Globalization

Globalization (or globalisation) is the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture. Advances in transportation and telecommunications infrastructure, including the rise of the telegraph and its posterity the Internet, are major factors in globalization, generating further interdependence of economic and cultural activities.

Though scholars place the origins of globalization in modern times, others trace its history long before the European age of discovery and voyages to the New World. Some even trace the origins to the third millennium BCE. In the late 19th century and early 20th century, the connectedness of the world's economies and cultures grew very quickly.

The term globalization has been increasingly used since the mid-1980s and especially since the mid-1990s.[6] In 2000, the International Monetary Fund (IMF) identified four basic aspects of globalization: trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge. Further, environmental challenges such as climate change, cross-boundary water and air pollution, and over-fishing of the ocean are linked with globalization. Globalizing processes affect and are affected by business and work organization, economics, socio-cultural resources, and the natural environment.

Early modern

'Early modern-' or 'proto-globalization' covers a period of the history of globalization roughly spanning the years between 1600 and 1800. The concept of 'proto-globalization' was first introduced by historians A. G. Hopkins and Christopher Bayly. The term describes the phase of increasing trade links and cultural exchange that characterized the period immediately preceding the advent of high 'modern globalization' in the late 19th century. This phase of globalization was characterized by the rise of maritime European empires, in the 16th and 17th centuries, first the Portuguese and Spanish Empires, and later the Dutch and British Empires. In the 17th century, world trade developed further when chartered companies like the British East India Company (founded in 1600) and the Dutch East India Company (founded in 1602, often described as the first multinational corporation in which stock was offered) were established.

Early modern globalization is distinguished from modern globalization on the basis of expansionism, the method of managing global trade, and the level of information exchange. The period is marked by such trade arrangements as the East India Company, the shift of hegemony to Western Europe, the rise of larger-scale conflicts between powerful nations such as the Thirty Year War, and a rise of new commodities – most particularly slave trade. The Triangular Trade made it possible for Europe to take advantage of resources within the western hemisphere. The transfer of animal stocks, plant crops and epidemic diseases associated with Alfred Crosby's concept of The Columbian Exchange also played a central role in this process. Early modern trade and communications involved a vast group including European, Muslim, Indian, Southeast Asian and Chinese merchants, particularly in the Indian Ocean region.

19th century Great Britain was an early global superpower.

Modern

During the 19th century, globalization approached its modern form as a direct result of the industrial revolution. Industrialization allowed standardized production of household items using economies of scale while rapid population growth created sustained demand for commodities. Globalization in this period was decisively shaped by nineteenth-century imperialism. In the 19th century, steamships reduced the cost of international transport significantly and railroads made inland transport cheaper. The transport revolution occurred some time between 1820 and 1850.[9] More nations embraced international trade.[9] Globalization in this period was decisively shaped by nineteenth-century imperialism such as in Africa and Asia. The invention of shipping containers in 1956 helped advance the globalization of commerce.

After the Second World War, work by politicians led to the Bretton Woods conference, an agreement by major governments to lay down the framework for international monetary policy, commerce and finance, and the founding of several international institutions intended to facilitate economic growth multiple rounds of trade opening simplified and lowered trade barriers. Initially, the General Agreement on Tariffs and Trade (GATT), led to a series of agreements to remove trade restrictions. GATT's successor was the World Trade Organization (WTO), which provided a framework for negotiating and formalizing trade agreements and a dispute resolution process. Exports nearly doubled from 8.5% of total gross world product in 1970 to 16.2% in 2001. The approach of using global agreements to advance trade stumbled with the failure of the Doha round of trade negotiation. Many countries then shifted to bilateral or smaller multilateral agreements, such as the 2011 South Korea–United States Free Trade Agreement.

Since the 1970s, aviation has become increasingly affordable to middle classes in developed countries. Open skies policies and low-cost carriers have helped to bring competition to the market. In the 1990s, the growth of low-cost communication networks cut the cost of communicating between different countries. More work can be performed using a computer without regard to location. This included accounting, software development, and engineering design.

In the late 19th and early 20th century, the connectedness of the world's economies and cultures grew very quickly. This slowed down from the 1910s onward due to the World Wars and the Cold War but picked up again in the 1980s and 1990s. The revolutions of 1989 and subsequent liberalisation in many parts of the world resulted in a significant expansion of global interconnectedness. The migration and movement of people can also be highlighted as a prominent feature of the globalization process. In the period between 1965–90, the proportion of the labor force migrating approximately doubled. Most migration occurred between the developing countries and least developed countries (LDCs). The Internet has become influential in connecting people across the world. As of June 2012, more than 2.4 billion people—over a third of the world's human population—have used the services of the Internet.

Growth of globalization has never been smooth. One influential event was the late 2000s recession, which was associated with lower growth (such as cross-border phone calls and Skype usage) or even temporarily negative growth (such as trade) of global interconnectedness. The DHL Global Connectedness Index studies four main types of cross-border flow: trade (in both goods and services), information, people (including tourists, students and migrants) and capital. It shows that the depth of global integration fell by about one-tenth after 2008, but by 2013 had recovered well above its pre-crash peak.

Globalized society offers a complex web of forces and factors that bring people, cultures, markets, beliefs and practices into increasingly greater proximity to one another.

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