robbers, artists and envoys, resulting in religions, languages, art and new technologies being exchanged.

Modern globalisation can be sub-divided into early modern and Modern. Early modern globalisation spans about 200 years of globalisation between 1600 and 1800. It is the period of cultural exchange and trade links increasing just before the modern globalisation of the late 19 th century. Early modern globalisation was characterised by Europeans empires’ maritime of the 16 th and 17 th centuries. The Spanish and Portuguese Empires were the first and then we had the British and Dutch Empires. The establishment of chartered companies (British East India Company and the Dutch East India Company) further developed world trade.

Modern Globalisation of the 19 th century was as a result of the famed Industrial Revolution. Railroads and steamships made both local and international transportation easier and a lot less expensive which helped improve economic exchange and movement of people all over the world, the transportation revolution happened between 1820 and 1850. A lot more nations have embraced global trade. Globalisation has been shaped decisively by the imperialism in Africa and in Asia around the 19 th century. Also, the ingenious invention in 1956 of the shipping container has really helped to quicken the advancement of globalisation.

The Bretton Woods conference agreement after the Second World War helped lay the groundwork for finance, international monetary policy and commerce and also the conception of many institutions that are supposed to help economic growth through lowering barriers to trade. From the 1970s, there has been a drop in the affordability of aviation to middle class people in countries that are developed. Also, around the 1990s, the cost of communication networks also drastically dropped thus lowering the cost of communicating between various countries. Communication has been a blessing such that much work can be done on a computer in different countries and the internet and other advanced means of communications has helped remove the boundary of distance and cost of having to travel and move from place to place just to get business done.

One other thing that became popular after the Second World War is student exchange programmes which help the involved students learn about, understand and tolerate another culture totally different from theirs, it also helps improve their language skills and also improve their social skills. Surveys have shown that the number of exchange students have increased by about nine times between 1963 and 2006.

Economic globalisation is differentiated from modern globalisation by the information exchange level, the method of handling global trade and expansionism.

Economic Globalisation:

Economic globalisation is just the ever increasing interdependence of economies of nations worldwide caused by the hike in movement across borders of goods, services, capital and technology. Economic globalisation is basically the means of increasing economic relationships between countries, giving rise to the birth of a single or global market. Based on the worldview, Economic globalisation can be seen as either a negative or positive thing.

Economic globalisation includes: Globalisation of production; which is getting services and goods from a source from very different locations all over the world to gain from the difference in quality and cost. There is globalisation of markets; which is the coming together of separate and different markets into one global market. Economic globalisation includes technology, industries, competition and corporations.

Globalisation today is all about less developed countries and economies receiving FDI (Foreign Direct Investment) from the more developed countries and economies, reduction in barriers to trade and to particular extent immigration.

Political Globalisation:

Political globalisation is going to on-the-long-run drop the need for separate nation or states. Institutions like the International Criminal court and WTO are beginning to replace individual nations in their functions and this could eventually lead to a union of all the nations of the world in a European Union style.

Non-governmental organisations have also helped in political globalisation by influencing laws and policies across borders and in different countries, including developmental efforts and humanitarian aid.

Political globalisation isn’t all good as some countries have chosen to embrace policies of isolation as a reactionary measure to globalisation. A typical example is the government of North Korea which makes it extremely difficult and hard for foreigners to even enter their country and monitor all of the activities of foreigners strictly if they allow them in. Citizens are not allowed to leave the country freely and aid workers are put under serious scrutiny and are not allowed in regions and places where the government does not want them to enter.

Intergovernmentalism is the treatment of national governments and states as the major basic factors for integration. Multi-level governance is the concept that there are many structures of authority interacting in the gradual emergence of political globalisation.

Cultural Globalisation:

Cultural globalisation is the transmission of values, ideas and meanings all over the world in a way that intensify and extend social relations. Cultural globalisation is known by the consumption of different cultures that have been propagated on the internet, international travel and culture media. The propagation of cultures helps individuals to engage in social relations which break regional boundaries. Cultural globalisation also includes the start of shared knowledge and norm which people can identify their cultures collectively; it helps foster relationships between different cultures and populations.

It can be argued that cultural globalisation distorts and harms cultural diversity. As one country’s culture is inputted into another country by the means of globalisation, the new culture becomes a threat to the cultural diversity of the receiving country.

Globalisation has made the world into one very small community where we all interact and relate, learn about other cultures and civilisations different from ours. Globalisation has helped improve the ease of doing business all around the world and has made the production of goods and services quite easy and affordable. Globalisation isn’t all good and rosy as it can be argued that Globalisation is just westernisation as most cultures and beliefs are being influenced by the western culture and belief and this harms cultural diversity. Nevertheless, the good of globalisation outweighs the bad so globalisation is actually a very good thing and has helped shape the world as we know it.

Economics , Globalisation

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Globalization and Its Impact on the 21st Century Global Marketplace Essay

Introduction, globalization: definition and causes, globalization: effects.

Being a ubiquitous phenomenon, globalization has affected a vast number of areas from business to culture, and it continues to have a profound impact on every facet of interactions (Singla, Ahuja, & Sethi, 2017). The business and communication environment has been affected by globalization to a significant degree as well (Aydin, Akinci, & Yilmaz, 2016). The global market has experienced impressive changes, with a massive improvement in the quality of services. The positive changes in product and service quality can be explained by the enhancement of diversity and the promotion of a multicultural dialogue between consumers and companies due to globalization.

Typically defined as the process of expanding multicultural connections between states in an attempt to enhance international communication, globalization can be seen as a direct effect of economic expansion (Menichinelli, 2016). Exploring new horizons, companies enter the realm of the global market, where they have to communicate with a vast range of players (Singla et al., 2017). However, the subject matter can also be interpreted as a process of cultural integration, which is also a legitimate way of viewing the phenomenon since it implies an enhanced dialogue between participants worldwide (Menichinelli, 2016). Among the key causes of globalization, the improvement of global infrastructure and a drop in the number of tariff barriers needs to be mentioned (Singla et al., 2017). Thus, globalization can be seen as a natural process occurring in the context of the modern economy.

General Effects

The phenomenon under analysis has mostly positive effects on the global economy in general. For instance, the introduction of multiple players into the field of the global economy leads to a steep rise in the levels of competition, thus, encouraging organizations to be innovative in their approach toward producing goods, delivering services, and communicating with their target audiences. In addition, the focus on multicultural communication leads to a drop in the number of misunderstandings and errors made by organizations in a cross-cultural dialogue.

Effects on the 21st-century Marketplace

Among the essential effects that globalization has had on the 21st-century marketplace, one must mention a steep rise in diversity levels (Cummings & Worley, 2014). Because of the focus that globalization has placed on intercultural communication, opportunities for catering to the needs of people from a number of socio-cultural and economic backgrounds have emerged (Singla et al., 2017). As a result, companies can attract diverse audiences and appeal to them respectively. Furthermore, the improved communication has led to a better understanding of target audiences’ needs. Thus, the existing demand is satisfied more efficiently due to the impact of globalization on the marketplace and the companies operating in it.

Moreover, globalization has affected supply chain management (SCM) to a considerable extent. With new technological advances and a strong focus on communication, global organizations use the global infrastructure to its best potential. The resulting drop in the instances of delays, product damage, and miscommunication shows that companies explore the opportunities that the global SCM provides to improve their services and meet customers’ needs (Cummings & Worley, 2014). Therefore, it can be assumed that globalization has vastly positive effects on the global marketplace.

Globalization has become an essential part of the modern world. The subject matter affects every aspect and facet of interactions between people worldwide, economic issues not being an exception. The global marketplace has been flourishing because of globalization due to the enhancement of SCM, communication enhancement, and the focus on quality. Furthermore, the recognition of multicultural issues leads to a vast improvement in the management of customer relationships and the dialogue with partners. Therefore, globalization can be seen as one of the crucial factors defining the existence of the 21st-century global marketplace.

Aydin, C., Akinci, M., & Yilmaz, O. (2016). The analysis of visible hand of government: The threshold effect of government spending on economic growth. International Journal of Trade, Economics and Finance, 7 (5), 170-178. Web.

Menichinelli, M. (2016). A framework for understanding the possible intersections of design with open, P2P, diffuse, distributed and decentralized systems. Disegno – The Journal of Design Culture, 3 (01-02), 44-71. Web.

Singla, A., Ahuja, I. P. S., & Sethi, A. P. S. (2017). The effects of demand pull strategies on sustainable development in manufacturing industries. International Journal of Innovations in Engineering and Technology, 8 (2), 27-34. Web.

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A Model for Expanding Your Business into Foreign Markets

• Joshua Conrad Jackson

Four strategies leaders should adopt when taking their brand abroad.

It used to be thought that globalization would flatten out cultural differences among countries and regions of the world, making it easier than ever for companies to move into foreign markets. According to a new study by the author and a colleague, however, cultural differences are greater today than they were 40 years ago, which explains why some major corporations have failed in their recent efforts to establish a foothold in new countries. Companies need to adapt, the author argues, and to that end in this article he presents a general model for global leadership in the face of cultural divergence.

Walmart in the 1990s seemed on pace to become a global giant. After rapid growth in the U.S. domestic market throughout the 1980s, the company opened its first international store in Mexico City in 1991, followed by Canada in 1994. By 1998 it had expanded to Germany and South Korea, betting that its “always the low price” approach to business would be enough to outcompete foreign vendors.

• Joshua Conrad Jackson is a Neubauer Family Assistant Professor at the University of Chicago’s Booth School of Business.

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The Origins of Starbucks: from Seattle Beginnings to Global Phenomenon

This essay is about the origins and growth of Starbucks, starting from its founding in Seattle in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker. Initially a coffee bean retailer, Starbucks transformed under Howard Schultz’s leadership into a global coffeehouse chain. Schultz introduced the Italian espresso bar concept, turning Starbucks into a place where customers could enjoy coffee in a welcoming environment. The essay details the company’s commitment to quality, innovation, and ethical sourcing, as well as its rapid expansion and ability to adapt to challenges. Starbucks’ story exemplifies vision and perseverance, making it a dominant name in the coffee industry.

How it works

The inception of Starbucks, a renowned name inseparable from global coffee culture, traces back to the Seattle, Washington. Its evolution from a solitary establishment to an expansive international coffee empire is as intricate as the myriad blends it offers. The genesis occurred in 1971 when Jerry Baldwin, Zev Siegl, and Gordon Bowker, driven by a collective ardor for superior coffee, ventured into entrepreneurship. They inaugurated the inaugural Starbucks outlet on 2000 Western Avenue within Seattle’s historic Pike Place Market, envisioning a haven for the finest coffee beans and accessories in their community.

The genesis of the moniker “Starbucks” and the emblematic logo emanated from maritime motifs. Borrowed from Herman Melville’s “Moby-Dick,” the name Starbuck evoked the allure of seafaring expeditions and the enduring legacy of coffee trade. The logo, featuring a dual-tailed siren from Greek mythology, encapsulated the mystique and allure of coffee. Starbucks, from its inception, wasn’t merely about dispensing coffee by the cup; it entailed a curated selection of premium roasted coffee beans, teas, and spices. Baldwin, Siegl, and Bowker meticulously curated their offerings, importing top-tier beans worldwide and masterfully roasting them to perfection.

In its nascent stage, Starbucks veered more towards specialty retail than the expansive coffeehouse chain it later burgeoned into. The founders prioritized enlightening their clientele on the nuances of coffee, underscoring the significance of freshness and the distinctive attributes of various beans. Their aim was to cultivate a community of coffee aficionados appreciative of the artistry behind crafting a sublime cup of coffee. This zealous commitment to excellence and education swiftly garnered Starbucks a devoted following among Seattle’s discerning coffee connoisseurs.

A pivotal juncture for Starbucks transpired in 1982 with the arrival of Howard Schultz, a New York native boasting a background in retail and marketing. Schultz, previously immersed in the realms of retail operations and marketing with Hammarplast, a Swedish housewares entity, was intrigued by Starbucks’ substantial investments in coffee makers. His curiosity led him to Seattle, whereupon being captivated by the company’s ethos, he assumed the role of marketing head. Though initially tasked with fortifying the retail facet of the enterprise, Schultz’s epiphanic sojourn to Italy in 1983 catalyzed a transformative vision for Starbucks.

