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The Growth Of Globalisation

Updated on January 26, 2013

Globalisation explained by John Green

Globalisation

Globalisation is the increasing process by which people, their culture, money, goods and information can be transferred between countries with few or no barriers.

In general terms it is the growth of links and interdependence between countries.

Globalisation is not a new thing, the British Empire was a Global Trading Network.


Factors that have Accelerated Globalisation

There are several factors that have accelerated globalisation including:

  1. Improved Technology in Travel:

    - Planes
    - Shipping

  2. Improved Communications:

    - Internet
    - Cheaper Telephones

  3. Open trade

    - Financial Deregulation
    - Trade Blocs
    - TNC's

The Growth of Airtravel

Since 1903 when Wright brothers successfully flew for 852 feet in a glider plane, flight has been one way to transport people and sometimes goods. As planes have become more advanced globalisation has increased.

Planes have become more efficient; the first jetliner was the 747 De Havilland Comet, it could carry up to 100 passengers 5,000 km, this was in 1952. It was revolutionary, humans could now cross the Atlantic in under a day.
In the 1970s high bypass engines were invented, these allowed flights to work at all altitudes and again increased efficiency. Today crossing the Atlantic takes 5 hours, we can be anywhere within the globe in under a day.
This is commonly called "Global Shrinkage" the world has not become smaller, but our perception of the world has, instead of months and months to get around the globe, everywhere is within our reach.

Planes have also become larger, and air travel has become cheaper as economies of scale are possible, this means that more customers are available as the cost reduces.
There are now to types of flights available FSCs Full Services Carriers, this means the flight is all inclusive with food drink and entertainment in the price. In recent years (the first LCC was Southwest airlines which started flying in 1971) LCCs Low Cost Carriers these are no frills, budget or discount airlines, this means you pay simply for your seat. Any luggage space, choosing your seat, food etc you must pay on top for.
The growth of these budget airlines has further allowed more people to fly. It is not simply the reserve of the elite, but a competitive way to move around. In India Deccan air is a low cost air line which rivals the alternative of long distance trains. On the Dehli - Gwahati route 215 passengers a day use the airline to commute.

The final factor that has resulted in increasing air travel is the internet. With the ability to book flights from home in ten minutes flights have unsurprisingly increased dramatically. Business people can book flights and catch them on the same day and 'impulse holidays' have sprung up, on offers too good to resist. Internet booking now account for 55% of holiday flights booked.

How has this accelerated 'globalisation'?


With more people flying than ever before places become more interconnected. Foreign travel is no longer uncommon and people more abroad more, Spain is simply a few hours away. It has also increased the growth of TNCs as personnel can be moved quickly.

The Emma Maersk

The worlds biggest container ship capable of carrying up to 15,200 containers
The worlds biggest container ship capable of carrying up to 15,200 containers | Source

Containerisation

Containerisation is the high tech idea of putting goods in boxes. Before 1960 containers were unheard of, everything was either moved by hand which was time consuming or by crates and barrels which were heavy.

Containers were a revolution, because they are inter-modal (this means they are standardised and can be easily transferred from one form of transport to another e.g ship to lorry) they save time, transport became 20 times faster. Sea freight costs have reduced by 65% since 1930, and only 2% of the total price of the product is transport costs. Nowadays 90% of all goods are transported in containers.

How has this affected Globalisation?

This one technological advancement has changed the globe, products can now be shipped across to the U.K from China and still be cheaper than producing them in the U.K.

Improved Communications

The Internet

Internet communications has linked the globe. Email (1972) and video calls (Skype 2003) has connected the globe. People can now talk to anyone anywhere on the globe almost instantly for free. Video calls have not only linked families, but businesses and cultures.
It also has increased the movement of money around the world. Large amounts of capital can be transferred from one account in one place to another account in another place. On a small scale ebay allows us to buy goods from anywhere in the world at the click of a button.

Telephones

The reduced cost of telephones and invention of mobile telephones have again increased interconnectedness around the world. The cost of a phone call from London to Newyork is 99% cheaper than in 1930. Within the last 50 years phone calls to different countries had to be booked. People from all around the world are closely linked, this means your internet problem in Britain can be fixed by a worker in a call centre in Mumbai, where wages are cheaper.

How has this affected Globalisation?


Globalisation has increased as ideas can be transferred from one country to another instantly. People can constantly be in contact and jobs that previously needed face to face meetings can be done over video call.

Open Trade

Open trade is created through:

Financial deregulation:
this is the reduction of government control on the movement of money. This means money can be moved between countries freely without governmental blocks.

The Growth of Trade Blocs:
Trade blocs such as the E.U and NAFTA, are groups of countries that accept common policies on trade within the group and to countries outside the group.
In the E.U there are 27 member states with policies that aim to ensure free movement of: people, goods, services and capital between it's members. They do this by removing trade barriers such as removing import tariffs quotas and bans.

and

The Growth of TNCs:

Transnational corporations, trade in several countries. They recognise that while the origin country may have a small market or may be saturated, foreign markets offer custom. TNCs can produce products in one country and sell them in another, this created trade between countries.

How does this affect globalisation?

This increases the trade between countries allowing them to again become more interconnected.

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