What is globalization?What is globalization?

The free flow of goods, people, ideas, The free flow of goods, people, ideas, culture across international culture across international boundaries.boundaries.

Example:Example:A Vizio flat panel TV is:A Vizio flat panel TV is: designed in a small office in Californiadesigned in a small office in California assembled in Mexicoassembled in Mexico FromFrom

panels made in South Koreapanels made in South Korea electronic components made in Chinaelectronic components made in China microprocessors made in the U.S.microprocessors made in the U.S.

Thinking about the Vizio example on the last slide, come up with another item we buy and how it represents globalization.

YES, you can use your phones to access the internet for this.

Think of an item – Beats by Dre, for instance – and find out where the company is located that makes them and the factory is where they are made.

You can do this for any item!

We will share out after a few minutes.

One way to approach this: think about the world before globalization

• Distance mattered—space often measured in time

• Territorial boundaries more or less kept things in and out

• Society and culture had spatial referents

• Everything had its “place” (literally)

In a world experiencing Globalization:

•Distance becomes almost irrelevant (the end of distance)

•Boundaries are increasingly permeable.

•Groups and cultures increasingly don’t have a territorial basis

•A new kind of non-physical “place” is emerging (i.e. the Internet) where boundaries do not matter

Early GlobalizationEarly Globalization

The spread of religion / British Empire

Think about the world prior to the year 1900. What is a way globalization could have been achieved?

Write down your idea and how you think it impacted globalization.

If you need to use your phone for research you can.

We will share out in a few minutes.

Key Elements: THENKey Elements: THEN

Think about the world today. What is a way globalization is currently being achieved?

Write down your idea and how you think it impacts globalization.

If you need to use your phone for research you can.

We will share out in a few minutes.

Key Elements--NOWKey Elements--NOW

What are the Components? What are the Components? 1.1.

Broad Category: Broad Category: TechnologyTechnology Instant, cheap Worldwide Instant, cheap Worldwide

Communications—cell phone, Communications—cell phone, www(availability at the www(availability at the individual individual level)level)

International (instant)financial and International (instant)financial and capital transferscapital transfers

Increased scale and frequency of air Increased scale and frequency of air transporttransport

Container shipsContainer ships

Globalization of markets Globalization of markets

In the past, each country had In the past, each country had its own companiesits own companies in many in many industries and its own productsindustries and its own products I never saw Japanese media (and I saw I never saw Japanese media (and I saw

little non-US media) in collegelittle non-US media) in college

Today everyone knows…Today everyone knows…

Nintendo (Japanese)Nintendo (Japanese) Nestle (Switzerland)Nestle (Switzerland) Red Bull (Thailand)Red Bull (Thailand) Ikea (Swedish)Ikea (Swedish) McDonald’s (American)McDonald’s (American) Samsung (South Korea)Samsung (South Korea)

Multi-National Corporations – Having Multi-National Corporations – Having operations in more than one country.operations in more than one country.

Drivers of GlobalizationDrivers of GlobalizationDrivers of GlobalizationDrivers of Globalization

Two factors underlie Two factors underlie globalizationglobalization– ““Decline in barriersDecline in barriers to the free flow of to the free flow of

goods, services, and capitalgoods, services, and capital”” that has that has occurred since the end of World War IIoccurred since the end of World War II

– Technological changeTechnological change

Two factors underlie Two factors underlie globalizationglobalization– ““Decline in barriersDecline in barriers to the free flow of to the free flow of

goods, services, and capitalgoods, services, and capital”” that has that has occurred since the end of World War IIoccurred since the end of World War II

– Technological changeTechnological change

Declining Trade and Declining Trade and Investment BarriersInvestment BarriersDeclining Trade and Declining Trade and Investment BarriersInvestment Barriers

During the 1920s and ‘30s – in During the 1920s and ‘30s – in response to World War 1 -- many response to World War 1 -- many nations erected formidable barriers nations erected formidable barriers to to international trade..