In Milan, Schultz was enthralled by the vivacious coffee culture thriving within Italian espresso bars. These venues transcended mere coffee dispensation, serving as communal hubs for conversation, relaxation, and espresso indulgence. Schultz discerned an opportunity to transplant this ethos to the United States, envisaging Starbucks as more than a purveyor of coffee beans but as a convivial coffeehouse experience.

Upon returning to Seattle, Schultz fervently presented his vision to Starbucks’ founders, Baldwin, Siegl, and Bowker. Though initially met with skepticism due to their allegiance to the bean-selling model, Schultz persisted. In 1985, he charted an independent course, founding Il Giornale, a chain of coffeehouses embodying the Italian espresso bar ethos.

The pivotal moment arrived in 1987 when the original Starbucks proprietors opted to divest their ownership. Schultz seized the opportunity, orchestrating the merger of Il Giornale with Starbucks. With local investors’ support, he acquired Starbucks for $3.8 million, assuming the mantle of CEO. Immediately commencing the metamorphosis of Starbucks into the envisioned coffeehouse chain, Schultz ushered in an era where patrons could relish freshly brewed coffee, espresso concoctions, and delectable pastries in a hospitable ambiance. This heralded the onset of Starbucks’ exponential expansion.

Under Schultz’s stewardship, Starbucks adopted an aggressive growth trajectory, proliferating its outlets domestically and globally. By prioritizing a consistent and superior customer experience, Starbucks replicated its success across diverse markets. Each outlet was conceived as a “third place” for patrons, offering a welcoming milieu distinct from home or workplace, fostering relaxation, camaraderie, and productivity.

Starbucks’ commitment to excellence transcended its coffee offerings to encompass store ambiance, customer service, and corporate ethos. Schultz championed employee welfare, designating them as “partners” and endowing benefits like healthcare and stock options. This ethos fostered a motivated and dedicated workforce, a cornerstone of the company’s triumph.

Central to Starbucks’ ascendancy was its adeptness at adaptation and innovation. The company embraced emerging technologies, from complimentary Wi-Fi provision to a user-friendly mobile app facilitating pre-ordering and payment. Leveraging social media platforms like Facebook and Twitter, Starbucks cultivated customer engagement and community building, underscoring its relevance in an increasingly digital landscape.

Ethical sourcing and sustainability constituted another cornerstone of Starbucks’ success. Establishing the Coffee and Farmer Equity (C.A.F.E.) Practices, Starbucks ensured environmentally friendly and farmer-benefitting coffee sourcing. Additionally, the company invested in social and environmental initiatives, supporting coffee-growing communities and advocating waste reduction and recycling.

Despite encountering hurdles such as competitive pressures, shifting consumer preferences, and criticism over labor practices and environmental impact, Starbucks adeptly navigated these challenges, preserving its industry leadership.

Presently, Starbucks operates myriad outlets worldwide, spanning locales from Seattle to Tokyo, Mumbai, and Buenos Aires. The original Pike Place Market establishment stands as a testament to Starbucks’ humble origins and unwavering dedication to quality and community. Starbucks’ trajectory from a humble coffee bean purveyor to a global coffeehouse juggernaut epitomizes a saga of foresight, ingenuity, and resilience.

In summation, Starbucks’ inception in Seattle, Washington, in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker marked the genesis of a transformative journey. Initially a purveyor of premium coffee beans, Starbucks underwent a metamorphosis under Howard Schultz’s tutelage, introducing the Italian coffeehouse ethos to the American landscape. This evolution catapulted Starbucks to global acclaim, etching its legacy as a beloved coffee brand worldwide. Starbucks’ narrative is a testament to visionary leadership and the enduring allure of a meticulously brewed cup of coffee.

Note: This essay serves as a springboard for inspiration and further exploration. For personalized guidance and to ensure adherence to academic standards, consider consulting professionals at EduBirdie.

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How China Rose to Lead the World in Cars and Solar Panels

Heavy subsidies for industry, together with weak sales in China, have set the stage for an export boom, raising fears of factory job losses elsewhere.

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By Keith Bradsher

Reporting from Beijing

For decades, China has moved methodically to dominate ever more industries, from toys and clothing in the 1980s to semiconductors and renewable energy today. China now produces a third of the world’s manufactured goods — more than the United States, Germany, Japan, South Korea and Britain combined. Its trade surplus in these goods is equal to a tenth of the entire Chinese economy.

And those exports keep increasing, causing alarm about China’s manufacturing “overcapacity” among its biggest trading partners. Top leaders in the United States and Europe have begun calling on China to dial back how much it sells to the world, and to increase its imports. On Tuesday, President Biden raised U.S. tariffs sharply on imports from China of electric cars , solar panels and other high-tech manufactured goods.

China’s industrial policies had a consistent focus.

Almost a decade ago, China launched an ambitious program called Made in China 2025 . The plan was for China to replace key imports in 10 advanced manufacturing industries by making its own products. The state-controlled banking system directed loans to those key sectors.

Fast forward 10 years, and China’s domestic economy is hurting mostly because of a housing market crash. Leaders in Beijing have ordered increased lending for many of the same manufacturing sectors to compensate for slower consumer spending, and are stepping up exports.

For China’s economic policymakers, the strategy is familiar.

It works like this: Regulators restrict the investment options of Chinese households, which have little choice but to deposit enormous sums of money into banks at low interest rates. The banks then lend the money at low rates to start-ups and other businesses. According to China’s central bank, net lending for industry swelled to $670 billion last year from $83 billion in 2019.

Beijing instructs local governments to help the chosen industries. The assistance takes the form of cheap land for factories, new highways for freight trucks, bullet train lines and other infrastructure.

The Kiel Institute for the World Economy in Kiel, Germany, calculated in a study that more than 99 percent of Chinese companies whose stock traded publicly received direct government subsidies in 2022.

China keeps factory wages low, which helps the competitiveness of its manufacturers. Residence permits limit the ability of rural families to move permanently to cities, where they would qualify for better job benefits. Independent labor unions are barred, and would-be organizers are detained by the police.

Those programs have helped China grow in many industries, fanning fears in the United States and elsewhere that factory jobs could be lost. American tariffs are now targeting exports in some of China’s largest and fastest-growing industries.

Car exports rose fast.

The auto sector is a prime example of how China has been able to move so fast to gain manufacturing dominance.

Just four years ago, China was a weakling in car exports, shipping one million low-priced cars a year mainly to less affluent markets in the Mideast and elsewhere. China has since surpassed Japan and Germany by a wide margin to become the world’s largest car exporter. Shipments are running at an annual pace of nearly six million cars, sport utility vehicles, pickups and vans.

Three-quarters of these exports, particularly to Russia and to developing countries, are cars with gasoline engines, which fewer buyers in China want. Battery electric cars are cheaper to buy in China, and electricity to charge them is cheaper than gasoline.

China’s top leaders have heavily subsidized the research and production of battery electric cars for the past 15 years .

Companies are ramping up their manufacturing of battery electric cars and building a fleet of ships to export them to distant markets, particularly in Europe. Automakers are introducing 71 models of electric cars in China this year, many of them loaded with advanced features and selling for less than comparably equipped cars in the West.

China now leads in producing electric car batteries.

China started off far behind the West in electric car batteries — and Chinese officials knew it.

By 2011, Beijing had begun requiring Western companies to transfer key technologies to operations in China if they wanted consumers in China to receive the same subsidies for imported electric cars that were being offered for cars made in China. Without the subsidies, automakers like General Motors and Ford Motor could not compete with electric cars made in China.

Multinational automakers responded by pressuring their South Korean suppliers, which at the time led the electric car battery industry to build factories in China. Beijing went further in 2016 and declared that even electric cars made in China would qualify for consumer subsidies only if they used batteries from factories owned by Chinese companies . Even automakers like South Korea’s Hyundai abandoned the Chinese factories of South Korean battery manufacturers and switched their contracts to Chinese battery companies like CATL.

Chinese companies now produce the majority of the world’s electric car batteries. Technological breakthroughs over the last several years have meant the cars can achieve greater range.

According to a new report from the Atlantic Council, a research group in Washington, China’s exports of lithium-ion batteries leaped to $65 billion last year from $13 billion in 2019. Nearly two-thirds of these exports went to Europe and North America. Much of the rest went to East Asia, where the batteries are often assembled into products that end up being sold to Europe or North America.

China turned to solar to reduce reliance on oil imports.

China has long made solar panels a top priority to limit its dependence on imports of oil and other fossil fuels along sea lanes controlled by the United States or India, another geopolitical rival. A tenfold expansion of China’s solar panel manufacturing capacity from 2008 to 2012 caused the world price of solar panels to drop about 75 percent. Many American and European factories closed.

Three of China’s largest solar panel producers suffered financial collapses of their own as prices plunged, saddling banks with losses on loans. Smaller rivals in China were able to buy their factories for fractions of the original construction cost. This second generation of companies was then able to make panels more cheaply and invest in cutting-edge research.

Chinese companies make almost all of the world’s solar panels. The country’s exports of solar cells, which the Biden administration is raising tariffs on, have more than doubled in the past four years, to $44 billion last year. China is ramping up twice as fast its exports of solar wafers, a key component.

U.S. limits on chips promoted a China shift.

Export controls by the United States have limited the sale to China of the most advanced semiconductors, which make up about 5 percent of the market, and the technologies to manufacture them. But Chinese companies, benefiting from enormous government subsidies, have become more competitive in the other 95 percent of the market.

The chips made by China are used in a range of equipment in the West, including many cars. Even gasoline engines in cars are controlled by semiconductor often made in China.

Why is the West acting now?

The November election has put political pressure on President Biden to show that he is taking a tough stand toward China .

Trade issues have also become enmeshed with security concerns. Russia’s war in Ukraine is showing that wars may be decided in part by which side can make more drones, artillery shells and vehicles.

China contends that its rising trade surpluses are the legitimate result of the competitiveness of Chinese companies.

Jorge Toledo Albiñana, the European Union’s ambassador to China, disagreed. “In Europe,” he said in a speech last week, “there is increasing pressure to react to what is widely seen as a worsening lack of level playing for our companies and investors.”

Keith Bradsher is the Beijing bureau chief for The Times. He previously served as bureau chief in Shanghai, Hong Kong and Detroit and as a Washington correspondent. He has lived and reported in mainland China through the pandemic. More about Keith Bradsher

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• Published: 08 May 2024

The digital transformation in pharmacy: embracing online platforms and the cosmeceutical paradigm shift

• Ahmad Almeman   ORCID: orcid.org/0000-0002-6521-9463 1  

Journal of Health, Population and Nutrition volume  43 , Article number:  60 ( 2024 ) Cite this article

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In the face of rapid technological advancement, the pharmacy sector is undergoing a significant digital transformation. This review explores the transformative impact of digitalization in the global pharmacy sector. We illustrated how advancements in technologies like artificial intelligence, blockchain, and online platforms are reshaping pharmacy services and education. The paper provides a comprehensive overview of the growth of online pharmacy platforms and the pivotal role of telepharmacy and telehealth during the COVID-19 pandemic. Additionally, it discusses the burgeoning cosmeceutical market within online pharmacies, the regulatory challenges faced globally, and the private sector’s influence on healthcare technology. Conclusively, the paper highlights future trends and technological innovations, underscoring the dynamic evolution of the pharmacy landscape in response to digital transformation.

Introduction

Digital technology is driving a massive shift in the worldwide pharmacy industry with the goal of improving productivity, efficiency, and flexibility in healthcare delivery. In the pharmacy industry, implementing digital technologies like automation, computerization, and robotics is essential to cutting expenses and enhancing service delivery​​ [ 1 ]. With a predicted 14.42% annual growth rate, the digital pharmacy market is expanding significantly and is expected to reach a market volume of about $35.33 billion by 2026. This expansion reflects the pharmacy industry’s growing reliance on and promise for digital technologies​ [ 2 ].

Pharmacy services have always been focused on face-to-face communication and paper-based procedures. However, the drive for more effective, transparent, and patient-centered healthcare is clear evidence of the growing need for digital transformation. Breakthroughs like mobile communications, cloud computing, advanced analytics, and the Internet of Things (IoT) are reshaping the healthcare sector. These breakthroughs have the potential to greatly improve patient care and service delivery, as demonstrated in other industries including banking, retail, and media [ 3 ].

