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Fall Of Silicon Valley Bank And Its Impact On Worldwide

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Silicon Valley Bank’s fall is a stark reminder of how quickly a financial crisis can spiral out of control and have a global impact. From bankruptcy to unfilled orders and liquidity problems, the dramatic decline of an institution that was once so reliable has been truly devastating.

It brought about unprecedented levels of disruption around the world as governments scrambled to find solutions for their affected citizens and companies. Numerous businesses faced tough decisions regarding payment delays and operations continuity, resulting in hugely painful losses for many stakeholders both directly and indirectly affected.

Silicon Valley Bank, known as the 16th largest bank in the world and also plays its part in lending money to the most prominent technology startups, collapsed last 10 March 2023 after defrauding all its investors and depositors. The impact of the Silicon Valley Bank Collapse was that there was a huge recession in the markets across the globe.

The Silicon Valley Bank which is based in California became one of the biggest bank failures after the 2008 financial crisis and barely 2 days after its declaration was made, it saw a sharp drop in deposits resulting in Share sales started to be organised, resulting in both investors and customers jumping off the sinking ship upon hearing the news of the Silicon Valley Bank Collapse.

This profound erosion of confidence in banks and financial institutions puts into perspective our interconnectedness, as what happens in one corner of the world can have lasting ripple effects on another. It also serves as a case study on how institutions must constantly strive to stay ahead with risk management practices that identify potential weaknesses before they become unmanageable.

Silicon Valley Bank

Rated as the 16th largest bank in the United States until the crash, Silicon Valley Bank also known as (SVB) is a regional bank in the US, headquartered in Santa Clara, California.

Incorporated in 1983, SVB was reckoned as quite trendsetting because it was among the back then banks to set focus on start-ups and venture capitalists.

In December 2022, 56% of its loans were to VCs and PEs secured by their limited partners. SVB is held by SVB Financial Group, which has operations in the US across ten countries, including India.

Silicon Valley Bank Collapse

The Silicon Valley Bank UK unit is on the verge of being announced bankrupt, the business has already been closed by the bank and new customers are not being taken by the bank anymore since then.

On 11 March 2023, leaders of about 180 companies presented a letter to Britain’s Chancellor Jeremy Hunt calling for intervention in the aftermath of the Silicon Valley Bank Collapse.

Although it is being said that the UK is just the start in relation to the Silicon Valley Bank Collapse. Silicon Valley Bank also had branches in Canada, Denmark, Germany, India, Israel, and Sweden, and there are frequent warnings that a Silicon Valley Bank failure could wipe out startups across the globe without the existence of a government.

Some of the facts that have become clear regarding the bankruptcy of Silicon Valley Bank:

  • The Silicon Valley bank effected what was shown to be the biggest retail banking failure since the 2008 global financial crisis.
  • Valley Bank was closed on 10 March by US regulators and its deposits were seized. According to Silicon Valley Bank News, the hi-tech lender’s share price plummeted among customers running on deposits.
  • The Silicon Valley Bank Collapse was when the Silicon Valley Bank invested most of its assets in US bonds after earning a massive amount of money by investing in tech startups.
  • And to reduce the rate of inflation, the Federal Reserve Bank manipulated interest rates last year 2022, resulting in bond prices going down.
  • Startup funding has also been reduced in the midst of the covid-19 pandemic, as bank customers have withdrawn massive amounts of money.

How did it fail?

The fall of SVB is rather unique because it’s a case of asset liability management (ALM) mismatch concerns, which show solvency issues for the bank. From the end of 2019 to March 2022, the bank’s deposits of more than $198 billion; growth outstripped the industry by around 37%.

But hit by the pandemic, the deployment opportunities for funds were very limited. Hence, deposits were channelised towards investments where there are two types of instruments which are shorter duration investments classified as available for sale (AFS) and longer duration instruments classified as held to maturity.

Who has been impacted by Silicon Valley Bank’s collapse?

Silicon Valley Bank (SVB) is based in Santa Clara, California, but has its other branches in Canada, China, Denmark, Germany, India, Israel, Sweden, and the UK as well.

The complete extent of exposure and damage has yet to be completely understood, but various governments sprung into action over the weekend to start assessing the situation.

(CA)Canadian bank regulators have seized SVB’s branch to protect creditors, according to a statement released from the country’s financial superintendent, Mr Peter Routledge. Toronto ad tech firm AcuityAds has come up with nearly all of its cash, totalling about $55 million, in SVB.

