Sei sulla pagina 1di 20

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

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.
In 2000, the International Monetary Fund (IMF)
identified four basic aspects of
globalization: trade and transactions, capital and investmentmovements, migration a
nd movement of people, and the dissemination of knowledge.
environmental challenges such as climate change, cross-boundary water andair
pollution, and over-fishing of the ocean are linked with globalization.
processes affect and are affected
bybusiness and work organization, economics, socio-cultural resources, and
the natural environment.

Extent of the Silk Road and Spice traderoutes owned by the Ottoman Empire in 1453 spurring
Humans have interacted over long distances for thousands of years. The
overland Silk Road that connected Asia, Africa, and Europe is a good example of
the transformative power of translocal exchange that existed in the "Old World".
Philosophy, religion, language, the arts, and other aspects of culture spread and
mixed as nations exchanged products and ideas. In the 15th and 16th centuries,
Europeans made important discoveries in their exploration of the oceans, including
the start of transatlantic travel to the "New World" of theAmericas. Global movement
of people, goods, and ideas expanded significantly in the following centuries. Early
in the 19th century, the development of new forms of transportation (such as
the steamship andrailroads) and telecommunications that "compressed" time and
space allowed for increasingly rapid rates of global interchange.
In the 20th
century, road vehicles, intermodal transport, and airlines made transportation even
faster. The advent of electronic communications, most notably mobile
phones and the Internet, connected billions of people in new ways by the year 2010.

Eastern Telegraph Company 1901 chart of undersea telegraph cabling, an example of modern
globalizing technology in the beginning of the 20th century.

Airline personnel from the "Jet set" age, circa 1960.
Etymology and usage[edit]
The term globalization is derived from the word globalize, which refers to the
emergence of an international network of economic systems.
One of the earliest
known usages of the term as a noun was in a 1930 publication entitled, Towards
New Education, where it denoted a holistic view of human experience in
A related term, corporate giants, was coined byCharles Taze Russell in
to refer to the largely national trusts and other large enterprises of the time.
By the 1960s, both terms began to be used as synonyms by economists and other
social scientists. EconomistTheodore Levitt is widely credited with coining the term
in an article entitled "Globalization of Markets", which appeared in the MayJune
1983 issue ofHarvard Business Review. However, the term 'globalization' was in use
well before (at least as early as 1944) and had been used by other scholars as early
as 1981.
Levitt can be credited with popularizing the term and bringing it into the
mainstream business audience in the later half of the 1980s. Since its inception, the
concept of globalization has inspired competing definitions and interpretations, with
antecedents dating back to the great movements of trade and empire across Asia
and the Indian Ocean from the 15th century onwards.
Due to the complexity of
the concept, research projects, articles, and discussions often remain focused on a
single aspect of globalization.

Roland Robertson, professor of sociology at University of Aberdeen, an early writer
in the field, defined globalization in 1992 as:
...the compression of the world and the intensification of the consciousness of the
world as a whole.

Sociologists Martin Albrow and Elizabeth King define globalization as:
...all those processes by which the peoples of the world are incorporated into a
single world society.

In The Consequences of Modernity, Anthony Giddens uses the following definition:
Globalization can thus be defined as the intensification of worldwide social relations
which link distant localities in such a way that local happenings are shaped by
events occurring many miles away and vice versa.

In Global Transformations David Held, et al., study the definition of globalization:
Although in its simplistic sense globalization refers to the widening, deepening and
speeding up of global interconnection, such a definition begs further elaboration. ...
Globalization can be located on a continuum with the local, national and regional. At
one end of the continuum lie social and economic relations and networks which are
organized on a local and/or national basis; at the other end lie social and economic
relations and networks which crystallize on the wider scale of regional and global
interactions. Globalization can refer to those spatial-temporal processes of change
which underpin a transformation in the organization of human affairs by linking
together and expanding human activity across regions and continents. Without
reference to such expansive spatial connections, there can be no clear or coherent
formulation of this term. ... A satisfactory definition of globalization must capture
each of these elements: extensity (stretching), intensity, velocity and impact.

Swedish journalist Thomas Larsson, in his book The Race to the Top: The Real
Story of Globalization, states that globalization:
is the process of world shrinkage, of distances getting shorter, things moving closer.
It pertains to the increasing ease with which somebody on one side of the world can
interact, to mutual benefit, with somebody on the other side of the world.

