Introduction - The concept of globalisation

Globalisation is the process by which ideas, knowledge, information, goods and services spread around the world. In business, the term is used in an economic context to describe integrated economies marked by free trade, the free flow of capital among countries and easy access to foreign resources, including labor markets, to maximise returns and benefit for the common good.

Globalisation, or globalisation as it is known in some parts of the world, is driven by the convergence of cultural and economic systems. This convergence promotes -- and in some cases necessitates -- increased interaction, integration and interdependence among nations. The more countries and regions of the world become intertwined politically, culturally and economically, the more globalised the world becomes.

How globalisation works

In a globalised economy, countries specialise in the products and services they have a competitive advantage in. This generally means what they can produce and provide most efficiently, with the least amount of resources, at a lower cost than competing nations. If all countries are specialising in what they do best, production should be more efficient worldwide, prices should be lower, economic growth widespread and all countries should benefit -- in theory.

Policies that promote free trade, open borders and international cooperation all drive economic globalisation. They enable businesses to access lower priced raw materials and parts, take advantage of lower cost labor markets and access larger and growing markets around the world in which to sell their goods and services.

Money, products, materials, information and people flow more swiftly across national boundaries today than ever. Advances in technology have enabled and accelerated this flow and the resulting international interactions and dependencies. These technological advances have been especially pronounced in transportation and telecommunications.

Driving forces behind globalisation

Among the recent technological changes that have played a role in globalisation are the following:

Internet and internet communication

• The internet has increased the sharing and flow of information and knowledge, access to ideas and exchange of culture among people of different countries. It has contributed to closing the digital divide between more and less advanced countries.

Communication technology

• The introduction of 4G and 5G technologies has dramatically increased the speed and responsiveness of mobile and wireless networks.

IoT and AI

• These technologies are enabling the tracking of assets in transit and as they move across borders, making cross-border product management more efficient.

Blockchain

• This technology is enabling the development of decentralised databases and storage that support the tracking of materials in the supply chain. Blockchain facilitates the secure access to data required in industries such as healthcare and banking. For example, blockchain provides a transparent ledger that centrally records and vets transactions in a way that prevents corruption and breaches.

Transportation

• Advances in air and fast rail technology have facilitated the movement of people and products. And changes in shipping logistics technology moves raw materials, parts and finished products around the globe more efficiently.

Manufacturing

• Advances such as automation and 3D printing have reduced geographic constraints in the manufacturing industry. 3D printing enables digital designs to be sent anywhere and physically printed, making distributed, smaller-scale production near the point of consumption easier. Automation speeds up processes and supply chains, giving workforces more flexibility and improving output.

Generative Questions

1. How do the benefits of globalisation compare to the detriments? How do these implications differ for each country

2. How far should the relationship between countries influence global or national decision making?

3. How has globalisation affected the relationship between countries?

4. Should globalisation be limited or regulated in any way?

5. Is globalisation here to stay?

The Impact & Influence of Globalisation

Here are some other videos that give you overviews and introductions to the concept of globalisation

3 types of globalisation