Over 60 Indian startups backed by US startup accelerator Y Combinator (YC) have over $250,000 tied up in SVB, according to TechCrunch report data, while there are more that have over $1 million. India’s state minister of technology Rajeev Chandrasekhar announced through Tweet that he would meet with startups this week to assess the damage.

(IL) Israeli prime minister Benjamin Netanyahu has sworn to carry out a damage assessment in SVB. Domestic business paper Globes said that SVB’s collapse has been similar to “closing the oxygen pipe” to the Israeli tech industry, which has close ties to Silicon Valley.

(CN)Chinese firms, many in the biotech industry, have been rushing to reassure spooked investors. Among them is BeiGene, one of China’s leading firms researching cancer treatments, which launched around 4% of its cash, or about $175 million, is frozen in SVB.

SVB’s China joint venture, SPD Silicon Valley Bank, declared over that same weekend that its operations are “stable” and “independent.” Meanwhile, other startups firm are seeking banking alternatives.

 According to a Reuters report, around 16 firms in Europe’s tech and life sciences sectors had around $190 million in exposure to SVB. EU (Eupore) analysts say there’s limited risk for the euro zone’s banks, but that hasn’t stopped markets from sliding.

How SVB Crisis opened

On 10 March 2023, the tech and startup-focused lender was ordered to shut down by California regulations. And it was asked to keep it under the management of the Federal Deposit Insurance Corporation. In response to the How SVB Crisis opened, an overnight jolt occurred when SVB shares plunged a whopping 60% in premarket trade.

After this, the depositors started competing to withdraw money from the banks.

Meanwhile, news came out that SVV Financial Group was also in the process of selling itself after its failed fundraising attempt in the market.

But in relation to the Silicon Valley Bank Collapse, there were no advantages of any kind because the deposits went out very quickly. And sooner after it was posted by the FDIC that SVV had been closed down by the California Department of Financial Production and Innovation.

A brief timeline of Silicon Valley Bank’s collapse

  • March 9: SVB’s stock fell 60%, amounting to an $80 billion wipeout

  • March 10: California regulators shut down SVB and place it under the management of the Federal Deposit Insurance Company (FDIC)

  • March 12: US regulators state that by March 13, depositors will have access to their funds, including those above the $250,000 insurance threshold. US treasury secretary Janet Yellen declared SVB will not receive a bailout.

  • ​March 13: The UK government and Bank of England came up with the facilitated sale of SVB’s UK unit to HSBC.

Impact of Silicon Valley Bank’s collapse on Indian startups

The collapse of Silicon Valley Bank, the biggest vendor in the startup ecosystem, is the possibility to negatively impact the Indian startup scenario as well as it has injected a lot of uncertainty in the sector overnight, industry experts say.

“Hopefully the matter will get resolved soon, but I think it is a big shot for Indian startups,” Ashu Garg, a prominent Silicon Valley-based venture capitalist and early-stage investor for over the last two decades, told Press Trust India in an interview.

The FDIC, in a statement, said as of December 31, 2022, the Silicon Valley Bank had around USD 209.0 billion in total assets and about USD 175.4 billion in total deposits. At the time of closing, the number of residues in excess of the insurance limits was undetermined.

The number of uninsured deposits will be determined once the FDIC obtains extra information from the bank and customers.

“The Silicon Valley Bank has been a real supporter of the Indian startup scene and has provided banking services. Most Indian startups that do business in the US use this bank because it is one of the few institutes willing to work with Indian banks. A lot of the banking institutes do not want to work with an overseas client,” Garg, an alumnus of IIT Delhi, said.

“So, SVB has been able to work with the Indian companies that do not have US employees. So if they (are gone complete), it will be very problematic for the Indian (ventures),” he said in response to a question.

 Over the past various years, SVB has been one of the most preferred choices of banking for startups and the tech industry in Silicon Valley, mainly because of its understanding of the sectors and flexibility in many aspects suiting the startup ecosystem in India.

Given that every third startup in Silicon Valley is founded by Indian Americans, experts feel a significantly large number of these founders would be impacted as early as next week in terms of even making basic payments and giving paychecks to their employees.

Similarly, a huge number of Indian startups which do not have even a staff or an office in the US had opened up their accounts in the Silicon Valley Bank as it let them do so without many regulatory questions and with a client-friendly approach.