The journalist Thomas L. Friedman popularized the term "flat world", arguing
that globalized trade, outsourcing, supply-chaining, and political forces had
permanently changed the world, for better and worse. He asserted that the pace of
globalization was quickening and that its impact on business organization and
practice would continue to grow.

Economist Takis Fotopoulos defined "economic globalization" as the opening and
deregulation of commodity, capital and labor markets that led toward
present neoliberal globalization. He used "political globalization" to refer to the
emergence of a transnational elite and a phasing out of the nation-state. "Cultural
globalization", he used to reference the worldwide homogenization of culture. Other
of his usages included "ideological globalization", "technological globalization" and

Manfred Steger, professor of Global Studies and research leader in the Global Cities
Institute at RMIT University, identifies four main empirical dimensions of
globalization: economic, political, cultural, and ecological, with a fifth dimension - the
ideological - cutting across the other four. The ideological dimension, according to
Steger, is filled with a range of norms, claims, beliefs, and narratives about the
phenomenon itself.

In 2000, the International Monetary Fund (IMF) identified four basic aspects of
globalization: trade and transactions, capitaland investment movements, migration a
nd movement of people and the dissemination of knowledge.
With regards to trade
and transactions, developing countries increased their share of world trade, from 19
percent in 1971 to 29 percent in 1999. However, there is great variation among the
major regions. For instance, the newly industrialized economies (NIEs) of Asia
prospered, while African countries as a whole performed poorly. The makeup of a
country's exports is an important indicator for success. Manufactured goods exports
soared, dominated by developed countries and NIEs. Commodity exports, such as
food and raw materials were often produced by developing countries: commodities'
share of total exports declined over the period.
Following from this, capital and investment movements can be highlighted as
another basic aspect of globalization. Private capital flows to developing countries
soared during the 1990s, replacing "aid" or "development assistance" which fell
significantly after the early 1980s. Foreign Direct Investment (FDI) became the most
important category. Both portfolio investment and bank credit rose but they have
been more volatile, falling sharply in the wake of the financial crisis of the late 1990s.
The migration and movement of people can also be highlighted as a prominent
feature of the globalization process. In the period between 196590, the proportion
of the labor forces migrating approximately doubled. Most migration occurred
between developing countries and Least Developed Countries (LDCs).

Paul James, Director of the United Nations Global Compact Cities Programme,
argues that four different forms of globalization can also be distinguished that
complement and cut across the solely empirical dimensions.
According to James,
the oldest dominant form of globalization is embodied globalization, the movement
of people. A second form is agency-extended globalization, the circulation of agents
of different institutions, organizations, and polities, including imperialagents. Object-
extended globalization, a third form, is the movement of commodities and other
objects of exchange. The transmission of ideas, images, knowledge and information
across world-space he calls disembodied globalization, maintaining that it is
currently the dominant form of globalization. James holds that this series of
distinctions allows for an understanding of how, today, the most embodied forms of
globalization such as the movement of refugees and migrants are increasingly
restricted, while the most disembodied forms such as the circulation of financial
instruments and codes are the most deregulated.

Main article: History of globalization
See also: Timeline of international trade
There are both distal and proximate causes which can be traced in the historical
factors affecting globalization. Large-scale globalization began in the 19th century.


Animated map showing the development of colonial empires from 1492 to present.
Main article: Archaic globalization
Archaic globalization is seen as a phase in the history of globalization conventionally
referring to globalizing events and developments from the time of the earliest
civilizations until roughly the 1600s. This term is used to describe the relationships
between communities and states and how they were created by the geographical
spread of ideas and social norms at both local and regional levels.

In this schema, three main prerequisites are posited for globalization to occur. The
first is the idea of Eastern Origins, which shows how Western states have adapted
and implemented learned principals from the East.
Without the traditional ideas
from the East, Western globalization would not have emerged the way it did. The
second is distance. The interactions amongst states were not on a global scale and
most often were confined to Asia, North Africa, the Middle East and certain parts of
With early globalization it was difficult for states to interact with others
that were not within close proximity. Eventually, technological advances allowed
states to learn of others existence and another phase of globalization was able to
occur. The third has to do with interdependency, stability and regularity. If a state is
not depended on another then there is no way for them to be mutually affected by
one another. This is one of the driving forces behind global connections and trade;
without either globalization would not have emerged the way it did and states would
still be dependent on their own production and resources to function. This is one of
the arguments surrounding the idea of early globalization. It is argued that archaic
globalization did not function in a similar manner to modern globalization because
states were not as interdependent on others as they are today.