In the pharmacy industry, a number of significant factors are hastening this digital transition. Important concerns include the desire for cost-effectiveness, enhanced patient care, and more transparency and efficiency in medication development and manufacture. This change has been made even more rapid by the COVID-19 pandemic, which has highlighted the necessity for digital solutions to address the difficulties associated with providing healthcare in emergency situations [ 4 ].

In terms of specific technologies being adopted, artificial intelligence (AI) and machine learning are playing a pivotal role. The McKinsey Global Institute estimates that AI in the pharmaceutical industry could generate nearly $100 billion annually across the U.S. healthcare system. The use of AI and machine learning enhances decision-making, optimizes innovation, and improves the efficiency of research and clinical trials. This results in more effective patient care and a more streamlined drug development process​ [ 5 ].

The digital transformation in the pharmacy sector represents a pivotal shift in the delivery and experience of healthcare services. This evolution is more than a transient trend; it’s a fundamental alteration in the healthcare landscape [ 6 ]. The adoption of digital technologies is reshaping aspects of healthcare, including patient engagement and medication adherence, leading to enhanced healthcare outcomes. Research indicates that digital tools in pharmacy practices have resulted in more individualized and efficient patient care. Telehealth platforms, exemplified by companies like HealthTap, are being increasingly incorporated by pharmacies to augment patient care via technological solutions. The contribution of digital health technology to medication adherence is notable, employing a variety of tools such as SMS, mobile applications, and innovative devices like virtual pillboxes and intelligent pill bottles. These advancements are pivotal in addressing the critical issue of medication nonadherence in healthcare. Furthermore, digital health tools are empowering pharmacists with expanded clinical responsibilities, particularly in the management of chronic diseases like diabetes, where apps and smart devices provide essential features such as blood glucose tracking and medication reminders. This comprehensive integration of digital health into pharmacy practice signifies a transformative era in healthcare delivery and patient management [ 7 ].

Online platforms are being used increasingly by the pharmaceutical sector and educational institutions to improve efficiency, flexibility, and accessibility. The telepharmacy program at CVS Pharmacy is an example of how telepharmacy services, which provide remote counseling and prescription verification, bring pharmaceutical care to underprivileged communities [ 8 ]. Prescription accuracy and drug management are enhanced by e-prescribing software like Epic’s MyChart and digital health apps like Medisafe [ 9 ; 10 ]. Blockchain technology is also being investigated for transparent and safe supply chain management. Continuous learning and professional networking are made possible in education by Virtual Learning Environments (VLEs) like Moodle [ 11 ], simulation software like SimMan 3G Plus [ 12 ], Continuing Professional Development (CPD) platforms like the American Pharmacists Association [ 13 ], and online conference platforms, as shown in Fig.  1 . While these platforms offer significant benefits like enhanced access and cost-effectiveness, they also present challenges, including addressing the digital divide and ensuring the quality and credibility of online services to maintain professional standards and patient safety.

In this review, we summarized the digital transformation in the pharmacy sector, emphasizing the integration of online platforms and the emerging significance of cosmeceuticals. We discussed the global shift towards digital healthcare, including telehealth and online pharmacy services, and how these changes have been accelerated by the COVID-19 pandemic. The paper also examined the impact of digital technologies on pharmacy practice and education, with a focus on telepharmacy services, e-prescribing software, and digital health apps. Additionally, it addresses the challenges and opportunities presented by this transformation, including regulatory and safety concerns, and the need for continuous professional development in the digital era.

Comprehensive overview of different platforms in the pharmaceutical industry and education illustrating purposes and exemplary cases

The global impact of online pharmacy platforms

In recent years, the landscape of pharmacy practice and education has undergone a significant transformation, driven by technological advancements and catalyzed by the global COVID-19 pandemic. A study highlighting the increasing consumer trust in online medication purchases pre, during, and post-pandemic reveals a shift in consumer behavior towards online pharmacies [ 14 ]. This trend underscores a greater reliance on these platforms, where the perceived benefits significantly outweigh the perceived risks, indicating a positive reception and growing trust in digital healthcare solutions.

The adoption of telehealth, including telepharmacy, exemplifies this shift. In the United States, patient adoption of telehealth services surged from 11% in 2019 to 46%, with healthcare providers expanding their telehealth visits [ 15 ]. This shift is a reflection of how adaptable the healthcare sector is to digital platforms and how customer acceptance is increasing. The epidemic has also served as a catalyst, hastening the creation and uptake of online telepharmacy services throughout the world. The “new normal” has forced the addition of new platforms to support established sources of health information. The creation and evaluation of an online telepharmacy service in the Philippines during the pandemic serves as an example of this, demonstrating how quickly the global pharmacy industry adopted digital solutions. These services are essential for providing and elucidating pharmaceutical information within the context of primary healthcare delivery; they are not merely supplementary [ 16 ].

Simultaneously, pharmacist-led companies such as MedEssist and MedMehave, innovated digital platforms to facilitate services like flu shots or COVID-19 tests, reflecting a move towards customer-centric, digital-first services [ 17 ]. This transition enhances convenience and access to care but also introduces significant regulatory challenges. As the growth of online medicine sales disrupts traditional pharmacy markets, navigating these challenges becomes crucial for maintaining patient safety, quality standards, and fostering a trustworthy online healthcare environment [ 18 ].

Parallel to the practice changes, educational platforms for pharmacy have also evolved, especially under the impetus of the pandemic. These platforms have integrated a mix of traditional and student-centered teaching methodologies, including remote didactic lectures and on-site experiential training. The implementation of blended learning approaches, which combine remote lectures with on-site laboratory classes, reflects a broader educational trend towards hybrid models. This approach aims to leverage the advantages of both online and traditional methods, offering a more flexible and potentially more effective educational experience [ 19 ].

It takes more than just implementing new tools to integrate educational technology into pharmacy education, it also requires understanding how these technologies affect instruction and student learning. To effectively improve the educational experience, their utilization must have a purpose. There is an increasing amount of scholarly interest in this field, as evidenced by systematic reviews of the effects of new technologies on undergraduate pharmacy teaching and learning [ 20 ]. These digital platforms will probably become more significant in the future of pharmacy education, helping to mold the profession and guaranteeing that pharmacists are equipped to fulfill the ever-changing demands of the healthcare system. This development is indicative of a larger trend in the healthcare industry toward a more flexible, patient-focused, and technologically advanced environment [ 21 ].

Digital transformation in global healthcare

The recent advancements in digital transformation within global healthcare are significantly reshaping the landscape of healthcare and pharmacy services. These transformations are largely driven by the integration of digital technologies, which are redefining the tools and methods used in health, medicine, and biomedical science, ultimately aiming to create a healthier future for people worldwide [ 22 ]. In a 2018 report [ 23 ], Amazon’s potential entry into the $500 billion U.S. pharmacy market, the second-largest retail category, through mail-order and online pharmacies was highlighted as a significant industry disruptor. With licenses in at least 12 states in the US and a strategy focused on bypassing middlemen, Amazon’s historical success positions it to transform the pharmacy landscape, promising enhanced efficiency and cost savings for consumers.

One of the critical areas identified in recent research is the establishment of five priorities of e-health policy making: strategy, consensus-building, decision-making, implementation, and evaluation. These priorities emerged from stakeholders’ perceptions and are crucial for the effective integration and adoption of digital health technologies​ [ 24 ]. This holistic approach is increasingly relevant for scholars and practitioners, suggesting a focus on how multiple stakeholders implement digital technologies for management and business purposes in the healthcare sector [ 25 ]​​. The deployment of technological modalities, encompassed within five distinct clusters, can facilitate the development of a digital transformation model. This model ensures operational efficiency through several dimensions: enhanced operational efficacy by healthcare providers, the adoption of patient-centered methodologies, the integration of organizational factors and managerial implications, the refinement of workforce practices, and the consideration of socio-economic factors [ 25 ].

Studies focusing on value creation through digital means suggest healthcare as a consumer-centric realm ripe for center-edge transformations, characterized by self-service and feedback cycles. These transformations are vital in addressing inherent tensions between patients and physicians, steering the focus towards value co-creation and service-dominant logic [ 26 ]. Participatory design and decision-making approaches are emphasized for enhancing health information technology’s performance and institutional healthcare innovation. Such approaches are particularly crucial in developing national electronic medical record systems and improving chronic disease treatment through electronic health records. Additionally, telehealth research integrates patients’ perceptions, contributing to the understanding of technology, bureaucracy, and professionalism within healthcare [ 27 ].

The impact of health information technology (HIT) on operational efficiencies is profound. Empirical studies, such as those by Hong and Lee [ 28 ], Laurenza et al. [ 29 ], and Mazor et al. [ 30 ], demonstrate positive correlations between HIT and patient satisfaction, quality of care, and operational efficiency. However, challenges remain, as Rubbio et al. [ 31 ] highlight deficiencies in resilience-oriented practices for patient safety. Organizational and managerial factors in digital healthcare transformation also receive significant attention. Hikmet et al. [ 32 ] and Agarwal et al. [ 33 ] investigate the role of organizational variables and barriers in HIT adoption, whereas Cucciniello et al. [ 34 ] delve into the interdependence between implementing electronic medical records (EMR) systems and organizational conditions. Further, Eden et al. [ 35 ] and Huber and Gärtner [ 36 ] explore workforce adaptations and the implications of health information systems in hospitals that can increases transparency of work processes and accountability. Lastly, examining healthcare financialization and digital division provides an international perspective, contrasting the regulated environment in the EU with the US’s use of online medical crowdfunding as a potential solution to reduce bankruptcy [ 37 ; 38 ]. Collectively, these studies suggest a comprehensive model where stakeholders leverage digital transformation for management, enhancing operational efficiency in healthcare service providers.

Marques and Ferreira [ 39 ] performed a systematic literature review of digital transformation in healthcare, spanning the period from 1973 to 2018. Utilizing the SMARTER (Simple Multi-attribute Rating Technique Exploiting Ranks) method, 749 potential articles were analyzed, culminating in the prioritization and selection of 53 articles for detailed examination. The literature was organized into seven thematic areas: (1) Integrated management of IT in healthcare, (2) Medical images, (3) Electronic medical records, (4) IT and portable devices in healthcare, (5) Access to e-health, (6) Telemedicine, and (7) Privacy of medical data. It was observed that the predominant focus of research resides in the domains of integrated management, electronic medical records, and medical images. Concurrently, emerging trends were identified, notably the utilization of portable devices, the proliferation of virtual services, and the escalating concerns surrounding privacy. See Fig.  2 for visual representation of multifaceted digital transformation in healthcare.

Visual representation of multifaceted digital transformation in healthcare: a synthesis of provider-patient dynamics, HIT impact, and strategic management. HIT; health information technology, HC; healthcare, EMR; electronic medical records. IT; information technology, Pt.; patient

Telehealth and online pharmacy advancements in pandemic management

In the realm of online pharmacies and telehealth, digital health technologies have been instrumental in managing the COVID-19 pandemic through surveillance, contact tracing, diagnosis, treatment, and prevention. These technologies ensure that healthcare, including pharmacy services, is delivered more effectively, addressing the challenges of accessibility and timely care. The role of telemedicine and e-pharmacies, in particular, has been emphasized in improving access to care worldwide. By enabling remote consultations and drug delivery, these platforms are making healthcare more accessible, especially in regions where traditional healthcare infrastructure is limited or overstretched [ 40 ].

The Canadian Virtual Care Policy Framework advocates for the swift adoption and integration of virtual care, propelled by the COVID-19 pandemic. It emphasizes enhancing access and quality, ensuring equity and privacy, and devising appropriate remuneration models, employing a collaborative, patient-centered approach while addressing digital disparities. During the COVID-19 pandemic, Canadian provinces and territories rapidly adopted virtual health care, leading to 60% of visits being virtual by April 2020, up from 10 to 20% in 2019. However, these implementations were often temporary and not fully integrated into healthcare systems. By August 2020, virtual visits decreased to 40%, with variations across regions, while provinces and territories used temporary billing codes for these services. The framework’s “Diagnostique” provides a thorough analysis of policy enablers and strategies for virtual care, underscoring the need for comprehensive policy and partnership engagement [ 41 ]. In the context of digital transformation in pharmacy, the Hospital News article outlines the application and infrastructure of telepharmacy services in Canada, highlighting the geographical challenges and the early adoption of telepharmacy in certain regions since 2003. It notes the use of various technologies like Medication Order Management, Videoconferencing, and Remote Camera Verification. Although lacking specific quantitative data, the article underscores the necessity for expanded telepharmacy services to ensure uniform care quality across diverse locations [ 42 ].

