How Globalization Influenced Innovation Process

Globalization can be defined as the mechanism by which companies or other organizations grow or start operating on an international scale. A firm network is a composition of trusted relationships between the partners and their firms, which promotes the sharing of knowledge and information that contributes to the expansion of business out of the region. Globalization and the focus on firm networks have, in recent years, influenced the understanding of the innovation process significantly.

Globalization brings opportunities and pressures to domestic companies in developing markets for innovation and improvement of their competitive position by opening up borders to trade and foreign investment. Many other pressures and possibilities operate by increasing rivalry and connections with international enterprises. The increasing intensity of global awareness indicates significant advantages of globalization. While globalization, as a result of its potential disadvantages, has been highly criticized, this study shows that globalization’s extension of technology across borders has been doubled. Firstly, globalization makes it easier for countries to access international information. Secondly, this increases international competition even with the emergence of emerging market companies and improves the opportunities for businesses to innovate and implement foreign technology.

The positive effects have been particularly important for emerging market economies which have increased their innovation potential and productivity growth with international expertise and technology available. People find the growing involvement of international supply chains in global supply chains a significant factor behind the capacity building in developing market economies, although not all businesses have benefited from re-allocating some innovation operations often to other sections of the global value chain.

The increasing information and technology transfers to emerging markets have partially offset the impact of the recent slowdown in technology border innovation and helped drive the convergence of revenues in many emerging economies. On the other hand, the technology stagnation at the border has more affected advanced economies (Aslam et al., 2018). It is finally clear that technology leaders themselves profit from innovation from each other. This implies the possibility of beneficial spillovers from these new innovators to traditional innovators with the increasing input from China and Korea to the expansion of the technology border. Knowledge and technology are not just one way.

Globalization brings about the spread of know-how. It promotes awareness and technology spread, helping to spread opportunities for growth across countries. But connectivity percentage is not sufficient. The most often required scientific and engineering knowledge is to assimilate and expand upon international knowledge. Investments in learning, human resources, and research and development at home are therefore necessary to strengthen the ability to absorb and use the information at home efficiently. It also needs an adequate degree of security and respect for intellectual property protection, both domestic and foreign, to maintain innovators’ ability to recover expenses while ensuring that new information promotes development globally.

Politicians and governments must also ensure that economic development gains are shared equally across the population through globalization and technological advancement, including by ensuring that newly acquired technology is not used by innovation firms to obtain undue dominance of a market to the detriment of customers.

Globalization and firm networks improve innovation. This innovation is usually displayed in various sectors of life, and the most common sector is the sector of business and production. The production processes and business thrive better due to the innovation of new skills and knowledge. When these skills and knowledge are put into good practice, poverty is eradicated, and this is the most important impact of globalization and firm networks. Some of the various ways in which globalization and firm networks impact business and productivity include; providing businesses in less developed countries with better opportunities to tap into more and more big markets worldwide (Aslam et al., 2018). Through globalization, businesses in less developed countries can interact with businesses in developed countries and therefore learn a lot from them. This leads to their utmost success. Access to technology, capital flows, human capital, larger export markets, and cheaper imports is the benefit that the production process in less developed countries enjoys as an impact of globalization in innovation.

Advanced innovations as a result of globalization and firm networks enable businesses in under-developed countries to be able to access better options for their business. Access to cheaper imports and large markets for their exports are some of the better options. These options for their business make these kinds of businesses in less developed countries thrive better than in a case where they had no access to such options. The other benefit that globalization in innovation has brought is that these small businesses in less developed countries can grow themselves through the skills and knowledge gained from globalization and therefore end up joining the international networks of production and the supply chain. When they become part of these international production networks, they thrive more and more.

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PapersGeeks. "How Globalization Influenced Innovation Process." July 1, 2022.


PapersGeeks. 2022. "How Globalization Influenced Innovation Process." July 1, 2022.


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