Also posited is a 'multi-polar' nature to archaic globalization, which involved the
active participation of non-Europeans. Because it predated the Great Divergence of
the nineteenth century, in which Western Europe pulled ahead of the rest of the
world in terms of industrial production and economic output, archaic globalization
was a phenomenon that was driven not only by Europe but also by other
economically developed Old World centers such as Gujurat, Bengal, coastal China

Portuguese carrack in Nagasaki, 17th-century Japanese Nanban art
The German historical economist and sociologist Andre Gunder Frank argues that a
form of globalization began with the rise of trade links between Sumer and the Indus
Valley Civilization in the third millennium B.C.E. This archaic globalization existed
during the Hellenistic Age, when commercialized urban centers enveloped the axis
ofGreek culture that reached from India to Spain, including Alexandria and the
otherAlexandrine cities. Early on, the geographic position of Greece and the
necessity ofimporting wheat forced the Greeks to engage in maritime trade. Trade in
ancient Greece was largely unrestricted: the state controlled only the supply of

Native New World crops exchanged globally: Maize, tomato, potato, vanilla, rubber, cacao, tobacco
Early modern[edit]
Main article: Proto-globalization
'Early modern-' or 'proto-globalization' covers a period of the history of
globalizationroughly 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.
Main article: History of globalization
During the 19th century, globalization approached its modern form as a result of
theindustrial 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
More nations embraced international trade.
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

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
created an institution to manage the trading system. 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 KoreaUnited States Free Trade
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 century 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 has picked up again
sinceneoliberal policies began in the 1980s and perestroika and the Chinese
economic reforms of Deng Xiaoping opened the old Eastern Bloc to western
In the early 2000s, much of the industrialized world entered into
the Great Recession,
which may have slowed the process, at least

Trade and globalization have evolved tremendously today. 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.

Global business organization[edit]
Main article: International business

Global Competitiveness Index(20082009): competitiveness is an important determinant for the well-
being of nation-states in an international environment
With improvements in transportation and communication, international business
grew rapidly after the beginning of the 20th century. International business includes
all commercial transactions (private sales, investments, logistics, and transportation)
that take place between two or more regions, countries and nations beyond their
political boundaries. Such international diversification is tied with firm performance
and innovation, positively in the case of the former and often negatively in the case
of the latter.
Usually, private companies undertake
such transactions for profit.
These business transactions involve economic
resources such as capital, naturaland human resources used for international
production of physical goods and services such
as finance, banking, insurance, construction and other productiveactivities.

International business arrangements have led to the formation of multinational
enterprises (MNE), companies that have a worldwide approach to markets and
production or one with operations in more than one country. A MNE may also be
called a multinational corporation (MNC) or transnational company (TNC). Well
known MNCs include fast food companies such asMcDonald's and Yum Brands,
vehicle manufacturers such as General Motors, Ford Motor Company and Toyota,
consumer electronics companies like Samsung, LG and Sony, and energy
companies such as ExxonMobil, Shell and BP. Most of the largest corporations
operate in multiple national markets.
Businesses generally argue that survival in the new global marketplace requires
companies to source goods, services, laborand materials overseas to continuously
upgrade their products and technology in order to survive increased
According to a recent McKinsey Global Institute report, flows of
goods, services, and finance reached $26 trillion in 2012, or 36 percent of global
GDP, 1.5 times the level in 1990.

International trade[edit]
Main article: International trade

Singapore, the top country in theEnabling Trade Index, embraced globalization and became a highly
developed country
International trade is the exchange of capital, goods,
and services acrossinternational borders or territories.
In most countries, such
trade represents a significant share of gross domestic
product (GDP). Industrialization, advancedtransportation, multinational
corporations, offshoring and outsourcing all have a major impact on world trade. The
growth of international trade is a fundamental component of globalization.
An absolute trade advantage exists when countries can produce a commodity with
less costs per unit produced than could its trading partner. By the same reasoning, it
should import commodities in which it has an absolute disadvantage.
While there
are possible gains from trade with absolute advantage, comparative advantage
that is, the ability to offer goods and services at a lower marginal and opportunity
cost extends the range of possible mutually beneficial exchanges. In a globalized
business environment, companies argue that the comparative advantages offered
by international trade have become essential to remaining competitive.
Trade agreements, economic blocs and special trade zones[edit]

Gross domestic product in 2011 US dollars per capita, adjusted for inflation and purchasing power
parity (log scale) from 1860 to 2011, with population (disk area) for the US (yellow), UK (orange),
Japan (red), China (red), and India (blue).