Advanced industrial nations of the Advanced industrial nations of the West committed themselves after West committed themselves after World War II to World War II to removing barriersremoving barriers to the free flow of goods, services, to the free flow of goods, services, and capital between nationsand capital between nations..

During the 1920s and ‘30s – in During the 1920s and ‘30s – in response to World War 1 -- many response to World War 1 -- many nations erected formidable barriers nations erected formidable barriers to to international trade..

Advanced industrial nations of the Advanced industrial nations of the West committed themselves after West committed themselves after World War II to World War II to removing barriersremoving barriers to the free flow of goods, services, to the free flow of goods, services, and capital between nationsand capital between nations..

Average Tariff Rates on Average Tariff Rates on Manufactured ProductsManufactured ProductsAverage Tariff Rates on Average Tariff Rates on Manufactured ProductsManufactured Products

1913 1950 1990 2002

France 21 % 18 % 5.9 % 4.0 %

Germany

20 % 26 % 5.9 % 4.0 %

Italy 18 % 25 % 5.9 % 4.0 %

Japan 30 % -- 5.3 % 3.8 %

Holland 5 % 1 % 5.9 % 4.0 %

Sweden 20 % 9 % 4.4 % 4.0 %

UK -- 4% 5.9 % 4.0 %

US 44 % 14 % 4.8 % 4.0 %

Affects of Lowering Affects of Lowering Trade BarriersTrade Barriers

Affects of Lowering Affects of Lowering Trade BarriersTrade Barriers

The Role of TechnologyThe Role of Technology

Lowering of trade barriers made Lowering of trade barriers made globalization possible;globalization possible;

TechnologyTechnology has made it a has made it a transforming movementtransforming movement

Internet Usage GrowthInternet Usage GrowthInternet Usage GrowthInternet Usage Growth

Globalization: The trends of Globalization: The trends of the last 10,000 yearsthe last 10,000 years

People lived for 250,000 years in People lived for 250,000 years in hunter-gatherer bandshunter-gatherer bands

Rise of agriculture Rise of agriculture 10,000 years ago led 10,000 years ago led to rise of empires and nation-statesto rise of empires and nation-states

Science and ‘enlightenment’ after 1680 Science and ‘enlightenment’ after 1680 produced produced global trade and empiresglobal trade and empires

Free trade and tech after 1980 Free trade and tech after 1980 produced produced globalizationglobalization

InformationInformation

Broad Category: Broad Category: InformationInformation Instant dispersal of news by satellite Instant dispersal of news by satellite

TV, www, fax (but what news and TV, www, fax (but what news and whose?)whose?)

Competition is worldwide, not local or Competition is worldwide, not local or nationalnational

Very hard to keep a secretVery hard to keep a secret

CultureCulture

Broad Category: Broad Category: CultureCulture Increasingly a “global village,” but a Increasingly a “global village,” but a

WesternWestern one watching the same TV, music one watching the same TV, music videos, news, soaps. Reaction to this?videos, news, soaps. Reaction to this?

Rise of a “global language.” Rise of a “global language.” Why? Whose?Why? Whose? Smaller cultures may feel threatened Smaller cultures may feel threatened Cultures in Africa in danger – over 1000 Cultures in Africa in danger – over 1000

cultures and languages, by 2050 less than cultures and languages, by 2050 less than 100 will still exist.100 will still exist.

Environment & HealthEnvironment & Health

Broad Category: Broad Category: Environment Environment and Healthand Health

Global environmental problems Global environmental problems (Ozone, global “warming,” sea-level (Ozone, global “warming,” sea-level changechange

AIDS, Ebola, ??AIDS, Ebola, ?? Global plunder of common pool Global plunder of common pool

resources—ocean, forests…..resources—ocean, forests…..

Crime & TerrorismCrime & Terrorism

Broad Category: Broad Category: Crime and Crime and TerrorismTerrorism

““International” crime, Russian MafiaInternational” crime, Russian Mafia Terrorists in caves in Afghanistan Terrorists in caves in Afghanistan

threaten lower Manhattanthreaten lower Manhattan International crime does not play by International crime does not play by

the rules of “states,” and may be the rules of “states,” and may be better organized than some, and better organized than some, and “own” others.“own” others.

