Aspects of Globalisation

Globalisation

• Increasing economic integration through trade, investment and migration;

• The shift towards market-driven production and distribution systems in many countries, most notably in Europe and Asia;

• The rapid technological advancement, especially evident in ICT (information and communications technology).

Globalisation in History, 1980-2000

Source: Williamson, J. (2003) “Back to the Future.” World Economics, pp. 95-138.

World Exports as a Percentage of World GDP(Current prices and exchange rates)

Source: Quoted from Glyn, A. (2005), “The Assessment: How Far has Globalisation Gone?” Oxford Review of Economic Policy, pp. 1-14.

Trade Openness(average of exports and imports, % GDP;

current prices and PPPs)

Source: Quoted from Glyn, A. (2005), “The Assessment: How Far has Globalisation Gone?” Oxford Review of Economic Policy, pp. 1-14.

Import Penetration of Domestic Market for Manufactures 1913-1999

(%)

1913 1950 1974 1989 1999

USA 3 2 6 14 21

Japan 34 3 5 5 6

Europe 13 6 17 21 29

Notes : The figures represent imports as a percentage of apparent consumption (production plus imports less exports). Data for Europe are simply averages of U.K., Germany, France and Italy.Source : Quoted from Glyn, A. (2005), “The Assessment: How Far has Globalisation Gone?” Oxford Review of Economic Policy, pp. 1-14.

Foreign Direct Investment, 1991-2002(% of gross domestic investment)

1991-1996 1997-2002

USA 4.4 13.5Japan 5.0 13.1

World Developed countries

USA EU Developing countries

1997-2002 1997-2002 1997-2002 1997-2002

13.6 11.2 23.3 12.9

Source : Quoted from Glyn, A. (2005), “The Assessment: How Far has Globalisation Gone?” Oxford Review of Economic Policy, pp. 1- 14.

4.116.6 8.6 30.7

Country 1870-1913 1914-49 1950-73 1974-98France 890 -236 3,630 1,026Germany -2,598 -3043 7,070 5,911Italy -4,459 -1,771 -2,139 1,617United Kingdom -6,415 -1,4054 -605 737

Total Western Europe2 -13,996 -3,662 9,381 10,898

Australia 885 673 2,033 2,151New Zealand 290 138 247 87Canada 861 207 2,126 2,680United States 15,820 6,221 8,257 16,721

Total Western Offshoots2 17,856 7,239 12,663 21,639Source: Williamson, J. (2003) “Back to the Future.” World Economics , pp. 95-138.

Notes: 1 Negative sing indicates net outflow; 2 Includes Belgium, Netherlands, Norway, Sweden and

Switzerland, 3 1922-39, 4 Excludes 1939-45

Net Migration, Western Europe and the Western Offshoots: 1870-19981

(000)

The Future

• Faster growth and a higher degree of interrelation between several industries

• Accounting/management consultants

• Chemicals

• Food

• Health care

• Mass media

• Telecoms

• Leisure

• Faster technological progress

• New countries jumping on the globalisation bandwagon

• New national and international regulatory frameworks

Opportunities

• Larger markets

• Scale economies (ability to spread fixed costs over larger volumes)

• Uniform standards

• Access to best resources

• Lower risks

• ‘Easier’ regulatory framework

Risks

• Political

• Social

• Tougher regulation

• Multitude of competitors