Establishment of free trade areas has become an essential feature of modern
governments to handle preferential trading arrangements with foreign and
multinational entities.

A Special Economic Zone (SEZ) is a geographical region that has economic and
other laws that are more free-market-oriented than a country's typical or national
laws. "Nationwide" laws may be suspended inside these special zones. The
category 'SEZ' covers many areas, including Free Trade Zones (FTZ), Export
Processing Zones (EPZ),Free Zones (FZ), Industrial parks or Industrial Estates
(IE), Free Ports, Urban Enterprise Zones and others. Usually the goal of a structure
is to increase foreign direct investment by foreign investors, typically aninternational
business or a multinational corporation (MNC). These are designated areas in which
companies are taxed very lightly or not at all in order to encourage economic
activity. Free ports have historically been endowed with favorable customs
regulations, e.g., the free port ofTrieste. Very often free ports constitute a part of free
economic zones.
A FTZ is an area within which goods may be landed, handled, manufactured or
reconfigured, and reexported without the intervention of the customs authorities.
Only when the goods are moved to consumers within the country in which the zone
is located do they become subject to the prevailing customs duties. Free trade
zones are organized around major seaports, international airports, and national
frontiers areas with many geographic advantages for trade.
It is a region where
a group of countries has agreed to reduce or eliminate trade barriers.

A Billboard in Jakarta welcoming ASEAN Summit 2011 delegates.
A free trade area is a trade bloc whose member countries have signed a free-trade
agreement, which eliminates tariffs, import quotas, and preferences on most (if not
all)goods and services traded between them. If people are also free to move
between the countries, in addition to a free-trade area, it would also be considered
an open border. TheEuropean Union, for example, a confederation of 27 member
states, provides both a free trade area and an open border.
Qualifying Industrial Zones (QIZ) are industrial parks that house manufacturing
operations inJordan and Egypt. They are a special free trade zones established in
collaboration with neighboring Israel to take advantage of the free trade agreements
between the United States and Israel. Under the trade agreements with Jordan as
laid down by the United States, goods produced in QIZ-notified areas can directly
access US markets without tariff orquota restrictions, subject to certain conditions.
To qualify, goods produced in these zones must contain a small portion of Israeli
input. In addition, a minimum 35% value to the goods must be added to the finished
product. The brainchild of Jordanian businessman Omar Salah, the first QIZ was
authorized by the United States Congress in 1997.
The Asia-Pacific has been described as "the most integrated trading region on the
planet" because its intra-regional trade accounts probably for as much as 50-60% of
the region's total imports and exports.
It has also extra-regional trade: consumer
goods exports such as televisions, radios, bicycles, and textiles into the United
States, Europe, and Japan fueled the economic expansion.

The ASEAN Free Trade Area
is a trade bloc agreement by the Association of
Southeast Asian Nations supporting local manufacturing in all ASEAN countries.
The AFTA agreement was signed on 28 January 1992 in Singapore. When the
AFTA agreement was originally signed, ASEAN had six members,
namely, Brunei, Indonesia, Malaysia, Philippines, Singapore andThailand. Vietnam j
oined in 1995, Laos and Myanmar in 1997 and Cambodia in 1999.
Tax havens[edit]

The ratio of German assets in tax havens in relation to the total German GDP.
The "Big 7" shown
are Hong Kong, Ireland, Lebanon, Liberia, Panama, Singapore, and Switzerland.
Main article: Tax haven
A tax haven is a state, country or territory where certain taxes are levied at a low
rate or not at all, which are used by businesses for tax avoidance and tax
Individuals and/or corporate entities can find it attractive to establishshell
subsidiaries or move themselves to areas with reduced or nil taxation levels. This
creates a situation of tax competition among governments. Differentjurisdictions tend
to be havens for different types of taxes and for different categories of people and
The central feature of a tax haven is that its laws and other measures
can be used to evade or avoid the tax laws or regulations of other jurisdictions.
2012 report from the Tax Justice Network estimated that between USD $21 trillion
and $32 trillion is sheltered from taxes in unreported tax havens worldwide.