The implications of the collapse of SVB on Indian Americans and their companies are very serious about it, Garg said. “The Silicon Valley Bank is the biggest vendor to the startup ecosystem. So now you have all these loan facilities.

Summary

The collapse of Silicon Valley Bank is the biggest bank failure in the United States since the global financial crisis. The bank’s vulnerability was the result of having a high proportion of uninsured deposits and a huge proportion of deposits invested in hold-to-maturity securities.

While Asian lenders are being seen as more insulated from direct risk, investors questioned whether a government rescue plan will prevent any more fallout from SVB’s collapse. According to a report from Bloomberg data, the combined market capitalization of the MSCI World Financials Index and MSCI EM Financials Index dropped about $465 billion in three days.

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International Women’s Day 2023: Everything You Need To Know

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International Women’s Day (IWD) is around the corner every year on 8 March. It is widely celebrated to honour the social, economic, and cultural achievements of women in the world. 

International Women’s Day is observed as a global holiday and it is celebrated every year on the same date, which is 8 March. 

The day focuses on important issues such as gender equality, reproductive rights, violence and abuse against women, equal rights for women, and many more. The day is observed to celebrate every woman across the world and take steps toward women’s empowerment.

Every year International Women’s Day (IWD) is celebrated with a different theme. The theme for International Women’s Day 2023 has already been decided and people should plan events based on that theme. 

We should remember all those important women on this day who fought for women’s rights and for society. This day is significant for the growth of our society.

The day is an opportunity to celebrate the achievements made by women around the globe while also highlighting ongoing gender disparities.

On this day, we unite, celebrate and honour the notable accomplishments of sisters from every corner of our planet, who work hard towards effecting positive changes that empower and uplift millions of girls worldwide who continue to face systemic discrimination daily.

International Women’s Day:  History and Significance

On February 28, 1909 the Socialist Party of America established National Women’s Day in New York. Theresa Malkiel, a labour activist, came up with this idea as a way to remember the city-wide demonstrations against garment workers. 

German delegates later that year advocated the notion of a women’s day, though no exact date was decided, taking inspiration from American socialists. 

Women’s rights advocate Clara Zetkin suggested an international women’s day next year at the second International Congress of Working Women in Copenhagen, Denmark, to give women a stronger voice and encourage womanhood to advance their demands for equal rights.

The female attendees, who represented 17 nations and included Finland’s first three female MPs, endorsed it with one accord. The inaugural celebration of International Women’s Day happened in March 1911, and in 1913 the date was set as March 8.

First annual theme of International Women’s Day 

In 1996, the UN declared its first annual theme “Celebrating the Past, Preparing for the Future.” 

In 1977, the UN General Assembly proclaimed March 8 as International Women’s Day in favour of women’s rights and world peace. The United Nations first remarked on International Women’s Day in 1975.

Since then, the UN has celebrated the day by deciding on a theme every year.

This day is noteworthy because it honours women’s accomplishments, and the power of women hood, promotes gender parity and gender equality and raises money for various charities that support women.

The theme for International Women’s Day in 2023

“DigitALL: Innovation and technology for gender equality” is this year’s Women’s Day theme. The theme for the upcoming 67th Session of the Commission on the Status of Women (CSW-67), “Innovation and technological transformation, and education in the digital age for achieving gender equality and the empowerment of all women and girls,” is in line with this.

Importance of International Women’s Day

International Women’s Day has developed into a forum for womanhood and promotes women’s achievements.

It has been used to draw attention to problems like gender-based violence, pay disparities, lack of access to healthcare and education, and underrepresentation of women in society and encourage women and develop women entrepreneurs.

The development of women rights all across the world is one of the most noteworthy accomplishments of International Women’s Day. In many nations, women have gained the right to vote, and legislation protecting them from harassment, violence and discrimination in society has been established. 

With more girls attending school and life-saving medical care than ever before, women have also made significant advancements in education and healthcare.

Poverty, violence, and prejudice based on gender, colour, ethnicity, and sexual orientation are just a few of the substantial obstacles that women currently face on the street. 

Women’s matters have continued to be underrepresented in political and economic decision-making in many parts of the world, and their perspectives are frequently neglected in talks concerning laws that impact their lives.

The celebration of International Women’s Day serves to raise awareness of the need for continual activity and advocacy on behalf of women in society. 

It is a call to action for all people and organisations to join forces to build a society where women are getting their rights, respected, given the opportunity to succeed, and given the power to realise their full potential. 

