Expression used to refer to the accelerated and intensified internationalization of production over the past few decades. The constituent elements of the process are: the removal of trade barriers as a result of the steep drop in transport and transaction costs in foreign trade and on the financial markets brought about by new transport and communication technologies; the internationalization of business activity and geographical separation of management functions; and the accelerated exchange of know-how and technologies.
Whereas at one time increased international involvement was mainly reflected in higher proportions of foreign trade, the modern-day globalization process is characterized by an abrupt rise in financial transactions, international direct investments and employment in foreign subsidiaries: between 1960 and 1985 the Austrian economy's export ratio rose from barely 25% to around 40% and since then has fluctuated on a mainly cyclical basis. Since the mid-1980s, annual direct investment abroad by Austrian manufacturing industry has increased by a factor of more than 21, mainly as a result of its activities in the transitional economies of eastern Europe. Employment and production in its foreign subsidiaries have also shown more dynamic growth than domestic manufacturing industry. Between 1990 and 1994, employment in foreign subsidiaries expanded by 57% per year, while at home it decreased annually by 2% (the corresponding figures for production were +31% and +5.2% per year).