globalization

Globalization

Question # 1: What is globalization?Question # 2: How is information flowing around the world?Question # 3: How are goods flowing around the world?Question # 4: What part of global services trade is digital? Question # 5: How is the global flow of capital developing?Question # 6: How many people cross borders every year? Why?Question # 7: Which countries are the most and least globalized?Question # 8: What are the results of the increase in globalization?

When you hear the word globalization, what comes into your mind?

Question for you

Question # 1

What is globalization?

Globalization is the process enabling financial and investment markets to operate internationally, largely as a result of deregulation and improved communications.

http://www.theguardian.com/world/2002/oct/31/globalisation.simonjeffery

http://www.theguardian.com/world/2002/oct/31/globalisation.simonjeffery

Flow of goods, services, capital, people, and information.Numbers from 2012 in USD and in percent of global GDP.

http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age


Flow of goods, services, and capital. In USD trillion and in percent of GDP.



Total exports as a percentage of world GDP.GDP = Consumption + Investments + Government spending + (Exports – Imports).

http://www.dhl.com/content/dam/Campaigns/gci2014/downloads/dhl_gci_2014_study_high.pdf

http://www.dhl.com/content/dam/Campaigns/gci2014/downloads/dhl_gci_2014_study_high.pdf

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http://globalization.kof.ethz.ch/media/filer_public/2015/03/04/press_release_2015_en.pdf

Economic globalization

1.The extent of cross-border trade, investment and revenue flows in relation to GDP.

2.The impact of trade and capital transaction restrictions.



Social globalization

1. Cross-border personal contacts measured in the form of telephone calls, letters and tourist flows as well as the size of foreign population.

2. Cross-border information flows measured in terms of access to the internet, TV and foreign press products.

3. Cultural affinity to the global mainstream measured in terms of the number of McDonald’s and IKEA branches as well as book imports and exports in relation to GDP.



Economic globalization

The number of foreign embassies resident in a country. The number of international organisations of which the country is a

member. The number of UN peace missions in which the country has been

engaged. The number of bilateral and multilateral agreements the country has

concluded since 1945.



Question # 2

How is informationflowing around the world?


Strong growth in number of people using the Internet


The flow of information is increasing.

It took more than 50 years after the telephone was invented, until half of American homes had one.

It took radio 38 years to attract 50 million listeners. Facebook attracted 6 million users in its 1st year.

http://www.mckinsey.com/insights/strategy/the_four_global_forces_breaking_all_the_trends



Global online traffic. 500 fold increase in 12 years

Year Volume of trade

2012 40,000 petabytes a month.

2000 84 petabytes a month.



Flow of information in 2008 and 2013



Year Skype share of international calls

2013 39%

2005 3%

Strong growth in Skype share of international calls



Strong growth in cross-border Internet traffic.


Much of the value of knowledge-intensive flows has yet to be realized. For example, the world’s supply of research has made a leap forward as emerging markets have come online and as academics have begun collaborating with international colleagues at a rate not seen before.



Very little of the content created by users on, for example, blogs, has been monetized directly from users. As a result, the significant value that this content generates does not show up in economic statistics but instead reveals itself as “consumer surplus.”

Previous McKinsey research has shown that the surplus from the United States and Europe alone is close to USD 250 billion each year.



Why do you share information on social media? What is your purpose?

Question for you

Question # 3

How are goods flowing around the world?

Top 3 footwear exporting countries in 2014

http://wits.worldbank.org/detailed-product-analysis-visualization.html

http://wits.worldbank.org/detailed-product-analysis-visualization.html

Top importers of coffee in 2013:# 1: USA.# 2: Germany.# 3: Italy and France.

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http://atlas.cid.harvard.edu/explore/tree_map/import/show/all/0901/2013/

In 2014, 35% of goods crossed

borders, up from 20% in 1990.



From 1995 to 2012, the flow of goods has grown by an average of 7.8% per year.




Flow of goods in 1980 and 2011



Year E-commerce share of total goods trade

2013 12%

2005 3%

E-commerce share of total goods trade


3D printing technology could make it easier and cheaper to produce goods and services on home soil. That could mean less trade and less interaction between nations and their companies.

http://uk.businessinsider.com/credit-suisse-report-on-risks-to-globalization-2015-9

http://uk.businessinsider.com/credit-suisse-report-on-risks-to-globalization-2015-9

Question # 4

What part of global services trade is digital?