By observing International Women’s Day, you can keep bringing attention to the problems that women face and spur forward constructive change for future generations.

Whatsapp features for women’s safety

• Pick your caller- On WhatsApp you can easily “block and report” an account to WhatsApp anytime. You will no longer be able to get messages or calls from blocked contacts or numbers.

• Control over messages- You can set screenshot blocking to prevent other members from taking photos of messages, and other information that they may not want in the public domain to get. This offers an extra layer of security.

• Settings for group privacy- The group invite system and privacy settings of WhatsApp permit you to control who can add them to groups. This protects your privacy and prevents people from adding them to groups they don’t want to be a part of.

• Control over online information- On WhatsApp, you can also control your online presence or visibility by choosing who can see when you’re online and who can’t. 

• Protect the privacy of your WhatsApp account- By activating the Two-Step Verification feature, you can protect yourself in two ways. This is a helpful feature if the phone is hacked or a SIM card is stolen.

Things you can do to celebrate women’s day in school & colleges

  1. Discuss with students the history of International Women’s Day and the purpose of celebrating, and its importance to society.
  2. You ask them to write a special composition, blog or article to celebrate the achievements of women in society and what contributions they have made to education.
  3. Explore statistical information about women in the workforce with your students.  
  4. Ask students to make posters to display on International Women’s Day.
  5. Ask them to share the information that they learn about it with someone you think does not understand the need for an “International Women’s Day.”

5 fundamental rights every Indian woman should know

1) The right to education

As education can empower women and provide them with better opportunities in society. Unfortunately, many girls in India still do not get an education, and there is a significant gap between male and female literacy rates in India.

As of 2021, India recorded a higher nationwide literacy rate among men than women, at respectively 84.4% of the male population and 71.5% of the female population.

2) The right to healthcare

The right to healthcare includes access to basic healthcare services, maternal healthcare, and family planning services for the women in India who often face numerous health challenges, and access to healthcare services can help them address these issues.

3) The right to work

Women should have equal opportunities to earn a livelihood and contribute to the country’s economy. Unfortunately, women in India face many barriers to women entrepreneurs, including discrimination and harassment in the workplace.

4) The right to political participation

As women should have equal opportunities to participate in political matters and be represented in government. Despite some progress in recent years, women are still massively underrepresented in Indian politics.

5) The right to live 

Right to live with dignity and freedom from violence at home and in society. Women in India often face various forms of violence, including domestic violence, sexual harassment, trafficking, etc. Addressing these matters and creating a safe environment for women is crucial.

Lesson to learn from 5 leading women of the world

1. Take Every Chance, Drop Every Fear

  • Arianna Huffington, founder of The Huffington Post and Thrive Global

Take Away from her:

Arianna Huffington built a global brand from scratch she wouldn’t have pulled it off and had allowed her fears to hold her back. If you have a business idea you think might just work, don’t think about the negative outcomes: take initiative and see where it leads you in the race. 

You’ll be able to tweak your business strategy as you go, but unless you hit the road, you’ll be robbing yourself of a chance at the business environment. 

2. Don’t Be Ashamed to Ask for Directions

  • Oprah Winfrey, actress, book author, producer and host of The Oprah Winfrey Show

Take Away from her:

 You’ll never know all there is to be known about a successful business, but not asking for directions is the safest and easy way to get lost along the way.

You should know how important it is to do industry-related homework in advance and not be ashamed to ask questions and seek help or guidance when you need it from others.

3. Quality Is As Important As Quantity

  • Lailah Gifty Akita, founder of Smart Youth Volunteers Foundation

Take Away from her:

In a world that revolves around quantity, quality is what makes a business stand out in the crowd. Quality takes time, commitment, and long-term investments when it comes to business. Money spent on first-rate office equipment is an investment in employee comfort, well-being, and work motivation and as such has a hand in the quality of both workflow and output of the business. 

4. You’ll Make Mistakes – Learn from Them

  • Sara Blakely, Spanx founder

Take Away from her: 

Sara made mistakes, and she grew from them. Failing is a sign that you’re pushing the limits of your comfort zone and taking risks in every matter; as such, errors are an integral component of the path to success.

 Mistakes are a source of valuable lessons on how you can tweak business strategy and approach to ensure the best results in the long run in the market, so make them – and learn from them, too.

5. Find Your Passion and Go After It

  • Karren Brady, English author, columnist, TV personality and vice-chairman of West Ham United F.C. 

