According to the standards developed by Ernst & Young and titled as the Globalization Index (“HK, Singapore: top 2 most globalized economies, 2010), cannot be viewed as a fully objective instrument for measuring the extent, to which a state has succeeded in the process of becoming globalized. Instead, the index measures the ability of a state to use its assets to excel in the global economy and deliver high scores in the specified field.
While economic progress is also a crucial part of becoming a globalized country, the index in question as a tool for measurement has several significant dents in it. Particularly, the fact that only twenty factors are taken into account when assessing a country’s potential to be called globalized deserves to be mentioned.
In other words, in order to replace Hong Kong and Singapore in their current status of the world’s top globalized states, the U.S. will have to consider the option of investing in the economy primarily. In other words, several essential areas of the state’s functioning, such as healthcare, education, etc., may be jeopardized for the sake of boosting the state’s economic growth rates. The specified step, therefore, will require that the United States jeopardize its sustainability and disrupt the delicate balance, which its key elements are currently in.
As a result of the unreasonable allocation of the state’s resources, the threat of having other areas, such as the above-mentioned healthcare, education, etc., malfunction, deserves to be brought up. Because of the lack of resources provided for the development of these fields and the consistent emphasis on the economic growth of the country, the state authorities are very likely to have the specified areas ruined within a relatively short amount of time.
In addition to the above-mentioned problem, the fact that the provision of financial incentives to the corresponding businesses will require tighter control over these organizations deserves to be brought up. There is no need to stress that financial fraud is part and parcel of reality (Cetina & Freda, 2012) and that fighting it is a challenging task. Apart from carrying out regular audits as the means to supervise the use of the financial resources provided, the state authorities will have to carry out close inspections of these companies’ operations.
The introduction of state governance, in its turn, may impede small and medium entrepreneurship. According to the existing evidence, organization leaders need to have enough freedom to manage their companies on a local level freely; otherwise, these companies may face an untimely and rapid demise, as state authorities are unlikely to know details about the firms’ functioning. Therefore, the decisions that state representatives make for such organizations, maybe not as sound as they should be (Victor, Hutts, & Thunder, 2014).
Therefore, though being an admittedly interesting tool for measuring the rates of globalization in a state, the GI can hardly be viewed as the approach that can be applied to the environment of any country. Herein the key problem with the objectivity of GI lies; while measuring the success of the state’s key companies’ performance rather accurately, it fails to deliver the data regarding the way in which the state authorities use its assets. In other words, to replace Singapore and Hong Kong, the United States will have to put the state economy at stake.
Reference List
Cetina, K. K., & Freda, A. (2012). The Oxford handbook of the sociology of finance. Oxford, UK: Oxford University Press
HK, Singapore: top 2 most globalised economies. (2010). CFO Innovation. Web.
Victor, D. J., Hutts, D. R., & Thunder, M. C. (2014). Oil and governance: State-owned enterprises and the world energy supply. Cambridge, UK: Cambridge University Press.