Socio-economic changes taking place in different countries and regions of the world along with the technological advances are the key features that shape the modern economy. These transformative processes have seized various countries, making them organically woven into the context of globalization. According to Daniels et al. (2015), globalization is considered as the elimination of barriers between the counties that results in the interdependent relationships of word economies.
The transformation of the modern world economy into a single market for goods, services, labor power and knowledge has a considerable influence on the national economy. Thus, the initial conditions in terms of the level of development or the availability of resources are line with the dynamics of the global economy. Besides, a range of subjective factors, including political, cultural, religious and legal, shape the model of economy corresponding to the political and economic interests (Daniels et al., 2015). Nonetheless, the concept of development should be inscribed in the global context, as each individual country is an integral element of the global economy.
In order to ensure competitive advantages and its place in the international division of labor, countries seek to join forces, creating regional integration groupings and alliances. Globalization tends to dictate the course of reforms as well as put certain limits on the economic development policies in each country. Competition in the global market has become a powerful motivating factor for the application of scientific and technological progress (Cavusgil et al., 2012). It is obvious that there is a need for constant updating of products and reducing the cost of production based on modern technologies. The need for modernization of the economy makes any country embark on the path of globalization in order to determine the direction towards open market-oriented participation in global economic relations. It is virtually impossible not to notice that national economic systems are integrated into the regional and global associations. The practice of many countries, including developing ones has shown that the external relations in different spheres of economy tend to benefit to national economies. Apart from that, globalization is believed to contribute to the decline in the level of poverty around the globe (Cavusgil et al., 2012).
However, when it comes to the transition to an open economy, there is a number of serious problems in terms of competitiveness of national products and finding its own niche in the international arena. It is vital not only to establish a strong position in the existing markets, but also ensure the penetration and build own place in the new markets. Promotion of products, which are traditional for the exports of developing countries to world markets requires continuous efforts by the government, producers and exporters. Such strenuous efforts are needed due to the degree of saturation of the world market.
When it comes to the global marketplace, it is worth noting that the difference between “mature” and “rapid-growth” countries seems to disappear, thereby shifting global business towards rapid-growth economies. In this regard, demographics, urbanization rate, along with rising income levels have a significant impact. Compared to the United States, Vietnam has an agrarian orientation of the economy, however it is characterized by still low level of welfare of the population. Thus, the country is making great efforts to enter the world market, by meeting with the general difficulties and overcoming the complex economic situation. Another key category puts an emphasis on trade flow patterns, as the interdependence of the word technologies is likely to result in the continued transformation.
References
Cavusgil, S. T., Knight, G., & Reisenberger, J. R. (2012). International business: The new realities. (2nd ed.). Upper Saddle River, New Jersey: Prentice Hall.
Daniels, J. D., Radebaugh, L. H. & Sullivan, D. P. (2015) International business. (15th ed.). Chap. 1, Globalization and international business, pp. 1-29.
http://www.ey.com/GL/en/Issues/Driving-growth/Globalization---Looking-beyond-the-obvious