While doing business things gets tougher than usual, it’s the passion for your line of work that will keep you in the right lane and heading for top-notch performance metrics at full speed.

For this reason, the spark is every business woman’s best friend: find your passion beyond fame and money,  which will satisfy your needs and let it guide you on days when the entrepreneurial waters grow murky.

Summary

International Women’s Day (IWD) is celebrated on March 8 of every year. Honouring women’s social, economic, and cultural accomplishments in their celebration. 

The day focuses on essential topics like gender equality, women’s equal rights, violence and abuse against women, and the reproductive rights of women worldwide. The day is celebrated to honour all kinds of women across the world.

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Discover How Globalization Has Transformed Our World: A Brief History

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Globalisation or globalisation is driven by the convergence of cultural and economic systems worldwide. The globalisation of market convergence promotes and in some cases essential increased interaction, integration and interdependence among nations. The more countries and regions of the world become politically, culturally and economically, the more globalised the world becomes.

Globalisation is the process by which ideas, knowledge, information,  goods and services spread worldwide.

In business, the term is used in an economic context to describe integrated economies marked by free trade, the free flow of capital among different countries and easy access to foreign resources, including labour markets, to maximize returns and advantages for the common good.

What is Globalization?

Globalization means the speedup of movements and exchanges (of human beings, products, services, capital, technologies or cultural practices) all over the world. One of the effects of globalization is that it promotes and increases interactions between different countries and populations around the globe.

Examples of globalization in history

In 130 B.C.The Silk Road was a trade route between China and the Mediterranean Sea area. It led to the exchange of not only goods but also culture and knowledge. As merchants grew to understand Chinese culture through their trades, an appreciation for Chinese culture began to flourish well beyond China’s borders. This is the best example of globalization in history.

How did globalization start?

Globalization or globalisation is the process of interaction and integration among people, businesses, and governments worldwide. The term globalization first appeared in the early 20th century and came into popular use in the 1990s to describe the unprecedented international connectivity of the post-Cold War world.

Its origins can be traced back to the 18th and 19th centuries due to advances in transportation and communications technology. This increase in global interactions has caused a growth in international trade and the exchange of ideas, beliefs, and cultures across the world.

Globalisation is primarily an economic process of interaction and integration that is associated with the social and cultural aspects of the nation. However, disputes and international diplomacy are also large parts of the history of globalization, and of modern globalization.

What is the globalization of the market?

Globalization is the ability to produce or sell products and services in global markets in open competition with the world market. There exists comprehensive foreign competition with respect to almost every product across the world.

The globalization of markets has massively increased international competition. While pursuing the strategy of globalization, the business has to face the challenges of managing human, technological, and physical resources in world markets.

Market globalisation is a synergistic term combining the promotion and selling of products and services in an increasingly interdependent and integrated global economy. It makes businesses stateless, without walls, with the internet an integral marketing and cultural tool. Understanding consumer needs within target nations helps formerly ethnocentric companies build a global marketing mix in which product, price, place and promotion are geared toward a specific country’s needs.

Examples of Globalization

1) Economic globalization:

Economic globalization is the development of trade systems operating across national boundaries such as corporations or NGOs. Examples of economic globalization are Free trade agreements, such as the North American Free Trade Agreement and the Trans-Pacific Partnership.

2) Financial globalization:

It can be linked with the rise of a global financial system with international financial exchanges and monetary exchanges such as Stock markets, for example, the financially connected global world.

3) Cultural globalization:

Refers to the interpenetration of cultures which, as a consequence, means nations adopt principles, beliefs, and costumes from other nations, losing their unique culture to a unique, globalized supra-culture; cultural globalization example is the trading of commodities such as coffee or avocados.

4) Political globalization:

The development and the growing influence of international organizations such as the UN or WHO means governmental action takes place at a global level. The creation and existence of the United Nations have been called one of the basic political globalization examples.

Importance of globalisation

Globalization changes the way nations, businesses and people interact with each other. Specifically, it changes the nature of economic activity among nations, expanding trade, opening global supply chains and offering access to natural resources and labour markets.

Globalisation is also changing the way trade and financial exchange and interaction occur among nations and also promoting the cultural exchange of ideas. It removes the barriers set by geographic limitations, political boundaries and political economies.

The era of globalization creates opportunities for nations on an international level. In addition, people coming from other nations to do business and work bring with them their own cultures, which influence and mix with other cultures.

