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Trade

Globalization

KFC in Mumbai, IndiaKFC in Mumbai, IndiaGlobalization is the increasing exchange of products, money, people and ideas across the world. This exchange is made possible by improvements in transport (such as large container ships to carry goods cheaply over long distances) and telecommunications, particularly the internet. Globalization makes the economy and culture of each country closely connected with, and dependent on, those of every other country. Multinational enterprises (worldwide businesses), such as McDonalds, Samsung and Toyota, thrive in a global economy; their products are produced and sold all over the world. Critics of globalization claim that the power of such huge companies is shaping our world to the disadvantage of poorer nations, workers and the environment.

Outsourcing

Garment factory in BangladeshGarment factory in BangladeshMap showing assembly and delivery routes of A380 partsMap showing assembly and delivery routes of A380 partsIn the global economy, manufacturing of goods can be relocated, or outsourced, to other countries where the costs of production (labour in particular) are lower, or where the manufacturing process is more efficient in some way. Products are often assembled from parts produced in a number of different countries. Anything from aircraft to shoes can be manufactured in this way.

Although the term “globalization” is a recent one (it gained its current meaning in the 1980s), the world’s economies and cultures have long been connected, going back to ancient times. Trade on the Silk Road between China and the Middle East, for example, dates back to the third century BC.

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