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.

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.

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.

Question # 2
How is information
flowing around the world?

Strong growth in number of people using the Internet

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 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.
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

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

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.

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

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 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.

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.

Million people

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

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.

Of the almost 250 million people,
who live outside their country of
birth, 47 million people live in the
United States of America.

42% of the people, who live in Sydney, Australia, were born
in another country than Australia.

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.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.

Question # 7
Which countries are the
most and least globalized?

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.

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.

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

Globalization

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