Causes of Globalisation

  • Improved transport making international travel easier. For example, there has been rapid growth in air travel, and shipping enabling greater movement of people and goods on an international level.

  • Containerisation from 1970, there was a quick adoption of the steel transport container. This reduced the price of intermodal transport, making trade cheaper and more efficient.

  • Improved technology makes it easier to communicate and share information across the world.

  • Growth of International companies with a global presence in many different economies.

  • Growth of global trading boost which has reduced national barriers. It reduced tariff barriers which encourage world trade. Often this has occurred through the support of the WTO.

  • Firms exploiting gains from economies of scale to gain expanded specialisation. This is an important feature of the new trade theory.

  • The growth of global media means countries are increasingly interconnected. (e.g. recession in one country affects global trade and invariably causes an economic downturn in major trading partners across the nation.)

  • Improved mobility of capital in the past few decades, there has been a general reduction in capital barriers, making it easier for capital to flow between different nations. This has increased the ability for companies to receive finance. It has also boosted the global interconnectedness of global financial markets.

Impact of Globalization on the Indian Economy

  • Investments and new jobs, local companies supplying raw materials, etc. to these industries have prospered

  • Indian companies gained success through collaborations with foreign companies. With Big Indian MNCs contributing to world trade, India can raise its voice for fairer trade rules at (WTO)World trade organisation.

  • Globalisation has created new opportunities for Indian companies, mainly businesses for IT companies.

  • Exports got increased therefore making trade more favourable.

  • Consumers have the option to choose from a wide range of products- they can have the cheapest, best thing.

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Myths about globalization

  • Globalization leads to a reduction in inequality within the nation.

  • People with poor skills will not get jobs due to globalization. Companies will hire people from different countries with good skills.

  • Immigration laws change often, and in some countries, it will become difficult to secure visas for employees that are foreign nationals.

  • Loss of cultural identity begins to lose their distinctive features and will lose global diversity.

  • Lower costs do benefit many employees, but it also creates tough competition that leads some companies to search for cheap labour sources in other countries.

Loss of cultural identity begin to lose their distinctive features and will lose global diversity

Globalisation influences our cultural identity. Technology allows us to eliminate communication boundaries and interact with each other on a global scale. It is speeding up social and cultural processes such that human activities no longer constrain time and space.

The future of globalization

Globalization will connect more consumers to get access to high-quality, trustworthy, innovative products that they could not have had otherwise. Businesses may operate globally, but they’ll need to adapt to regional sources.

The digital economy will change the way goods and services will get developed and delivered in industries. Every business sector will benefit from tourism to higher education to healthcare.

People can work more remotely, they can travel anywhere while they do their jobs, which will have a long-term effect of globalizing the travel industry which can bring more business to different nations.

Globalisation Today

The trend has reversed again in the 21st century, an era of unusual global integration. Changes in technology and international economic policies have reduced many barriers to the free flow of production, services, and capital.

Transport and communications costs have dropped at the same time, and there have also been reductions in tariffs and other barriers to international trade that have opened up the global economy.

The globalisation of the global economy has led to overall growth in international economic activity consequently, the importance of international trade in the world economy has also greatly increased.

In addition to more market-friendly policies and an acceleration of economic growth, a second significant evolution in the forces of globalisation occurred as a result of a range of countries, primarily Asian economies becoming more important economic forces in the international economy.

Summary

Globalisation is a term used to describe how trade and technology have made the world a more connected and interdependent place. Globalisation also captures in its scope the economic and social changes that have come between nations.

Globalization is the spread of the flow of financial products, goods, technology, information, and jobs across countries and cultures. In economic terms, it describes an interdependence of nations around the nation fostered through free trade.

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The Fourth Industrial Revolution: What It Means, How To Respond in 2023

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In light of the unique, amazing and thrilling nature of the Industrial Revolution, it isn’t surprising that the world’s greatest leaders had difficulty recognizing its impact. Every generation needs a new revolution. 

And the truth of the Fourth Industrial Revolution has an aggressive pace, opposite to a linear pace rather. Revolution has always changed the world and disrupted it. 

So, the Fourth Industrial Revolution is here to change the world and create the future. In no time, this global change took a stand-in in front of all the industry. Although many are scared that the revolution is so unique and amazing that it has the power to ‘robotize’ humans today.