Similarly, Telehealth offers extensive resources for patients and providers in the United States, emphasizing programs like the Affordable Connectivity Program and Lifeline to facilitate access. The Health Resources and Services Administration enhances telehealth through support services, research, and technical assistance, reflecting a significant outreach impact [ 43 ]. The Office for the Advancement of Telehealth (OAT) under Health Resources and Services Administration (HRSA) works to improve access to quality health care through integrated telehealth services in the US. It supports direct services, research, and technical assistance, with over 6,000 telehealth technical assistance requests sent to Telehealth Resource Centers and approximately 22,000 patients served [ 44 ].

Internationally, In the UK, the National Health Service (NHS) spearheads digital health and care, providing significant innovation opportunities through vast data management. Support for digital health spans various stages, from discovery with organizations like Biotechnology and Biological Sciences Research Council (BBSRC) and Intelligent Data Analysis (IDA) research group, to development with networks such as Catapults and CPRD, and delivery with entities like the Academic Health Science Networks (AHSNs) and DigitalHealth.London. Regulatory bodies like the Medicines and Healthcare products Regulatory Agency (MHRA) and NICE ensure safety and efficacy. The collaborative ecosystem involves academic, healthcare, and industry stakeholders, aiming to enhance health and care services through technology and innovation [ 45 ].

In Australia, the government’s investment of over $4 billion into COVID-19 telehealth measures has facilitated universal access to quality healthcare. This initiative has provided over 85 million telehealth services to more than 16 million patients, with approximately 89,000 healthcare providers engaging in this service delivery. From 1 January 2022, telehealth services, initially introduced in response to COVID-19, will become an ongoing part of Medicare. This will allow eligible patients across Australia continued access to general practice (GP), nursing, midwifery, and allied health services via telehealth, deemed clinically appropriate by the health professional [ 46 ].

European nations such as the Netherlands, Austria, and Italy are at the forefront of implementing cross-organizational patient records, significantly enhancing telehealth communication and facilitating cross-border healthcare. The role of strong government support in advancing telehealth is pivotal. Ursula von der Leyen, the President of the European Commission, has been a prominent advocate for eHealth. She proposed the establishment of a European Health Data Space to streamline health data exchange across member states. France, a leader in telehealth legislation for nearly a decade, has pioneered a public funding scheme for tele-expertise at a national scale. Despite these advancements, challenges like legislative barriers and the lack of consistent political direction continue to impede progress in the telehealth domain​ [ 47 ].

The Asia-Pacific region anticipates a surge in telehealth adoption driven by digital demand and pandemic-induced behavioral changes, while South East Asia exhibits widespread telehealth growth across healthcare aspects [ 48 ]. The telehealth adoption across the Asia-Pacific region has shown remarkable growth between 2019 and 2021 and is projected to continue rising by 2024. China’s adoption nearly doubled to 47% and is expected to reach 76%. Indonesia’s usage more than doubled to 51%, with a forecast of 72%. Malaysia and the Philippines both anticipate reaching a 70% adoption rate, increasing from 30% to 29%, respectively. India’s adoption is projected to more than double to 68%, while Singapore, which had a significant increase from 5 to 45%, is expected to achieve a 60% adoption rate. This trend indicates a robust uptake of telehealth services in the region [ 48 ].

Global telemedicine and E-pharmacy policy dynamics

In the context of telemedicine and e-pharmacy regulations within South East Asia, a notable distinction emerges with Singapore, Malaysia, and Indonesia being the only countries to have formalized legal frameworks governing both telemedicine practices and the dissemination of electronic information. In these countries, tele-consultation is restricted to patients already under the care of healthcare practitioners or as part of ongoing treatment, specifically in Singapore and Malaysia. Additionally, for scenarios requiring more intensive medical intervention, such as new referrals, emergency cases, or invasive procedures, both Malaysia and Indonesia mandate physical presence and face-to-face consultations, emphasizing a cautious and regulated approach to remote healthcare. In Malaysia, the regulations further stipulate that online prescriptions, excluding narcotics and psychotropic substances, are permissible solely under the continuation of care model, reflecting a judicious use of digital prescription services [ 49 ].

In Central and Eastern Europe (CEE), telemedicine has experienced substantial growth, primarily catalyzed by the COVID-19 pandemic, which necessitated rapid advancements in technology and alterations in healthcare practices. The region’s robust digital infrastructure, coupled with the innovative drive of local companies and the challenges posed by an aging demographic, has significantly contributed to this expansion. According to the European Commission’s Market Study on Telemedicine, the global telemedicine market was projected to grow annually by 14% by 2021, a rate that was likely surpassed due to the pandemic’s impact. More specifically, the Europe Telehealth Market, valued at US $6,185.4 million in 2019, is anticipated to witness an annual growth rate of 18.9% from 2020 to 2030. This trend underscores the increasing reliance on and potential of telemedicine in addressing healthcare needs in the CEE region [ 50 ].

In the Middle East, telehealth and telepharmacy, have seen varied degrees of adoption and progress. Despite attempts to reform healthcare delivery in the region, the progress of telemedicine has been somewhat slow, with certain expectations yet to be fully realized. However, there has been notable development in the use and adoption of these technologies [ 51 ]​. In a survey comparing the utilization of digital-health applications in Saudi Arabia and the United Arab Emirates (UAE), it was observed that a higher percentage of Saudi participants have utilized online pharmacy services (48%) compared to the UAE (36%). Conversely, awareness of teleconsultation services without prior use was higher in the UAE (43%) than in Saudi Arabia (35%). Retention data indicates that a significant proportion of users in both countries continue to engage with these services, with 80% of Saudi participants and 71% of UAE participants using teleconsultations at varying frequencies. Notably, a substantial majority of users in Saudi Arabia reported regular use of online pharmacies (90%), slightly higher than the UAE (78%), reflecting robust ongoing engagement with these digital health modalities. Notably, consumer adoption of telehealth products is primarily driven by time savings (48%) and convenience (47%), with 24-hour accessibility and efficacy both influencing 34% of users. Affordability and personal recommendations are also notable factors, while a wide range of options and quality are lesser but relevant considerations [ 52 ].

In response to the COVID-19 pandemic, a cross-sectional study was conducted among 391 licensed community pharmacists in the United Arab Emirates to assess the adoption and impact of telepharmacy services. The study revealed a predominant use of telepharmacy services, particularly via phone (95.6%) and messaging applications (80.0%). The findings highlighted that pharmacies with more pharmacists and those operating as part of a group or chain were more likely to implement a diverse range of telepharmacy services. The study identified significant barriers to telepharmacy adoption in individual pharmacies, including limited time, inadequate training, and financial constraints. There was a noticeable shift in service provision during the lockdown, with an increased reliance on telepharmacy, especially among pharmacies serving 50–100 patients per day. However, a reduction in services such as managing mild diseases and selling health products was observed during the lockdown period. The study concluded that telepharmacy played a pivotal role in supporting community pharmacies during the pandemic, with its expansion facilitated by the UAE’s advanced internet infrastructure, supportive health policies, and widespread digital connectivity [ 53 ]. Collectively, these insights reflect a global shift towards integrating and enhancing telehealth services as a response to emerging healthcare needs and technological advancements.

Unni et al. [ 54 ] provided an extensive review of telepharmacy initiatives adopted globally during the COVID-19 pandemic. Predominantly, virtual consultations were utilized to enable at-risk patients and others to remotely access pharmacists, thereby monitoring chronic illnesses, optimizing medication usage, and providing educational support [ 55 ]. Home delivery of medicines was widely implemented to decrease the necessity for in-person visits and mitigate exposure risks [ 56 ]. Additionally, patient education was prioritized to ensure effective management of health conditions from a distance [ 57 ]. Notably, a network of hospitals in China developed cloud-pharmacy care, allowing patients to consult pharmacists via text and the internet, while Spain utilized information and communication technologies for remote pharmaceutical care [ 58 ; 59 ]. Zero-contact pharmaceutical care, introduced in China, facilitated online medication consultations, eliminating direct contact [ 60 ]. The Kingdom of Saudi Arabia and other regions adapted new e-tools and teleprescriptions to enhance service accessibility [ 61 ]. The U.S. focused on credentialing pharmacists for telehealth to ensure competent service provision, and New Zealand implemented hotline numbers for phone consultations to further reduce physical visits [ 62 ; 63 ]. These initiatives reflect a significant shift towards innovative, technology-driven solutions in pharmaceutical care during a global health crisis. Refer to Fig.  3 for a graphical depiction of the worldwide distribution and applications of telepharmacy initiatives.

The global distribution of telepharmacy programs with an analysis of geographical distribution, technological applications, and associated benefits

Tracing the Private Sector’s Impact on Healthcare’s Technological Transformation

The role of the private sector in the fourth industrial revolution.

The World Economic Forum underscores the private sector’s leading role in digital inclusion and the acceleration of actions pertinent to the Fourth Industrial Revolution. This revolution affects economies, industries, and global issues profoundly, indicating the private sector’s critical role in driving technological advancements and digital platforms that deliver impactful healthcare solutions [ 64 ].

Mapping digital transformation in healthcare

A comprehensive analysis performed by Dal Mas et al. [ 65 ] meticulously maps the intricate terrain of digital transformation in healthcare, spotlighting the private sector’s instrumental role. Initially, the investigation encompassed an extensive array of diverse studies, leading to the identification of five main areas of digital technologies: smart health technologies, data-enabled and data collection technologies, Industry 4.0 tools and technologies, cognitive technologies, and drug & disease technologies. These domains frame the future research pathways, primarily steered by the private sector’s innovative drive. A significant proportion of the literature addresses healthcare broadly, suitable for both private and public sectors, yet a notable segment specifically focuses on the private sector’s endeavors, with a pronounced emphasis on the pharmaceutical domain [ 66 ; 67 ].

Public-private partnerships in healthcare delivery

The highlighted technologies, including digital platforms and telemedicine, exemplify the private sector’s trailblazing contributions to digital healthcare advancements. For instance, public-private partnerships (PPP) in India have emerged as a pivotal model for realizing universal healthcare (UHC), especially against the backdrop of acute healthcare shortages and urban-rural divides. Notably, mega PPP projects have successfully deployed technology-enabled remote healthcare (TeRHC), demonstrating its feasibility and impact in reaching isolated communities. These initiatives, overcoming various challenges, serve as a compelling example for global adoption, underscoring the transformative role of PPP in healthcare delivery [ 68 ].. Furthermore, a considerable majority of the literature in telemedicine underscores the necessity for profound research implications, yet a significant minority suggests policy implications [ 69 ; 70 ], reflecting a complex synergy between the private and public sectors in sculpting the digital healthcare framework [ 71 ]. This synthesis underscores the private sector’s critical influence in propelling the digital transformation in healthcare, charting a course that progressively fuses technological innovation with healthcare provision.

A study highlights Indonesia’s strategic initiatives to capitalize on telehealth business opportunities, driven by the Ministry of Research and Technology’s robust support for Technology-Based Start-up Company schemes [ 72 ]. With a demographic boon of 298 million from 2020 to 2024, escalating non-communicable diseases (71%), and a growing base of 222.4 million JKN participants, the stage is set for transformative growth. Despite a critical shortage of health workers (0.4 doctors per 1000 population), the enthusiasm for telemedicine is evident, with 71% satisfaction in hospital telemedicine and 32 million active telehealth users. The Ministry’s foresight in fostering technology start-ups, exemplified by the TEMENIN platform with its 11 health platforms, is steering Indonesia towards a future where high-quality healthcare is accessible and sustainable.