Tax havens have been criticized because they often result in the accumulation of
idle cash
that is expensive and inefficient for companies to repatriate.
The tax
shelter benefits result in a tax incidence disadvantaging the poor.
Many tax
havens are thought to have connections to "fraud, money laundering and
While investigations of illegal tax haven abuse have been ongoing,
there have been few convictions.

International tourism[edit]
Main article: Tourism
Tourism is travel for recreational, leisure or business purposes. The World Tourism
Organization defines tourists as people "traveling to and staying in places outside
their usual environment for not more than one consecutive year for leisure, business
and other purposes".
There are many forms of tourism such as agritourism, birth
tourism, culinary tourism,cultural tourism, eco-tourism, extreme
tourism, geotourism, heritage tourism, LGBT tourism, medical tourism, nautical
tourism, pop-culture tourism, religious tourism, slum tourism, war tourism,
and wildlife tourism.
Globalization has made tourism a popular global leisure activity. The World Health
Organization (WHO) estimates that up to 500,000 people are in flight at any one

Modern aviation has made it possible to travel long distances quickly.
As a result of the late-2000s recession, international travel demand suffered a strong
slowdown from the second half of 2008 through the end of 2009. After a 5%
increase in the first half of 2008, growth in international tourist arrivals moved into
negative territory in the second half of 2008, and ended up only 2% for the year,
compared to a 7% increase in 2007.
This negative trend intensified during 2009,
exacerbated in some countries due to the outbreak of the H1N1 influenza virus,
resulting in a worldwide decline of 4.2% in 2009 to 880 million international tourists
arrivals, and a 5.7% decline in international tourism receipts.
One notable
exception to more free travel is travel from the United States to bordering
countriesCanada and Mexico, which had been semi-open borders. Now, by US law,
travel to these countries requires a passport.

In 2010, international tourism reached US$919B, growing 6.5% over 2009,
corresponding to an increase in real terms of 4.7%.
In 2010, there were over 940
million international tourist arrivals worldwide.

International sports[edit]

Wheelchair basketball teams playing in the 2008 Summer Paralympics
Main articles: Olympic Games and List of world championships
Modern international sports events can be big business for as well as influencing the
political, economical, and other cultural aspects of countries around the world.
Especially with politics and sports, sports can affect countries, their identities, and in
consequence, the world.
The ancient Olympic Games were a series of competitions held between
representatives of several city-states and kingdoms from Ancient Greece, which
featured mainly athletic but also combat and chariot racing events. During the
Olympic games all struggles against the participating city-states were postponed
until the games were finished.
The origin of these Olympics is shrouded in
mystery and legend.
During the 19th century Olympic Games became a popular
global event.
While some economists are skeptical about the economic benefits of hosting the
Olympic Games, emphasizing that such "mega-events" often have large costs,
hosting (or even bidding for) the Olympics appears to increase the host country's
exports, as the host or candidate country sends a signal about trade openness when
bidding to host the Games.
Moreover, research suggests that hosting the Summer
Olympics has a strong positive effect on the philanthropic contributions of
corporations headquartered in the host city, which seems to benefit the local
nonprofit sector. This positive effect begins in the years leading up to the Games
and might persist for several years afterwards, although not permanently. This
finding suggests that hosting the Olympics might create opportunities for cities to
influence local corporations in ways that benefit the local nonprofit sector and civil
The Games have also had significant negative effects on host
communities; for example, the Centre on Housing Rights and Evictions reports that
the Olympics displaced more than two million people over two decades, often
disproportionately affecting disadvantaged groups.

Globalization has continually increased international competition in sports. The FIFA
World Cup, for example, is the world's most widely viewed sporting event; an
estimated 700 million people watched the final match of the 2010 FIFA World
Cupheld in South Africa.

According to a 2011 A.T. Kearney study of sports teams, leagues and federations,
the global sports industry is woArth between 350 billion and 450 billion (US$480-
$620 billion).
This includes infrastructure construction, sporting goods, licensed
products and live sports events.