Immigration IssuesImmigration Issues

A global population?A global population? The rich countries remain rich, and a The rich countries remain rich, and a

declining proportion of world declining proportion of world populationpopulation

The poor countries remain poor, and a The poor countries remain poor, and a rapidly expanding part of the worlds rapidly expanding part of the worlds population (95% of the growth)population (95% of the growth)

Hence the pressure to move to the rich Hence the pressure to move to the rich countries, legally or illegallycountries, legally or illegally

The Information RevolutionThe Information Revolution

The InternetThe Internet The WWWThe WWW Instant Dispersal of News & InformationInstant Dispersal of News & Information The Rise of a Global Media Village?The Rise of a Global Media Village? The Personalization of communications: The Personalization of communications:

the cell/mobile phone system, and its the cell/mobile phone system, and its increasing capacity.increasing capacity.

Twitter, facebook, snapchat, skypeTwitter, facebook, snapchat, skype

Information: Downside?Information: Downside?

But, what information is becoming But, what information is becoming global? But whose news is becoming global? But whose news is becoming global?global?

What is this doing to cultures and What is this doing to cultures and communities?communities?

Does Globalization = Westernization Does Globalization = Westernization =Americanization? Does it matter?=Americanization? Does it matter?

Are we evolving a global language? Are we evolving a global language? What are the consequences of this? What are the consequences of this?

Is This Globalization?Is This Globalization?

Who Manages Who Manages Globalization?Globalization?

There is no world government, so who There is no world government, so who regulates and controls the process? regulates and controls the process? Mostly UN agencies, but they require Mostly UN agencies, but they require the compliance of all member states, the compliance of all member states, and the UN does not make and the UN does not make lawlaw..

Do states ever put the global priority Do states ever put the global priority ahead of their own? Plus, we have rich, ahead of their own? Plus, we have rich, strong states, and poor weak ones.strong states, and poor weak ones.

The “Real” World and the The “Real” World and the “Political” World“Political” World

This

Or

This-----------

The big difference is, of course, that the one on the left will still be going in 2 billion years; the one on the right, well,

don’t put money on it.

Globalization—The Globalization—The Really Really Scary Scary PartPart

Part 1—the Good Old DaysPart 1—the Good Old Days

Plague Famine

Globalization—The Globalization—The Really Really Scary Scary PartPart

Part 2—TodayPart 2—TodayAIDS

SARS

EBOLA

?

Melting Ice Sheets, Flooded Coasts, Global Warming?

Terrorism

Scarier StillScarier Still

We have global crime—financial, We have global crime—financial, drug-related etc., perhaps the largest drug-related etc., perhaps the largest single element in international tradesingle element in international trade

A Man in a cave in Afghanistan can A Man in a cave in Afghanistan can kill 3000 people in lower Manhattankill 3000 people in lower Manhattan

International crime does not play by International crime does not play by the rules of states—or anyone else—the rules of states—or anyone else—and may be better-equipped.and may be better-equipped.

The Emergence The Emergence of Global Institutionsof Global Institutions

Notable global institutions includeNotable global institutions include thethe World Trade Organization (WTO) World Trade Organization (WTO) which which

is responsible for policing the world trading is responsible for policing the world trading system and ensuring that nations adhere system and ensuring that nations adhere to the rules established in WTO treatiesto the rules established in WTO treaties In 2008, 151 nations accounting for 97% of In 2008, 151 nations accounting for 97% of

world trade were members of the WTOworld trade were members of the WTO the the International Monetary Fund (IMF) International Monetary Fund (IMF)

which maintains order in the international which maintains order in the international monetary systemmonetary system