Lab@AOR: a model for PPPs in healthcare sector

The “Lab@AOR” initiative stands as a paradigmatic example of PPPs effectuating digital transformation within the healthcare sector. This strategic collaboration, between the University Hospital of Marche and Loccioni [ 73 ], a private entity, underscores the capacity of PPPs to navigate intricate challenges, stimulate international cooperation, and contribute to the development of sustainable, patient-centric healthcare solutions. Specifically, Lab@AOR was instituted to confront the nuanced challenges associated with the robotization of healthcare service delivery, highlighting the initiative’s role in fostering technological advancement through public and private sector synergy [ 74 ]. The project illustrates the evolution of Lab@AOR through three main phases: the pioneering stage, where groundwork for collaboration was laid; the nurturing stage, where collaborative exchanges were fostered; and the harvesting stage, wherein the potential of the PPP was fully unleashed. In the pioneering stage, Lab@AOR focused on a critical healthcare service component: the in-hospital preparation of medications for oncological patients. The University Hospital of Marche identified a need for innovation to improve service quality, efficiency, and safety, while Loccioni sought a real-life setting to test and refine its robotized system, APOTECAchemo [ 75 ]. This convergence of needs led to a symbiotic partnership aiming to enhance healthcare delivery through technological advancement.

During the nurturing stage, the partnership expanded the scope of APOTECAchemo to include non-oncological medications and developed additional tools like APOTECAps for manual preparation support. This phase was characterized by intensive collaboration, knowledge sharing, and continuous innovation, demonstrating the dynamic capability of the PPP to adapt and evolve in response to emerging healthcare challenges. The harvesting stage marked the international expansion of Lab@AOR, transforming it from a local initiative to an international community focused on leveraging digitalization and robotization to improve care quality and patient-centeredness. The PPP’s growth was catalyzed by its open perspective and inclusive approach, engaging entities from various cultural and institutional contexts, and fostering a network of 31 nodes across 19 countries and 3 continents.

Advancements in telehealth business models and frameworks

In their investigative study, Velayati et al. [ 76 ] delved into the articulation of emergent business models in telehealth and scrutinized the deployment of established frameworks across a variety of telehealth segments. The research spanned an extensive range of sectors, notably telemonitoring, telemedicine, mobile health, and telerehabilitation, alongside telehealth more broadly. The scope further extended to encompass niche areas such as assisted living technologies, sensor-based systems, and specific fields like mobile teledermoscopy, teleradiology, telecardiology, and teletreatment, presenting a thorough analysis of the telehealth landscape. Within the telemedicine and telehealth services sector, Barker et al. [ 77 ] introduced the Arizona Telemedicine Program (ATP) Model, a quintet-layer approach aimed at efficiently distributing telemedicine services throughout Arizona. Complementing this, Lee and Chang [ 78 ] proposed a four-component model specifically tailored for mobile health (mHealth) services pertaining to chronic kidney disease, focusing on offering a cost-effective platform for disease support and management. In the realm of telemonitoring, Dijkstra et al. [ 79 ] utilized the Freeband Business Blueprint Method (FBBM), which includes service, technological, organizational, and financial domains, to facilitate multiple telemonitoring services. Furthermore, the systemic and economic differences were explored in care coordination through Business to customer (B2C) and business (B2B) models for telemonitoring patients with chronic diseases, with the B2C model’s economic advantages were highlighted [ 80 ].

General telemedicine frameworks also received attention. Lin et al. [ 81 ] constructed a six-component framework analyzing major telemedicine projects in Taiwan, while Peters et al. [ 82 ] developed the CompBizMod Framework in Germany, encompassing value proposition, co-creation, communication and transfer, and value capture, designed to evaluate and enhance competitive advantages in telemedicine. In the specialized field of telecardiology, a comprehensive nine-component sustainable business model was crafted to facilitate mutual benefits for service providers and patients. This model emphasizes the importance of a holistic approach in ensuring the longevity and effectiveness of healthcare delivery within this domain [ 83 ]. Meanwhile, Mun et al. [ 84 ] presented a suite of five teleradiology business models aimed at providing effective, high-quality, and cost-efficient diagnoses.

The teletreatment sector saw innovative models from Kijl et al. [ 85 ], who designed a model for treating patients with chronic pain, focusing on the interrelation of components in the value network and the role of information technology. Complementarily, Fusco and Turchetti [ 86 ] introduced four models for telerehabilitation post-total knee replacement, emphasizing partnerships between care units and equipment suppliers to reduce costs and waiting lists. The mHealth and assisted living technology sector witnessed the introduction of a wearable biofeedback system model by Hidefjäll and Titkova [ 87 ], which employed Alexander Osterwalder’s Business Model Canvas and focused on a comprehensive commercialization process. Additionally, Oderanti and Li [ 88 ] presented a seven-component sustainable business model for assisted living technologies, aimed at encouraging older individuals to invest in eHealth services while reducing the pressure on health systems. These diverse clusters and models reflect the multifaceted nature of telehealth, each tailoring its approach to meet the unique demands of its domain. They collectively aim to optimize service delivery, stakeholder involvement, cost efficiency, and patient care quality, marking significant strides in the ongoing evolution of digital healthcare.

Challenges and biases in healthcare technology

One key aspect is the emergence of novel medical technologies and their potential biases. These biases are often a result of insufficient consideration of patient diversity in the development and testing phases. For example, disparities in the performance of medical devices like pulse oximeters among different racial groups have been observed, potentially due to a lack of diverse representation in clinical trials. This indicates a tendency for the development of healthcare technologies that may not adequately serve all patient populations [ 89 ]. A study on the profitability and risk-return comparison across health care industries highlights the use of return on equity (ROE) as a measure of profitability from a shareholder’s perspective. This measure combines profit margin, asset utilization, and financial leverage. The study analyzed financial data of publicly traded healthcare companies, providing insights into the financial dynamics of the healthcare sector. It revealed that while companies like Pfizer Inc. and UnitedHealth Group reported similar profitability, they had substantial differences in profit margin and asset utilization, indicating diverse financial strategies within the healthcare sector. This study underscores the complexity of financial performance in healthcare, where profitability measures need to be balanced with risk assessment and the broader impact on healthcare provision​ [ 90 ].

Additionally, an article discusses the benefits, pitfalls, and potential biases in healthcare AI. It emphasizes that as the healthcare industry adopts AI, machine learning, and other modeling techniques, it is seeing benefits for both patient outcomes and cost reduction. However, the industry must be mindful of managing the risks, including biases that may arise during the implementation of AI. Lessons from other industries can provide a framework for acknowledging and managing data, machine, and human biases in AI. This perspective is crucial in understanding how the integration of advanced technologies in healthcare can be influenced by the drive for profitability and efficiency, possibly at the expense of equitable and patient-centered care [ 91 ; 92 ].

Cosmeceuticals in the online pharmacy market

Cosmeceuticals, a term derived from the combination of cosmetics and pharmaceuticals, refer to a category of products that are formulated to provide both aesthetic improvements and therapeutic benefits. These products, typically applied topically, are designed to enhance the health and beauty of the skin, going beyond the mere cosmetic appearance. The exploration of cosmeceuticals in the online pharmacy market reveals a multifaceted and rapidly expanding industry. Bridging the gap between cosmetics and pharmaceuticals, they form a significant portion of the skincare industry. Cosmeceuticals are formulated from various ingredients, with their main categories being constantly discussed and analyzed in the scientific community [ 93 ]. They have taken a considerable share of the personal care industry globally, constituting a significant part of dermatologists’ prescriptions worldwide [ 94 ]. This surge is further fueled by increasing consumer demand for effective and safe products, including anti-aging skincare cosmeceuticals, a need which has been intensified by concerns over pollution, climate change, and the COVID-19 pandemic [ 95 ].

The global cosmeceuticals market is experiencing robust growth. Valued at USD 56.78 billion in 2022, it’s projected to expand to USD 95.75 billion by 2030, with a compound annual growth rate (CAGR) of 7.45%. This growth trajectory is propelled by the innovative integration of bioactive ingredients known for their medical benefits​ [ 96 ]. Another report confirms this upward trend, indicating the market was worth $45.56 billion in 2021 and is on a path of significant growth to USD 114 billion by 2030. The global disease burden is significantly impacted by various skin diseases, with dermatitis, psoriasis, and acne vulgaris among the most prevalent, contributing 0.38%, 0.19%, and 0.29% respectively. The pervasive nature of these conditions drives a substantial demand for effective treatments, propelling the integration of cosmeceuticals into the online pharmacy market. This integration not only offers convenient access to a range of therapeutic skincare products but also caters to the rising consumer inclination towards self-care and preventive healthcare. As a result, the online availability of cosmeceuticals is not just addressing the immediate needs of individuals suffering from skin conditions but is also reshaping the landscape of personal healthcare by making specialized treatments more accessible and customizable [ 97 ]. See Fig.  4 .

The left panel presents the market share distribution for key segments in the cosmeceuticals industry in 2021, including Skin Care Segment, and Supermarket & Specialty Stores, for Asia Pacific Revenue, with percentages for each category. The right panel displays the market value progression over time from 2021 to the projected value in 2030, with bold numbers indicating the value in billion USD for each year. The lower horizontal bar chart depicts the percentage contribution of various skin diseases to the global disease burden

Several factors are contributing to this expansion of the cosmeceuticals market. The market is driven by innovation in natural ingredients and a significant penetration of internet, smartphone, and social media applications, which attract potential consumer populations and reflect constantly changing consumer behavior [ 98 ]​​. The cosmeceuticals market’s robust CAGR and revenue share, especially in regions like Asia Pacific, further signify its burgeoning presence and potential within the global market [ 99 ]​. Integration into online pharmacies is a key aspect of this market’s evolution, offering easier access to these products for a wider customer base. As the market continues to grow, it’s anticipated that the blend of cosmeceuticals with online pharmaceutical platforms will become increasingly seamless, offering consumers a diverse range of accessible, effective, and beneficial skincare and health products. This integration is likely to be driven by the growing trend of e-commerce and digitalization in healthcare and personal care sectors.

The landscape of online pharmacies, particularly concerning cosmeceuticals, is evolving. While the overall penetration for non-specialty drugs in mail-order and online pharmacies is low, they represent a significant portion of specialty prescription revenues at 37%. Despite this, only 13% of consumers consider these as their primary pharmacy choice, indicating a growing but still emerging market​​​​. Strategies are in place to enhance the market appeal of these pharmacies, focusing on speed, convenience, and personalized experiences, such as video telehealth visits, to attract a broader consumer base [ 100 ].

The dissertation “L’Oréal Portugal: A Digital Challenge for the Active Cosmetics Division” authored by Ascenso [ 101 ] provides an in-depth examination of the impact of digital evolution on the Portuguese cosmeceutical sector and its implications for L’Oréal, a significant cosmetics company. It posits that while L’Oréal has foundational digital competencies, the rapidly evolving digital landscape presents a broad spectrum of potential risks and opportunities. The study details the operations of L’Oréal’s Active Cosmetics Division, which manages brands predominantly sold in pharmacies and parapharmacies, and explores the potential repercussions of digitalization on L’Oréal Portugal’s strategic and operational frameworks. Furthermore, the thesis highlights the expanding role of e-pharmacies and the need for legal reforms to facilitate their operation. It discusses the prevalent trends in the cosmetic industry, such as the increasing demand for natural, male-focused, and environmentally friendly products. The dissertation scrutinizes L’Oréal’s strategic pillars, including innovation, acquisition, and regional growth, emphasizing the need for the company to integrate advanced technologies and recalibrate its business methodologies in light of digital progression [ 101 ]. Although L’Oréal has initiated some digital strategies targeting consumers and pharmacies, there’s a recognized need for an intensified focus on digital marketing aimed at clients. An exploratory attempt by L’Oréal to implement an online ordering platform for pharmacies did not meet success, indicating possible industry unreadiness for such advancements. This case study serves as a critical examination of how traditional companies in the pharmaceutical and cosmetics sectors must adapt to the digital age’s challenges and opportunities [ 101 ].