The term “Fourth Industrial Revolution” was first coined by World Economic Forum chairman Klaus Schwab in 2016. It is often associated with Industry 4.0, which focuses on leveraging emerging technologies such as robotics, automation, and artificial intelligence (AI) to create new products and services. 

However, this revolution can potentially change some human workers with robots or machines. This revolution has promised a digital transformation like none seen before, but it also brings immense risk if companies are not able to properly structure themselves for it.

Still, at the same time, it has the power to enable creativity, empathy, and new skills. It has the potential to lift humanity into new talent,  possibilities and skills.

To learn more on this topic, read on below as we cover everything you need to know about the Fourth Industrial Revolution, its effects, and steps each one of us can take to thrive within such technological change.

What is the industrial revolution?

The Industrial Revolution, in modern history, was the process of change from an agricultural and handicraft economy to one dominated by business and machine manufacturing. These technological changes introduced novel ways of operating and living and transformed society.

This process began in Britain within the 18th century and from there unfold to alternative components of the world. Although used earlier by French writers, the term historic period was initially popularized by national economic historian Arnold Joseph Toynbee (1852–83) to explain Britain’s economic development from 1760 to 1840. 

Since Toynbee’s time, the term has been more broadly applied as a process of economic transformation than as an amount of your time in a very specific setting. This explains why some areas, like China and India, failed to begin their initial industrial revolutions till the 20th century, whereas others, such as the U.S. and western Europe, began undergoing “second” industrial revolutions by the late 19th century. 

Third Industrial Revolution in 1969, advances in computing led to machine programming, which opened the door to progressive automation.

What is the fourth industrial revolution?

The concept of the Fourth Industrial Revolution was founded in 2016 by Klaus Schwab, the founder of the World Economic Forum, in a book with a similar name. “The Fourth Industrial Revolution creates a world in which the emergence of virtual and physical systems, emergence of technology and manufacturing cooperate with each other in a flexible way at the global level”. 

The Fourth Industrial Revolution, however, is not only about new tech and connected machines and systems. Its scope is much wider than you think. Co-occurring are waves of further breakthroughs in areas ranging from gene sequencing to nanotechnology, from renewable energies to quantum computing technology. 

In the Revolution, 4IR, or Industry 4.0, conceptualizes rapid change to new technology, industries, and societal patterns and processes in the 21st century due to the rise in interconnectivity and smart automation. 

It is the fusion of these technologies and their interaction across the physical, digital and biological domains that make the Fourth Industrial Revolution fundamentally different from the previous three revolutions. 

Respond to Fourth Industrial Revolution

Humans are responsible for their every path and development. Therefore, everyone is responsible for its evolution and making daily life decisions. Revolutions are always linked to people. It is the people who have the ultimate power to change things according to the changes in society.

Additionally, people can live by their values and culture. After all, that is what separates humans from animals, their willingness to act on their own whims. Adapting to the Fourth Industrial Revolution in an individualistic way is the best way to meet the challenges of the time.

This Revolution may have the huge potential to in a way ‘robotize’ nations across the globe. Still, it’s not the outcome completely, as long as people continuously educate themselves on various technologies and use imagination, understanding, and protection to create a better environment and a new and better collectiveness, based on a shared sense of destiny.

Global leaders are continually pointing out how people must develop skills in order to survive.

In today’s constantly changing world, only those who are well aware of changes can survive high-speed lines of revolution and get the most from it.

Therefore, education is the key to having a great and calm life and a peaceful business experience. Yet, it remains to see how the technology-driven world will develop in years to come and how it will affect the future and coming generations.

How will the Fourth Industrial Revolution affect the future of work?

The fourth industrial revolution will grow in technological advancements in the workplace, leading to continuous employee training to match the development of new machines. Workers have to constantly improve their skills and productivity.

From procurement to sales, the supply chain to telecommunications, the Fourth Industrial Revolution has helped reduce costs. Employees have become liberated from manual tasks to concentrate on higher problem-solving skills with digital technologies.

The 4th Industrial Revolution has impacted every industry with The Economist predicting that 55% of jobs are vulnerable to automation. 

Employees collaborate with automation and artificial intelligence to get work done efficiently and innovatively. Digital tools can range from analytic software and chatbots to robotics with the power to learn and adapt using artificial intelligence, natural language processing and machine learning. 

How will the Fourth Industrial Revolution affect business?

Fourth Industrial Revolution refers to “smart technology” and is connected to production systems designed, predict, and interact with the world to make real-time decisions that support production to selling products. Businesses have increased productivity, energy efficiency, and sustainability.

