Globalization
When you hear the word globalization, what comes into your mind?
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?
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
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.
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
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://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.
http://globalization.kof.ethz.ch/media/filer_public/2015/03/04/press_release_2015_en.pdf
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. http://globalization.kof.ethz.ch/media/filer_public/2015/03/04/press_release_2015_en.pdf
Question # 2 How is information flowing around the world?
Strong growth in number of people using the Internet
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
The flow of information is increasing 1. Facebook attracted 6 million users in its 1st year. 2. It took radio 38 years to attract 50 million listeners. 3. It took more than 50 years after the telephone was invented, until half of American homes had one.
http://www.mckinsey.com/insights/strategy/the_four_global_forces_breaking_all_the_trends
Global online traffic. 500 fold increase in 12 years
Year 2012
Volume of trade 40,000 petabytes a month.
2000
84 petabytes a month.
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Flow of information in 2008 and 2013
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Strong growth in Skype share of international calls
Year 2013
Skype share of international calls 39%
2005
3%
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Strong growth in cross-border Internet traffic.
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Much of the value of knowledge-intensive flows has yet to be realized. 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. http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
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. http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Question for you
Why do you share information on social media? What is your purpose?
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://atlas.cid.harvard.edu/explore/tree_map/import/show/all/0901/2013/
Top importers of coffee in 2013: # 1: USA. # 2: Germany. # 3: Italy and France.
In 2014, 35% of goods crossed borders, up from 20% in 1990.
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Value of global exports, 1800 - 2014
https://ourworldindata.org/grapher/world-trade-exports-constant-prices
From 1995 to 2012, the flow of goods has grown by an average of 7.8% per year.
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Flow of goods in 1980 and 2011
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
E-commerce share of total goods trade Year 2013
E-commerce share of total goods trade 12%
2005
3%
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
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
Further inspiration https://www.teacherspayteachers.com/Product/How-can-we-work-globally-and-locally-1848448
Question # 4 What part of global services trade is digital?
Year 2013
Digitally enabled share of total services trade 63%
2005
51%
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Flow of services in 2001 and 2011
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Question # 5 How is the global flow of capital developing?
Flow of capital in 2002 and 2012
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Global capital flows expanded 25 times between 1980 and 2007.
http://www.mckinsey.com/insights/strategy/the_four_global_forces_breaking_all_the_trends
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. http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
In Eastern Europe, many people pay with cash.
For what purpose have you used a crowdfunding website?
Further inspiration https://www.teacherspayteachers.com/Product/Crowdfunding-2098233
Question # 6 How many people cross borders every year? Why?
The number of people, who travel, is increasing.
More than 1 billion people crossed borders in 2009, over 5 times more than in 1980. http://www.mckinsey.com/insights/strategy/the_four_global_forces_breaking_all_the_trends
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Million people http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Short-term travel and students enrolling in foreign universities have grown at 3.4% and 4.8% per year, respectively, between 2002 and 2010.
http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
Almost 250 million people live outside their country of birth.
http://www.mckinsey.com/global-themes/employment-and-growth/global-migrations-impact-and-opportunity
Between 1990 and 2015, the number of migrants increased by 60%. Migrants = people living outside their country of birth.
http://www.un.org/en/development/desa/population/migration/generalassembly/docs/A_71_296_E.pdf
Of the almost 250 million people, who live outside their country of birth, 16 million people come from India.
http://www.mckinsey.com/global-themes/employment-and-growth/global-migrations-impact-and-opportunity
Of the almost 250 million people, who live outside their country of birth, 47 million people live in the United States of America.
http://www.mckinsey.com/global-themes/employment-and-growth/global-migrations-impact-and-opportunity
42% of the people, who live in Sydney, Australia, were born in another country than Australia.
http://www.mckinsey.com/global-themes/employment-and-growth/global-migrations-impact-and-opportunity
Of the almost 250 million people, who live outside their country of birth, 10% are refugees and asylum seekers who migrated to other countries to escape conflict and persecution.
http://www.mckinsey.com/global-themes/employment-and-growth/global-migrations-impact-and-opportunity http://www.un.org/en/development/desa/population/migration/generalassembly/docs/A_71_296_E.pdf
Research shows that when refugee food aid is in the form of cash rather than food, the host country has greater economic benefits. Example http://www.wfp.org/ provides mobile phones linked to payment accounts to refugees, who can then purchase food and other items at refugee and host-country shops that accept mobile payments. Cash aid gives refugees greater freedom in their purchases and greater variety in their diets. Also, rising incomes of host-country businesses and farms stimulate new rounds of spending and income gains in the local economy. https://hbr.org/2016/10/research-refugees-can-bolster-a-regions-economy
Narrowing the wage gap between immigrant and native workers from 20 – 30 percent to 5 - 10 percent through better economic, social, and civic integration would translate into an additional global output of USD 800 billion to USD 1 trillion per year. http://www.mckinsey.com/global-themes/employment-and-growth/global-migrations-impact-and-opportunity
Question # 7 Which countries are the most and least globalized?
http://globalization.kof.ethz.ch/media/filer_public/2015/03/04/press_release_2015_en.pdf
http://globalization.kof.ethz.ch/media/filer_public/2015/03/04/press_release_2015_en.pdf
Strong growth in trade between China and Africa
Year 2012
Volume of trade between China and Africa USD 211 billion.
2000
USD 9 billion.
http://www.mckinsey.com/insights/strategy/the_four_global_forces_breaking_all_the_trends
Question # 8 What are the results of the increase in globalization?
Research shows that greater openness to crossborder 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. http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
5 results of globalization 1. More efficient allocation of resources across countries. 2. Higher productivity and efficiency. 3. Increased average incomes and wages. 4. Greater competition. 5. Lower prices and increased product variety and quality. 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. http://www.mckinsey.com/insights/globalization/global_flows_in_a_digital_age
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
Between 1988 and 2008. the Asian middle class and the global 1% gained strongly from globalization
https://hbr.org/2016/05/why-the-global-1-and-the-asian-middle-class-have-gained-the-most-from-globalization
Percent agreeing that globalization is a force for good.
http://www.economist.com/blogs/graphicdetail/2016/11/daily-chart-12
GDP per person. Percent change 2011-2015
Further inspiration http://atlas.cid.harvard.edu/ http://atlas.media.mit.edu/ 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://www.un.org/en/development/desa/population/migration/index.shtml http://unctad.org/ http://viz.ged-project.de/ http://wits.worldbank.org/ https://youtu.be/E8GxX9uTEng https://youtu.be/Ve810FHZ1CQ