In a collaborative endeavor with L’Oréal, an associated digital agency provided a comprehensive suite of services that encompasses the full management of social media pages, the development of e-commerce websites, the establishment of Customer Relationship Management (CRM) platforms tailored for pharmacies, and the execution of digital campaigns leveraging QR codes, SMS marketing, and newsletters. These digital tools confer a competitive edge, facilitating a deeper comprehension of consumer behavior and the potential to augment value extraction from customer interactions. For the laboratories, particularly those associated with cosmetics, the advantages are twofold: an increase in sell-out figures, thereby enhancing direct sales to end consumers, and a boost in sell-in metrics, reflecting a rise in transactions to pharmacies or wholesalers. The online ordering feature, as noted by João Roma, a manager at La Roche-Posay, could result in a cacophony of processes if laboratories were to individually develop distinct methods. He advocates for the utilization of pre-existing platforms, such as the established e-learning infrastructure, to spearhead ventures into the online marketplace [ 101 ].

A survey conducted specifically for L’Oréal’s e-learning platform, cosmeticaactiva.pt [ 102 ], across the Portuguese landscape garnered responses from 324 participants, comprising 71% general pharmacists, 13% technical assistants, 8% directors, 7% individuals responsible for procurement from laboratories, and 2% beauty/cosmetic advisors. The findings from this survey underscore the pervasive adoption of digital tools within the pharmacy sector: 82% of respondents affirmed the presence of their pharmacies on social media platforms, 80% reported the use of basic management software, 64% indicated the deployment of advanced management systems, 61% were conversant with online ordering systems directed at laboratories, 38% utilized a store locator, 28% had an established website presence, and a smaller segment of 12% offered online shopping facilities.

Another survey conducted within this study to evaluate the significance of dermocosmetic products in pharmacies yielded a mean importance rating of 4.38 out of 5, indicating that a majority of pharmacists consider these products to be highly important to their business operations. Factors critical to the differentiation of a proficient laboratory/supplier were innovation and cost-effectiveness, with mean scores of 1.9 and 2.7 respectively, on a scale from 1 (most important) to 5 (least important). A substantial majority of pharmacists, amounting to 81.8%, perceive their pharmacies as beacons of innovation and modernity. Detailed interviews elucidated that digital tools are indispensable in augmenting sales for cosmeceutical products by catalyzing demand—a dynamic not feasible with medicinal products. These tools are paramount in managing customer loyalty, facilitating enhanced communication with existing clients via online and mobile channels. Despite the challenges posed by digitalization, particularly in the realms of logistics and human resources, the management at L’Oréal is well-equipped to swiftly adapt to the evolving business landscape, as evidenced by the proactive adoption and integration of these digital strategies [ 101 ] as illustrated in Fig.  5 .

Results from Ascenso [ 101 ] survey assessing digital challenges for L’Oréal in the Portuguese cosmeceutical sector. Digital Tools Usage in Pharmacies (upper left) : the bar chart showing the percentage of respondents using various digital tools in pharmacies. Suppliers’ Choosing Factors (upper right) : the bar chart displaying the mean scores of factors that distinguish a good laboratory/supplier. General Pharmacists Opinion (lower left) : A line chart illustrating the mean ratings of pharmacists’ opinions on whether the pharmaceutical sector is modern, changing, conducive to innovations, adapted to consumer needs, and more developed than other sectors. Importance of Digital Development Tools for Pharmacies (lower right) : A vertical bar chart demonstrating the mean scores for the importance of different digital development tools for pharmacies

The digital transformation strategies, exemplified by companies like L’Oréal, extend beyond the mere targeting of end consumers, encompassing the perspectives of various stakeholders, including retailers. This broadened focus reflects a holistic and integrated approach to digital marketing and customer engagement, indicative of a larger trend within the market. The significance of digital channels in facilitating comprehensive customer interaction and brand development is increasingly recognized. The distinction of organizations such as L’Oréal in their digital initiatives highlights the competitive advantage that can be garnered through innovative digital strategies.

The receptiveness of industry professionals, such as pharmacists, to emerging digital trends, along with the readiness of companies to engage in non-face-to-face sales models, marks a paradigm shift in traditional sales and distribution methods. This shift is reflective of a broader market trend where digital platforms are becoming integral to the customer journey. Furthermore, the potential for online sales in specialized sectors, such as dermocosmetics, and the benefits that organizations derive from the technological advancement of their client base, underscore an escalating acknowledgment of e-commerce and digital tools as crucial elements of a business strategy. This trend, with L’Oréal as a prime example, emphasizes the broader market movement towards digital transformation, not merely as an option but as a necessity for maintaining relevance and competitiveness in an ever-evolving market landscape.

The global regulatory landscape for cosmeceuticals

Sophisticated regulatory legislation and enforcement mechanisms characterize many developed countries such as the USA, EU Member States, Canada, and Japan. These nations, along with influential organizations like the World Health Organization (WHO), significantly shape international market rules and regulations due to their market size and regulatory capacity [ 103 ]. The WHO is particularly noted for its crucial role in setting global standards, with a focus on developing and promoting international standards related to food, biological, pharmaceutical, and similar products [ 104 ]. In contrast to pharmaceuticals, the cosmetic industry necessitates a more advanced international regulatory framework due to consumers’ extensive exposure to these products. The distinction between cosmetics and pharmaceuticals varies significantly across different countries, with the USA employing a voluntary registration system for cosmetics and the EU and Japan requiring mandatory product filings prior to marketing [ 105 ]. Concerns over the safety of pharmaceutical and cosmetic products are highlighted, with an increasing consumer focus on “natural, ecological, and clean” products [ 106 ]. However, the lack of a regulatory framework for these categories underscores the need for more advanced regulations to mitigate health risks.

Intergovernmental cooperation is emphasized, with the US and EU portrayed as dominant players in the pharmaceutical and cosmetic industries, respectively. Regulatory capacity, which is essential for defining, implementing, and monitoring market rules, varies among countries and markets. This capacity depends on several factors, including staff expertise, statutory sanctioning authority, and the degree of centralization of regulatory authority [ 103 ]. The regulatory systems of the EU and US are explored, focusing on their unique approaches to medicine authorization and regulation. The European Medicines Agency (EMA) in the EU and the Food and Drug Administration (FDA) in the US serve as pivotal regulatory bodies [ 107 ; 108 ]. The EMA’s centralized procedure and the FDA’s premarket approval process are detailed, along with subsequent postmarket regulatory procedures. For instance, EU and US cosmetic regulations are compared, revealing differences in their approaches and the evolution of the EU’s regulatory landscape through various amendments and directives. In particular, directive 76/768/EC has been superseded by Regulation (EC) N° 1223/2009, serving as the principal regulatory framework for finished cosmetic products in the EU market. This regulation enhances product safety, optimizes the sector’s framework, and eases procedures to promote the internal cosmetic market. Incorporating recent technological advancements, including nanomaterials, it maintains an internationally acknowledged regime focused on product safety without altering existing animal testing prohibitions [ 109 ].

The Eurasian Economic Union’s (EAEU) regulatory framework for medicines and medical devices is detailed, including the legal framework established for regulating the circulation of these products. The conformity assessment methods, such as the EAC Declaration and the State Registration process, are required for manufacturers to demonstrate their products’ compliance with the standards [ 110 ]. Armenia is also part of the EAEU’s legal framework, which aims to unify regulations for the production and registration of pharmaceuticals and medical products by 2025. This unification is expected to reduce administrative costs for manufacturers and improve medicinal products for patients. Despite significant developments in the cosmetics industry, Armenia does not have an extensive regulatory framework for it. Prior to joining the EAEU, the only regulation concerning cosmetic products was the Order of the Minister of Health of the Republic of Armenia on “Hygiene Requirements of the Production and Safety of Perfume-Cosmetic Products.” Since joining the EAEU, Armenia has unified its national legislation with EAEU regulations, but there are challenges and gaps in the direct applicability of the EAEU’s technical regulations in the country [ 111 ].

In the context of the necessity for clear regulatory framework stems from two reasons. Firstly, cosmeceuticals - products straddling cosmetics and drugs - demand intensified regulatory attention. Examples include the 2007 FDA seizure of Jan Marini’s Age Intervention Eyelash, which contained the drug ingredient bimatoprost, and products boasting human stem cell cultured media, which claim rejuvenating effects but may pose safety risks due to minimal oversight [ 112 ]. A noted 1450% increase in FDA warnings (from 4 to 62 letters) between 2007 and 2011 and 2012–2017, with 8 targeting stem cell ingredient promotions, underscores the growing concern [ 113 ]. The FDA’s limited capacity to identify and assess potential drug-adulterated cosmetics raises concerns.

The second aspect focuses on the necessity for a more comprehensive and unbiased scientific and medical perspective in the FDA’s ingredient review process. The Personal Care Products Safety Act proposes a balanced committee formation including industry, consumer, and medical representatives, yet advocates for the inclusion of specialized professionals like chemists, dermatologists, toxicologists, and endocrinologists. Specific ingredients like diazolidinyl urea and quarternium-15, although effective antimicrobials, are flagged for potential skin allergy risks and formaldehyde release. The preservative 4-methylisothiazolinone, banned in Europe for rinse-off products, is noted for increasing allergic contact dermatitis cases in the US [ 114 ]. The lag in US cosmetic regulation compared to the EU is acknowledged, with the Personal Care Products Safety Act considered a significant advancement, albeit in need of further refinement [ 115 ].

The importance of consumer safety in the global regulatory landscape for cosmeceuticals, particularly for products that blur the line between cosmetics and pharmaceuticals, is a critical issue due to several key factors. Firstly, the cosmeceutical market is expanding rapidly, driven by new ingredients promising various skincare benefits like anti-aging and photoprotection. This growth necessitates clear regulatory guidelines to ensure that these products are safe and their claims are clinically proven. The FDA, for instance, differentiates between cosmetics and cosmeceuticals based on their intended use, particularly if a product is marketed as a cosmetic but functions in a way that affects the structure of the human body, classifying it as a cosmeceutical [ 116 ].

Secondly, the legal and regulatory distinctions between drugs and cosmetics are significant. Drugs are subject to FDA approval based on their intended use in treating diseases or affecting the body’s structure or function, whereas cosmetics are not. This difference becomes crucial when products are marketed with drug-like claims but are not regulated as drugs, potentially leading to consumer safety issues. For example, botanical cosmeceuticals, which contain natural ingredients like herbal extracts, need thorough evaluation to ensure consistency in therapeutic effects [ 117 ]. Additionally, cosmeceutical manufacturers must be careful with marketing and advertising claims to avoid legal implications. Misleading claims can lead to lawsuits and regulatory actions, as seen in past cases where companies faced consequences for unfounded product claims. Moreover, the FDA advises cosmeceutical manufacturers to follow Good Manufacturing Practices (GMP) to reduce the risk of misbranding or mislabeling. These guidelines include production practices and specific warning statement guidelines, emphasizing the importance of substantiating the safety of these products [ 118 ].

The global regulatory landscape for online pharmacy

Online pharmacies pose various risks to consumers, including the potential health hazards from counterfeit or substandard medications and the inappropriate use of prescription drugs. The regulatory landscape for these pharmacies varies significantly across nations, with some countries like the United States implementing specific laws, while others, such as France, have instituted outright bans [ 119 ]. The European Union, for instance, has implemented a mandate effective from 1 July 2015, which requires member states to adhere to legal provisions for a common logo specific to online pharmacies. This is coupled with an obligation for national regulatory authorities to maintain a registry of all registered online medicine retailers, as detailed by the European Medicines Agency [ 120 ]. Furthermore, the sale of certain medications online within the EU is permissible, contingent upon the registration of the pharmacy or retailer with respective national authorities​ [ 121 ]. Additionally, the Council of Europe’s MEDICRIME Convention introduces an international treaty that criminalizes the online sale of counterfeit medicinal products, enforcing prosecution irrespective of the country in which the crime is perpetrated [ 122 ].