It also increases productivity by reducing downtime and maintenance costs.

Fourth Industrial Revolution an increase in production line availability by 5 to 15%. It can also give opportunities for energy saving and sustainability through optimisation.

The fourth industrial revolution brought artificial intelligence (AI), machine learning, virtual and augmented reality, 3D printing and the internet of things into reality, making entrepreneur life easier. Designer auto cars are a prime example of this new reality.

What should businesses do to future-proof their workforces?

Future-proof business is a kind of strategy that encourages sustainable models and plans to guarantee a company stays with the trend. It is important to know how to adapt, optimize, and plan for future events.

Customers care about the ethical sourcing of goods and a company’s efforts to combat climate change, and sustainable practices can also save your company energy and money in will help you to stay in the market business. 

Automation is kind of appealing because it can save money and increase efficiency. However, many jobs still need a human touch, no matter what technological advancement brings comes in future. Know where you can save on costs and where you can maximize a workforce’s skills to stay current with new trends.

4th Industrial revolution impact on businesses

Fourth Industrial Revolution has increased human productivity and self-aware products that are capable of sharing information about their health, location, usage level, storage conditions, and many more. The data these smart products share can help you improve everything from product quality and customer service to logistics and R&D.

With new technologies like AI and automation augmenting, doing business has become easier. New roles and responsibilities also lead to more companies employing specialist contractors or remote workers. Due to new technology and changing demands, businesses are becoming more supportive of existing employees wanting to work remotely or have flexibility.

In what ways are technologies driving change?

How Technology Drive Change

The easiest way to understand the Fourth Industrial Revolution is to focus on the technologies driving it. These include the following industries that were affected by the industrial revolution

1) Artificial Intelligence

AI ( Artificial Intelligence) describes computers that can “think” like humans. They can recognize complex ways, process information, draw conclusions, and make recommendations for you. AI is used in many ways, from spotting patterns in huge piles of unstructured data to powering the autocorrect suggestion on your smart devices.

2) Blockchain

Blockchain is a secure, decentralised, and transparent way of recording and sharing data, without relying on third-party involution. The digital currency Bitcoin is the best and most popular blockchain application. However, the technology can be used in other ways, including making supply chains traceable, securing sensitive data anonymously, and combating voter fraud.

3) Faster Computer Processing

New technologies are making computers smarter. They enable computers to process massive amounts of data faster than ever before, while the advent of the cloud has let businesses safely store and access their information from anywhere with internet access.

Quantum computing technologies now in development will eventually make computers millions of times more powerful and smarter. These computers will have the potential to supercharge Artificial intelligence, create highly complex data models in seconds, and speed up the discovery of new materials.

4) Virtual Reality and Augmented Reality

VR offers enveloping digital experiences (using a VR headset) that simulate the real world, while augmented reality (AR) also merges the digital and physical worlds comes in a great example of 4ir technologies.

5) Biotechnology

Biotechnology harnesses cellular and biomolecular methods to develop new technologies and products for various uses, including the development of new pharmaceuticals and materials, more efficient industrial manufacturing processes, and cleaner, more efficient energy sources. 

6) Robotics

Robotics refers to the design, creation, manufacture, and use of robots for personal and professional use. Today we see robot assistants in every home, technological advances have made robots increasingly complex and sophisticated. They are used in industries as wide-ranging as manufacturing, health and safety, and human assistance.

7) The Internet of Things

The IoT describes everyday products from medical wearables that monitor users’ physical condition to cars and tracking devices inserted into parcels connected to the internet and identifiable by other devices. Today businesses can collect customer data from constantly connected products, which lets them better gauge how customers use product marketing campaigns accordingly.

8) 3D printing

3D printing allows manufacturing businesses to print their parts with less tooling, at a lower cost, and faster than via traditional processes. Plus, designs can be customized to ensure a perfect fit according to need.

Summary 

The Fourth Industrial Revolution is both inclusive and human-centred. This revolution is about much more than just technology; it is an opportunity to unite global communities, build sustainable economies, adapt and modernise, reduce material and social inequalities, and commit to values-based leadership of emerging technologies.

Therefore, the Fourth Industrial Revolution is not a prediction of the future but a call to action which took place. It is a vision for developing, empowering, collaborative, and sustainable foundation for social and economic development, built around shared values of the common good, and human dignity. 

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