The Emergence The Emergence of Global Institutionsof Global Institutions

the the World BankWorld Bank which promotes economic which promotes economic development development

the the United Nations (UN)United Nations (UN) which maintains which maintains international peace and security, develops international peace and security, develops friendly relations among nations, cooperates friendly relations among nations, cooperates in solving international problems and in solving international problems and promotes respect for human rights, and is a promotes respect for human rights, and is a center for harmonizing the actions of nationscenter for harmonizing the actions of nations

* * GDPGDP – Overall production capacity (wealth) of an – Overall production capacity (wealth) of an entire nation.entire nation.* * Per capita GDP Per capita GDP – The average production – The average production capacity (wealth) of an individual citizen within a capacity (wealth) of an individual citizen within a country.country.

The Changing Roles of CountriesThe Changing Roles of Countriesinin

the Global Economy the Global EconomyIn the 1960s: In the 1960s: The U.S. dominated the world economy The U.S. dominated the world economy

and the world trade pictureand the world trade picture U.S. multinationals dominated the U.S. multinationals dominated the

international business scene international business scene About half the world-- the centrally About half the world-- the centrally

planned economies of the communist planned economies of the communist world-- was off limits to Western world-- was off limits to Western international businessinternational business

Today, much of this has changed.Today, much of this has changed.

The Changing World Output The Changing World Output and World Trade Pictureand World Trade Picture

In the early 1960s, the U.S. was the world's In the early 1960s, the U.S. was the world's dominant industrial power accounting for dominant industrial power accounting for about 40.3% of world manufacturing about 40.3% of world manufacturing output output

By 2007, the U.S. accounted for only By 2007, the U.S. accounted for only 20.7%20.7%

Other developed nations experienced a Other developed nations experienced a similar declinesimilar decline

The Changing Nature of The Changing Nature of the Multinational Enterprisethe Multinational Enterprise

Since the 1960s, Since the 1960s, there has been a rise in non-U.S. there has been a rise in non-U.S.

multinationalsmultinationals there has been a rise in mini-there has been a rise in mini-

multinationalsmultinationals

The Globalization DebateThe Globalization DebateThe Globalization DebateThe Globalization Debate

ProPro Lower prices for goods Lower prices for goods

and servicesand services Economic growthEconomic growth Increase in consumer Increase in consumer

incomeincome Creates jobs (for many)Creates jobs (for many) Countries specialize in Countries specialize in

production of goods and production of goods and services that are services that are produced most produced most efficientlyefficiently

ProPro Lower prices for goods Lower prices for goods

and servicesand services Economic growthEconomic growth Increase in consumer Increase in consumer

incomeincome Creates jobs (for many)Creates jobs (for many) Countries specialize in Countries specialize in

production of goods and production of goods and services that are services that are produced most produced most efficientlyefficiently

ConCon Destroys manufacturing Destroys manufacturing

jobs in wealthy nationsjobs in wealthy nations Wage rates of unskilled Wage rates of unskilled

in advanced countries in advanced countries declinedecline

Companies move to Companies move to countries with fewer countries with fewer labor and environment labor and environment regulationsregulations

Loss of sovereigntyLoss of sovereignty Homogenized culturesHomogenized cultures

ConCon Destroys manufacturing Destroys manufacturing

jobs in wealthy nationsjobs in wealthy nations Wage rates of unskilled Wage rates of unskilled

in advanced countries in advanced countries declinedecline

Companies move to Companies move to countries with fewer countries with fewer labor and environment labor and environment regulationsregulations

Loss of sovereigntyLoss of sovereignty Homogenized culturesHomogenized cultures

To Recap: GlobalizationTo Recap: Globalization

Is Driven by TechnologyIs Driven by Technology Is seen as threatening cultures because Is seen as threatening cultures because

it is equated with it is equated with WesternizationWesternization Increases the pace at which everything Increases the pace at which everything

happens: capital transfers, spread of happens: capital transfers, spread of disease, change of culture…disease, change of culture…

May be changing our global May be changing our global environment, but can environment, but can statesstates manage manage the globe?the globe?

Who runs the world????Who runs the world????