Switzerland presents a unique stance, where Swissmedic strongly advises against the online purchase of medicines due to the high risk of illegal sourcing and poor quality. However, Swiss mail-order pharmacies with a valid cantonal license to operate a mail-order business are exempted from this advisory​ [ 123 ]. The Swiss Mail-Order Pharmacists Association and its affiliates, such as Zur Rose AG and MediService AG, actively advocate for a modern and equitable regulation of mail-order medicine sales​ [ 124 ]. The legislative framework is further bolstered by the Federal Act on Medicinal Products and Medical Devices, which regulates therapeutic products to guarantee their quality, safety, and efficacy​ [ 125 ]. In the Middle East, community pharmacy practice is predominantly governed by national Ministries of Public Health or equivalent governmental entities, with most community pharmacies being privately owned​ [ 126 ]. The region’s involvement in the Global Cooperation Group, which encompasses various international regulatory bodies like the EMA and USFDA, signifies a collaborative approach towards drug regulatory affairs in the MENA region [ 127 ]. Despite these advances in regulatory collaboration, it is notable that currently no specific regulations have been detected for online purchases from online pharmacies in the Middle East, highlighting a significant area for potential regulatory development. Furthermore, a notable transition is observed in pharmacy education across several Middle Eastern nations, with an inclination towards introducing Pharm.D degrees to replace traditional pharmacy degrees, reflective of evolving educational standards in the pharmaceutical field [ 128 ]. This shift in education parallels the need for updated regulatory frameworks, especially in the context of the burgeoning online pharmacy sector.

Furthermore, Australia permits the sale of both Prescription-Only Medicines (POMs) and Over-the-Counter (OTC) medications online, provided that brick-and-mortar pharmacies comply with all relevant laws and practice standards [ 129 ]. In contrast, South Korea maintains a stringent stance, prohibiting the online sale of both POMs and OTC medicines, with sales confined exclusively to physical stores registered with the Regulatory Authority (RA) [ 130 ]. China, Japan, Russia, Singapore, and Malaysia exhibit a more selective regulatory framework. China and Russia allow the online sale of OTC medicines only, with China imposing additional restrictions on third-party e-commerce platforms and Russia having introduced a draft law in December 2017 to formalize this practice [ 131 ; 132 ]. Japan permits the online sale of certain OTC medicines, explicitly excluding specific substances such as fexofenadine and loratadine [ 133 ]. Similarly, Singapore and Malaysia endorse the online sale of specific OTC medicines only, adopting a “buyers beware” approach to caution consumers about the associated risks [ 134 ; 135 ]. Lastly, the legal landscapes in India and Indonesia remain ambiguous. India’s RA has effectively banned the online sale of medicinal products, yet this prohibition lacks legislative backing. Indonesia, too, grapples with unclear regulations, leaving the legal status of online pharmacies indeterminate [ 136 ].

In response to these risks, several initiatives have been developed to guide and certify online pharmacies. In the United States, LegitScript offers certification to online pharmacies that comply with criteria such as appropriate licensing and registration [ 137 ]. Similarly, the Verified Internet Pharmacy Practice Sites (VIPPS) program, accredited by the National Association of Boards of Pharmacy, ensures pharmacies adhere to licensing requirements in the states where they dispense medications [ 138 ]. Internationally, the Health On the Net Foundation has introduced the HONcode, an ethical standard for health websites globally. This code certifies sites that provide transparent and qualified information. However, due to the absence of international harmonization, the HONcode’s certification is limited to US and Canadian pharmacies verified by VIPPS [ 139 ]. The lack of a harmonized international approach presents significant challenges. Consumers do not have access to a comprehensive, global repository of all certified pharmacies. The diverse certification schemes are not well articulated or interconnected, leading to consumer unawareness about their significance or existence. Moreover, enforcing standards across different legal jurisdictions is complex without a unified agreement. To enhance consumer protection, it is imperative to develop and promote a standardized, minimal international code of conduct for online pharmacies. Such a code would unify requirements and allow all initiatives to clarify their roles under a common framework. Adequate oversight in the borderless online pharmacy market can only be achieved through collaborative efforts. To visualize the infographic of the global regularity landscape for the online pharmacy see Fig.  6 .

Comprehensive representation of the regulatory landscape for global online pharmacies, detailing international and national initiatives, certification programs, and conventions aimed at minimizing risks associated with the purchase of medications via online platforms

Technological innovations and Future trends in global pharmacy

The global pharmacy sector is undergoing a transformative shift, driven by the rapid advancement of technological innovations. As the world becomes increasingly digital, the integration of cutting-edge technologies like Artificial Intelligence (AI) and blockchain is setting the stage for a new era in pharmaceutical care and management. These advancements promise to revolutionize the industry by enhancing efficiency, accuracy, and security, ultimately leading to improved patient outcomes and a more streamlined healthcare experience [ 140 ].

Walgreens, in partnership with Medline, a telehealth firm, has developed a platform for patient interaction with healthcare professionals via video chat. AI’s role extends to inventory management in retail pharmacies, allowing pharmacists to predict patient needs, stock appropriately, and use personalized software for patient reminders. Although not all inventory management software in retail pharmacies utilizes AI, some, like Blue Yonder’s software developed for Otto group, demonstrate the potential of AI in predicting product sales with high accuracy, thus enhancing supply chain efficiency [ 141 ; 142 ]. At the University of California San Francisco (UCSF) Medical Center, robotic technology is employed to improve patient safety in medication preparation and tracking. This technology has prepared medication doses with a notable error-free record and surpasses human capabilities in accuracy and efficiency. It prepares both oral and injectable medicines, including chemotherapy drugs, freeing pharmacists and nurses to focus on direct patient care. The automated system at UCSF receives electronic medication orders, with robotics handling the picking, packaging, and dispensing of individual doses. This system also assembles medications on bar-coded rings for 12-hour patient intervals and prepares sterile preparations for chemotherapy and intravascular syringes [ 143 ].

In the realm of global pharmacy, blockchain technology emerges as a pivotal force, driving advancements across various facets of healthcare and pharmaceuticals. At the forefront of its application is the enhancement of supply chain transparency [ 144 ]. Blockchain’s immutable ledger ensures the provenance and legitimacy of medical commodities, offering an unprecedented level of visibility from manufacturing to distribution. This is particularly vital in areas plagued by counterfeit drugs, where systems like MediLedger are instrumental in verifying the legality and essential details of medicines [ 145 ].

The utility of blockchain extends to the implementation of smart contracts — scripts processed on the blockchain that bolster transparency in medical studies and secure patient data management [ 146 ]. These contracts find extensive use in advanced medical settings, as evidenced by a blockchain-based telemonitoring system for remote patients and Dermonet, an online platform for dermatological consultation [ 147 ].

Furthermore, blockchain is revolutionizing patient care through patient-centric Electronic Health Records (EHRs). By decentralizing EHR maintenance, blockchain empowers patients with secure access to their historical and current health records [ 148 ]. Prototypes like MedRec and systems such as MeD Share exemplify how blockchain can provide complete, permanent access to clinical documents and facilitate the sharing of medical data between untrusted parties, respectively, ensuring high information authenticity and minimal privacy risks [ 149 ; 150 ]. In verifying medical staff credentials, blockchain again proves invaluable. Systems like ProCredEx, based on the R3 Corda blockchain protocol, streamline the credentialing process, offering rapid verification while allowing healthcare entities to leverage their existing data for enhanced transparency and assurance about medical staff experience [ 151 ].

The integration of blockchain with Internet of Things devices for remote monitoring marks another leap forward, significantly bolstering data security. By safeguarding the integrity and privacy of patient data collected by these devices, blockchain mitigates the risk of tampering and ensures that only authorized parties can access sensitive information [ 152 ]. Besides, a blockchain-based drug supply chain initiative, PharmaChain, utilizes AI for approaches against drug counterfeit and ensures the drug supply chain is more traceable, visible, and secure. For online pharmacies, this means a more reliable supply chain and assurance of drug authenticity, crucial for maintaining trust and safety [ 153 ].

In response to the COVID-19 pandemic, the PharmaGo platform has emerged as an innovative solution in Sri Lanka, revolutionizing the delivery of pharmacy services. As traditional pharmacies grapple with the challenges of meeting all customer needs in one location, PharmaGo addresses this by providing a comprehensive online pharmaceutical service. It allows customers to access a wide range of medications through a single platform, reducing the need to visit multiple pharmacies. Utilizing image processing technology, pharmacy owners can accurately identify prescribed medicines, while the system’s predictive analytics forecasts future drug demands, enhancing stock management. Additionally, PharmaGo’s AI-powered medical chatbot offers real-time guidance, ensuring a seamless and efficient customer experience. This platform represents a significant advancement in healthcare accessibility and pharmacy service delivery in the pandemic era [ 154 ]. In the same context, ontology-based medicine information system, enhancing search relevance through a chatbot interface was presented by Amalia et al. [ 155 ]. Addressing conventional search engines’ limitations in interpreting data relationships, it employs semantic technology to represent metadata informatively. The ontology as a knowledge base effectively delineates disease-medicine relationships, with evaluations indicating a 90% response validity from the chatbot, offering a robust reference for medical information retrieval and its semantic associations.

Future trends for the digital transformation of in the pharmaceutical sector

Future trends for the digital transformation of pharmacies globally are heavily influenced by the transformative impact of digital technologies on healthcare delivery. The integration of telemedicine, electronic health records, and mobile health applications is pivotal in enhancing patient care. These technologies are instrumental in improving data sharing and collaboration among healthcare professionals, increasing the efficiency of healthcare services. Additionally, they offer significant potential for personalized medicine through data analytics and play a crucial role in patient engagement and self-management of health. The importance of these technologies in creating a more connected and efficient healthcare system is underscored, marking a significant shift in the global healthcare landscape [ 156 ].

In the pharmaceutical sector, the COVID-19 pandemic has catalyzed a significant shift towards Pharmaceutical Digital Marketing (PDM), particularly for over-the-counter drugs. This shift focuses on utilizing online pharmacies and digital platforms for targeted advertising, directly reaching consumers. The trend towards purchasing OTC drugs online has grown, driven by the convenience and efficiency of digital channels. While PDM faces challenges like regulatory constraints and the need for digital proficiency, it offers substantial opportunities in enhancing customer engagement and precise marketing. The future of PDM is poised to be more consumer-centric, integrating advanced technologies like AI, and emphasizing personalized marketing strategies to strengthen brand engagement and customer interaction [ 157 ].

Artificial intelligence holds immense potential to revolutionize the field of pharmacy, offering numerous benefits that can significantly enhance efficiency and patient care. One of the primary applications of AI in this sector is the automation of routine tasks. By utilizing AI, pharmacies can automate critical processes such as prescription processing, checking for drug interactions, and managing inventory. This automation not only streamlines operations but also minimizes the likelihood of human error, thereby increasing the overall efficiency of pharmacies [ 158 ].

Furthermore, AI can play a pivotal role in personalized medication management. This is particularly beneficial for patients with chronic conditions such as diabetes who require careful management of their insulin dosages, as fluctuations in blood sugar levels can lead to serious complications. AI systems can monitor patients continuously, provide timely reminders for medication intake, and dynamically adjust treatment plans based on individual health data. Such personalized management ensures that patients receive optimal care tailored to their specific needs, potentially improving treatment outcomes. Incorporation of AI into electronic health records presents another significant advancement. By integrating AI with EHRs, healthcare providers can access real-time patient data. This integration empowers healthcare professionals to make more informed care decisions, enhancing the quality of patient care. Moreover, it significantly reduces the likelihood of medication errors, a critical concern in healthcare.

Likewise, AI’s capability to analyze extensive patient data is invaluable. It can identify patterns and trends in medication adherence, detect potential drug interactions, and pinpoint adverse drug reactions. These insights are crucial for healthcare professionals and researchers. By understanding these patterns, they can develop more effective medication adherence strategies and support systems, contributing to better patient outcomes and advancing the overall field of pharmaceutical care.

In the expansive realm of chemical space, the pharmaceutical industry faces the continual challenge of identifying new active pharmaceutical ingredients (APIs) for diverse diseases [ 159 ]. High throughput screening (HTS), despite its advancements in recent decades, remains resource-intensive and often yields unsuitable hits for drug development. The failure rate of investigational compounds remains high, with a study citing only a 6.2% success rate for orphan drugs progressing from phase I to market approval [ 160 , 161 ].

Machine learning presents a transformative approach to this challenge. It offers an alternative to manual HTS through in silico methodologies. ML-driven drug discovery boasts several advantages: it operates continuously, surpasses the capacity of manual methods, reduces costs by decreasing the number of physical compounds tested, and early identifies negative characteristics of compounds, such as off-target effects and sex-dependent variability [ 162 ].