Year Digitally enabled share of total services trade

2013 63%

2005 51%



Flow of services in 2001 and 2011


Question # 5

How is the global flow of capital developing?


Flow of capital in 2002 and 2012


Global capital flows expanded 25 times between 1980 and 2007.



The volume of cross-border payments is growing, but the size of individual payments flying around the world has diminished, as smaller economic actors have engaged in cross-border trade, enabled by lower transaction costs online and the rise of international e-commerce.

Between 2007 and 2011, that average value fell by 27% in the UK, 58% in Germany, and 71% in Mexico.



In Eastern Europe, many people pay with cash.

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For what purpose have you useda crowdfunding website?

Question for you

Further inspiration

http://www.slideshare.net/frankcalberg/crowdfunding-35835254

http://www.slideshare.net/frankcalberg/crowdfunding-35835254

Question # 6

How many people cross borders every year? Why?

More than 1 billion people crossed

borders in 2009, over 5 times the number in 1980.




Million people


While the share of people living outside their home country has remained remarkably steady at 2.7% since

1980, short-term travel and students enrolling in foreign universities have grown at 3.4% and 4.8% per year, respectively, between 2002 and 2010.



Flow of people in 2002 and 2010



Where will you go next year? Why?

Question for you

Question # 7

Which countries are the most and least globalized?

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Strong growth in trade between China and Africa

Year Volume of trade between China and Africa

2012 USD 211 billion.

2000 USD 9 billion.


Question # 8

What are the results of the increase in globalization?

Research shows that greater openness to cross-border exchanges of goods, services, finance, and data and communication flows is linked to

faster growth in GDP, with both a short-term and a long-term effect on growth.



Results of globalization

More efficient allocation of resources across countries. Higher productivity and efficiency. Increased average incomes and wages. Greater competition. Lower prices and increased product variety and quality.

http://www.oecd.org/sti/ind/45954526.pdf

http://www.oecd.org/sti/ind/45954526.pdf

Openness to both inflows and outflows is linked to greater economic growth in various ways: by promoting the efficient allocation of resources, by increasing competition, by giving the domestic market access to ideas

and innovations.



The economic expansion and explosion in trade has

been accompanied by growing income inequality.

China’s Gini index, a measure of income distribution where 0 is perfect equality and 1 is perfect inequality, has grown from roughly 0.3 in the early 1980s to above 0.45 in recent years.

http://harvardmagazine.com/2015/03/how-globalization-begets-inequality

http://harvardmagazine.com/2015/03/how-globalization-begets-inequality

Further inspiration

http://atlas.cid.harvard.edu/http://atlas.media.mit.edu/https://www.atkearney.com/documents/10192/5911137/Global+Cities+2015%E2%80%B9The+Race+Accelerates.pdf/7b239156-86ac-4bc6-8f30-048925997ac4http://comtrade.un.org/http://decoder.thegfcc.org/http://www.ghemawat.com/http://globe.cid.harvard.edu/http://resourcesfutures.org/http://www.strategy-business.com/article/00298http://unctad.org/http://viz.ged-project.de/http://wits.worldbank.org/https://youtu.be/E8GxX9uTEnghttps://youtu.be/Ve810FHZ1CQ

http://atlas.cid.harvard.edu/

http://atlas.media.mit.edu/

https://www.atkearney.com/documents/10192/5911137/Global+Cities+2015%E2%80%B9The+Race+Accelerates.pdf/7b239156-86ac-4bc6-8f30-048925997ac4

http://comtrade.un.org/

http://decoder.thegfcc.org/

http://www.ghemawat.com/

http://globe.cid.harvard.edu/

http://resourcesfutures.org/

http://www.strategy-business.com/article/00298

http://unctad.org/

http://viz.ged-project.de/

http://wits.worldbank.org/

https://youtu.be/E8GxX9uTEng

https://youtu.be/Ve810FHZ1CQ

globalization

Documents

number of people

number of mcdonalds

number of bilateral

crossborder information

word globalization

percent of global gdp

global services trade

global flow of capital