- Edexcel, IB
Last updated 22 Mar 2021
In the simplest terms globalisation is the greater integration of the world. This means that different countries, organisations, businesses have through the exchange of ideas, policies, cultures, and the interaction of economies become increasingly interconnected. Globalisation has been described as the “death of distance”.
Globalisation is not new - but its scale and scope has increased dramatically over the last 50 years.
Key Factors in Globalisation
- Freedom of Trade - organisations such as the World Trade Organisation (WTO) have helped to stimulate and promote trade between countries; part of this process has been the removing of trade barriers such as tariffs between countries. Regional trade agreements, such as NAFTA and the EU’s Common Market have also promoted free trade.
- Improved communication- from the latter part of the 20th century the ability to communicate internationally has improved dramatically. The growth of the Internet and mobile technology has meant that communication between different people and organisations in different countries is so much easier. This facilitates business and the broader sharing of ideas and culture.
- Improvements in transportation and travel- these improvements in the methods and means of transportation means that the cost of moving goods between countries has decreased significantly, and has increased the speed with which goods can be moved. Containerisation has been key.
In real terms it means that big companies are no longer just national companies but are international players in a world market. Brands such as Starbucks and McDonalds are internationally recognisable by their logos alone, even in countries that could be considered to be less well developed. Chinese companies such as Alibaba, and Indian companies such as Tata, have also contributed to globalisation.
Globalisation has meant a clear increase in the volume of international trade, and the opening of new trade routes, for example the “New Silk Road”. It has also resulted in the concept of the global economy, in which there is now a greater sense of economic interdependence.