A substantial advancement in the realm of machine learning has emerged from major pharmaceutical entities, notably AstraZeneca, in conjunction with research institutions. This progress is evidenced by the development of an innovative algorithm that demonstrates both time efficiency and effectiveness in the sphere of drug discovery. The recent introduction of this algorithm significantly enhances the process of determining binding affinities between investigational compounds and therapeutic targets. It surpasses traditional in silico methods in terms of performance. The application of this algorithm underscores the remarkable potential of machine learning in accelerating the identification and development of novel therapeutic agents [ 163 ].

Moreover, the proficiency of machine learning in managing vast and intricate datasets has rendered it indispensable in research focused on cancer targets, utilizing diverse and extensive datasets. This approach is fundamental in numerous drug discovery initiatives, especially those targeting various forms of cancer. A wide array of ML techniques, ranging from supervised to unsupervised learning, are employed to discern chemical attributes that are indicative of potential therapeutic efficacy against a spectrum of cancer targets. This methodology is crucial in identifying novel compounds that could be effective in cancer treatment, leveraging the rich and complex data available in oncological research [ 164 ].

The digital transformation in the pharmacy sector is significantly reshaping healthcare delivery, driven by the integration of cutting-edge technologies like Artificial Intelligence and blockchain. This transformation is marked by a substantial growth in the digital pharmacy market, with a projected annual growth rate of 14.42%, leading to a market volume of approximately $35.33 billion by 2026​​.

One major aspect of this transformation is the growing reliance on online pharmacy platforms, largely influenced by the COVID-19 pandemic. Consumer trust in online medication purchases has significantly increased, indicating a shift towards digital healthcare solutions. The adoption of telehealth services, including telepharmacy, has surged, with patient adoption in the United States increasing from 11% in 2019 to 46%. This shift towards digital-first services enhances convenience and access to care but also introduces regulatory challenges, particularly in maintaining patient safety and quality standards in the rapidly evolving online healthcare environment​​.

The cosmeceuticals market, a segment within online pharmacies, is experiencing robust growth. Cosmeceuticals, which bridge the gap between cosmetics and pharmaceuticals, have become a significant part of the skincare industry. The market, valued at USD 56.78 billion in 2022, is projected to expand to USD 95.75 billion by 2030. This expansion is driven by factors like innovation in natural ingredients and significant penetration of internet, smartphone, and social media applications. Despite the growth, the overall penetration for non-specialty drugs in mail-order and online pharmacies remains low, representing a significant portion of specialty prescription revenues. The evolving landscape of online pharmacies in the cosmeceuticals sector reflects a trend towards more accessible and customizable personal healthcare solutions​​.

Technological innovations are setting the stage for a new era in pharmaceutical care and management. AI’s role extends to areas like inventory management in retail pharmacies, where it predicts patient needs and enhances supply chain efficiency. Blockchain technology enhances supply chain transparency and legitimizes medical commodities, especially crucial in areas affected by counterfeit drugs. Blockchain also plays a vital role in patient-centric Electronic Health Records and telemonitoring systems. For instance, PharmaGo, an innovative platform developed in response to the pandemic, provides a comprehensive online pharmaceutical service, demonstrating the significant advancements in healthcare accessibility and pharmacy service delivery​​.

These technological advancements are instrumental in improving data sharing and collaboration among healthcare professionals. They offer significant potential for personalized medicine through data analytics, playing a crucial role in patient engagement and self-management of health. The future trends in the pharmaceutical sector, particularly influenced by the COVID-19 pandemic, indicate a shift towards Pharmaceutical Digital Marketing (PDM) and a more consumer-centric approach. AI’s potential in revolutionizing pharmacy includes automation of routine tasks, personalized medication management, real-time patient data access, and the identification of patterns in medication adherence and potential drug interactions​​.

Data availability

No datasets were generated or analysed during the current study.

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The researcher would like to thank the Deanship of Scientific Research, Qassim University for funding the publication of this project.

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Ahmad Almeman

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Almeman, A. The digital transformation in pharmacy: embracing online platforms and the cosmeceutical paradigm shift. J Health Popul Nutr 43 , 60 (2024). https://doi.org/10.1186/s41043-024-00550-2

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DOI : https://doi.org/10.1186/s41043-024-00550-2

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Decarbonization dynamics: New analysis unveils shifting trends in the voluntary carbon offset market

As humanity grapples with the fight against climate change, reducing greenhouse gas emissions is urgently necessary. One way to achieve this is through the carbon offset market, where organizations or individuals can buy credits from emissions-reducing projects.

Now, researchers from Kyushu University, Japan, in collaboration with Queensland University of Technology (QUT), Australia, have conducted a worldwide analysis of voluntary carbon offset programs and identified trends into which types of carbon reduction technologies are selected and prioritized. Their findings, published in the journal, Cleaner Environmental Systems , provide important insights for policymakers to improve the effectiveness and credibility of the carbon offset market.

"The carbon offset market is one of the most economically effective means of reducing carbon emissions," says first author Professor Hidemichi Fujii of Kyushu University's Faculty of Economics. "For many companies, becoming more environmentally friendly is an important priority, but reducing their own emissions may not be economically feasible. Instead, by purchasing carbon offsets, organizations can reduce their carbon footprint for a much cheaper price."

Over the last decade, as demand for carbon offset programs has skyrocketed. But until now, there has been no global analysis into which types of programs are established and why.

In this research, Fujii and Professor Shunsuke Managi from Kyushu University and QUT researchers, Dr. Jeremy Webb, Professor Sagadevan Mundree, Professor David Rowlings, Professor Peter Grace, and Professor Clevo Wilson, analyzed more than 7000 carbon offset programs worldwide from 2006-2020, sourcing data from the Voluntary Registry Offsets Database provided by the University of California, Berkeley.

The researchers split the data by region (the Americas; Africa and the Middle East; the Asia-Pacific, and Other regions) and classified each carbon credit project into three categories: renewable energy like wind and solar; forestry and land management including reforestation and deforestation prevention; and other technologies, such as household technologies and waste management.

The researchers then focused on four indicators to track shifts in the voluntary carbon credit market: PRIORITY , which tracks what percentage of the total carbon credits come from each particular project; SCALE , which measures the total credits issued for each project, IMPORTANCE , which is indicated by the number of projects in each category, and ACTIVITY, which is based on the total number of carbon offset programs.

In forestry and land management, issued carbon credits initially increased due to United Nations-led REDD and REDD+ programs, aimed at reducing deforestation in developing countries. However, after 2016, the priority shifted towards projects such as improving the carbon dioxide absorption in forests, mainly in developed countries, like the United States.

"On the one hand, these nature-positive solutions are very important, as they simultaneously address the problem of climate change and biodiversity loss," says Webb and Wilson. "On the other hand, these projects are much harder to monitor and estimate the resulting carbon capture, leaving the system open for abuse. Additionally, leakage can occur, which is when stronger forestry protections in one country can drive deforestation somewhere else."

Webb and Wilson therefore emphasized the importance of establishing a robust regulatory regime and monitoring framework to ensure the effectiveness and credibility of forestry and REDD+ carbon offset programs in the future.

For renewable energy, the researchers found that in recent years, an increase in carbon credits issued was predominantly driven by wind and solar projects, particularly within the Asian-Pacific region.

"Most voluntary carbon credit projects are in India and China, where electricity shortages and coal-related air pollution have incentivized an increase in renewable energy projects like solar and wind," says Fujii. "Furthermore, the falling costs of these technologies has also boosted their priority."

For the category of other technologies, the researchers found a significant increase in priority for household and community carbon offset projects, mainly due to improved cookstove programs in South Asia and Sub-Saharan Africa. These projects reduce CO2 emissions and improve health and convenience, explaining their growing priority.

In future research, the team plans to introduce new factors into the analysis, such as legal factors and energy market factors.

"Changes in energy market prices and the new laws will likely impact the price and amount of carbon credits issued in the future, so it is very important to apply econometric models to determine causality in order to verify the effects of policy implementation" concludes Fujii.

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• Hidemichi Fujii, Jeremy Webb, Sagadevan Mundree, David Rowlings, Peter Grace, Clevo Wilson, Shunsuke Managi. Priority change and driving factors in the voluntary carbon offset market . Cleaner Environmental Systems , 2024; 13: 100164 DOI: 10.1016/j.cesys.2024.100164

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Stock market today: Wall Street drifts near its records in another quiet day of trading

The New York Stock Exchange is shown on Tuesday, May 21, 2024, in New York. Stocks on Wall Street were mixed in quiet premarket trading as more retailers report solid results at the tail end of earnings season. (AP Photo/Peter Morgan)

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NEW YORK (AP) — U.S. stocks are drifting around their record levels on Tuesday as Wall Street looks to be headed for another quiet day of trading.

The S&P 500 was 0.2% higher in midday trading and on track to surpass its record set last week. The Dow Jones Industrial Average was up 78 points, or 0.2%, as of 11:25 a.m. Eastern time, and the Nasdaq composite up 0.1% a day after setting its latest all-time high.

Indexes have climbed to records largely on expectations for the Federal Reserve to cut interest rates later this year as inflation hopefully cools. More reports showing big U.S. companies earning fatter profits than expected have also boosted the market.

Zoom Video Communications added 1% after it joined the chorus line of companies delivering a stronger profit for the latest quarter than analysts expected.

Lam Research was also helping to support the market after the supplier for the semiconductor industry announced a program to buy back up to $10 billion of its own stock. The company also said it will undergo a 10-for-one stock split, which would bring down each share’s price and make it more affordable to more investors. Its stock rose 1.6%.

They helped to offset a 4% drop for Palo Alto Networks. The cybersecurity company delivered a better profit report than expected, but it gave a forecasted range for revenue in the current quarter whose midpoint was a hair below analysts’ expectations.

Trump Media & Technology Group, the company behind Donald Trump’s Truth Social network, sank 8.5% after disclosing a net loss of $327.6 million in its first quarterly report as a publicly traded company.

Lowe’s fell 3% despite reporting better results for the latest quarter than analysts had feared. It said it’s maintaining its forecast for revenue this year, including a dip of up to 3% for an important underlying sales figure as high interest rates keep a lid on customer activity.

Rates for mortgages, credit cards and other payments have become more expensive because the Federal Reserve has been keeping its main interest rate at the highest level in more than two decades. It’s trying to pull off a tightrope walk where it grinds down on the economy just enough through high interest rates to snuff out high inflation but not so much that it causes a painful recession.

An encouraging report released last week showing inflation may finally be heading back in the right direction following a discouraging start to the year raised hopes that such a “soft landing” for the economy may be possible. It also strengthened hopes that the Federal Reserve will cut its main interest rate once or twice this year.

A top Fed official, Gov. Christopher Waller, said in a speech Tuesday that he’s expecting to see moderation in economic data after reports recently came in weaker than expected on sales at U.S. retailers and on the strength of U.S. services businesses. That in turn should help put downward pressure on inflation.

But he said that he would “need to see several more months of good inflation data before I would be comfortable supporting an easing in the stance of monetary policy,” unless the job market weakened significantly before then.

Hopes for coming cuts to rates have sent Treasury yields lower, which eases the pressure on the stock market. The yield on the 10-year Treasury slipped to 4.41% from 4.48% late Monday. The two-year yield, which more closely tracks expectations for Fed actions, slipped to 4.82% from 4.85%.

This week doesn’t have many top-tier economic reports, and the biggest potential for sharp moves in the market will likely come from upcoming profit reports.

The week’s headliner is Nvidia, whose stock has rocketed higher amid a frenzy around artificial-intelligence technology. It will report its latest quarterly results on Wednesday, and expectations are high.

Target also reports on Wednesday with Ross Stores following Thursday. They could offer more details on how well spending by U.S. households is holding up. Pressure has been rising on them amid still-high inflation, and it seems to be the highest on the lowest-income customers .

In stock markets abroad, indexes were lower across much of Europe and Asia.

Indexes fell 2.1% in Hong Kong and 0.4% in Shanghai after S&P Global Market Intelligence raised its forecast for Chinese economic growth this year to 4.8% from 4.7% in April, but stressed it was not overly optimistic.

“The overall outlook of a tepid economic recovery remains unchanged, with the expansion supported by enhanced policy stimulus, strengthening external demand and gradually improving private-sector confidence,” it said in a report.

AP Business Writers Yuri Kageyama and Matt Ott contributed.