Globalisation: Definition, Causes & Impact (2024)

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Globalisation definition

So, how do we define globalisation? Globalisation is the way that the world is becoming more and more connected. Countries are connecting with each other from far away places, they are becoming more reliant on each other (interdependence), and flows of capital, people, goods and information are moving their way around the world. In recent times, globalisation has been speeding up, increasing these flows of people, goods, and information. However, the process of globalisation can be seen throughout history.

In today's world, we are seeing a huge acceleration in the processes of globalisation, but it's important to take a look back into history too. A critical example of historical globalisation is The Silk Road. This was a collection of trade routes, from 130BC to 1453AD, connecting the Middle East and Europe, to China and the East. At the time, these trade routes allowed the primary connection between the East and West.

Did you know that it is widely thought that the Silk Road was one of the main causes of the Black Death plague which spread in the 14th century?

Fig. 1 - The Silk Road trade routes (red is the land route, whilst blue is the water route).

It is also possible for the characteristics of globalisation to be reversed; some countries can go backwards, rather than continue with globalisation acceleration. Certain political or economic climates can result in this backwards movement, such as the first and second world wars, which minimised connections between countries. Other examples include the Great Depression when protectionism (limiting trade from foreign competition by increasing restrictions) became more popular.

Causes of globalisation

So, globalisation is the increased interconnectivity around the world. But what exactly caused this globalisation phenomenon? What, or who has contributed to this interconnected world?

Is the world getting smaller?

Transport and trade boomed during the 19^th century. The development of railways and larger ships meant that products and people could move more quickly and more cheaply around the world. The development of aeroplanes and containerisation shipping (the transport of goods in mass in large shipping containers) in the 20^th century, progressed this further. Fast-forward to the 21^st century, a period characterised by increased technological interconnectivity; communication has become significantly easier with the increase in ICT, the internet, mobile technologies, and social media.

Increasing transport and communications have contributed to the theory of time-space compression. Coined by David Harvey, a Marxist geographer, time-space compression is the way that places are becoming theoretically closer together, and distance is getting smaller. This can be directly related to the theory of a shrinking world. Obviously, the world isn't actually getting smaller; that's impossible (unless we get hit by an asteroid!) However, the idea of the world shrinking refers to the way that globalisation makes the world feel smaller, due to increased connectivity, contacts, and flows.

Transnational Corporations (TNCs)

The growth of Transnational Corporations has contributed massively to economic globalisation. Transnational Corporations (TNCs) are large companies that can be located in more than one country. Think of McDonald's or Starbucks, for example. These companies conduct work in countries all around the world, through foreign direct investment (FDI), increasing flows and connections. TNCs operate internationally, through the processes of outsourcing and offshoring, which allows TNCs to work within a global production network.

For some examples of TNCs, take a look at the explanation of Oil Companies, which examples the growth of large oil companies in Saudi Arabia and Iran.

Governments and Organisations

You can read more on this section in the explanation on the Role of Government, but let's bullet point a few reasons why governments and organisations have a role in globalisation.

• Different political ideologies are being driven around the world, such as the increased influence of capitalism and democracy, which is so dominant in the west.
• Organisations like the IMO (International Maritime Organization) help to increase free trade and FDI.
• National governments help to get rid of trade barriers (just like in the European Union), improving trade between nations.
• Governments and other organisations, like the United Nations (UN), help to provide global connections, through things like aid or other forms of international support, helping countries to work together.
• Other policies, such as free market liberalisation, help to reduce trade barriers and improve competition to increase productivity.

Impact of globalisation

The impact of globalisation differs across the world. Some countries are massively affected by globalisation, whilst others, have been entirely closed off from this process. How much a country has globalised can be measured by different indicators, such as the AT Kearney Index and the KOF Index. Let's explore these ideas.

Measuring globalisation

The AT Kearney Index and the KOF Index (Konjunkturforschungsstelle, created by the Swiss Economic Institute) have similar characteristics. They both look at specific indicators that show how well-connected a country may be. These indicators include things like FDI, how much internet is used, the amount of aid from governments or involvement in international organisations, or how much tourism occurs in the country, to highlight just a few.

Do you think there is a relationship between globalisation and the level of development within a country?

Switched off?

Some countries have experienced no effects of globalisation. Countries like North Korea, or countries located in the Sahel region in Northern Africa, are examples of countries that have been somewhat shut off by globalisation. But why might this be? Some countries may be affected by certain political issues, like ideologies or conflict. North Korea is run under a communist dictatorship system, whereby things like external tourism, outward migration, and internet access, are all forbidden. The country also has a limited trading system.

Fig. 2 - North Korean propaganda

The Sahel region is the African region including countries such as Niger and Burkina Faso, for example. Issues commonly seen in these countries include corruption, war, high levels of poverty, and subsistence economies, making it unattractive for any form of FDI. Physical characteristics are also one of the main reasons for the country being cut off from global processes. Many of these regions are landlocked, far away from any coastal passages for trade, meaning transport to these areas is expensive and long.

Our climate is changing rapidly. Global warming is affecting many corners of the world. Agriculture exports are a huge part of globalisation and trade. However, as the climate is changing, this is affecting the land availability and quality for agricultural production, e.g., more areas are becoming more arid and desertified. Hotter countries can be more affected by this, cutting off globalisation there.

Advantages of globalisation

With globalisation, there have been both winners and losers. Let's talk about the winners of globalisation and the advantages that globalisation has brought to the world.

Cultural and social advantages

Globalisation has allowed more people to move around the world, as well as all sorts of products and information, which can now be accessed by people everywhere. Cultural characteristics have merged as a result; for example, Western-style foods and clothes can be seen all over the world.

Social globalisation can be seen through the increasing flows of people through migration and tourism. This has created a global culture. Some great examples of the global culture include the Hollywood film industry, which promotes American/Western values and ways of life. English is the world's dominant language of business, now used across the world for global communications. Even fast food chains show this global culture; fast food chains, like McDonald's, can be found all over the world.

Interestingly, some TNCs can change their products when operating in different countries, e.g. the McDonald's menu changes in different countries to be more suited to the culture. This is known as glocalisation and contributes to global culture. You can find the McSpicy Paneer in India, Poutine in Canada, and McSpaghetti in the Phillippines.

Did you know, the word McDonaldisation has been used to describe the spread of western culture around the world?

Economic and political advantages

Global trade and the increase of TNCs, have helped to reduce inequalities, improve development in poorer countries, and companies can gain profit hugely. The free movement of people has helped countries to fill the gaps with certain jobs that are experiencing shortages; an example of this is how the UK hired foreign nurses to work in UK hospitals. With globalisation, countries can work together to make global decisions, producing global networks. This can bring benefits to the environment, for example. The Paris Agreement is a treaty signed by 193 states and the European Union, allowing countries to work together to reduce global warming and catastrophic climate change.

Disadvantages of globalisation

Globalisation has not impacted every country in the same way. In fact, many places lose out in the process of globalisation. Globalisation has resulted in huge inequalities across the world, and some countries are even exploited in the process. With the spread of western ideals, some cultures and languages are eroding. Environmental damage is another huge disadvantage associated with the acceleration of globalisation.

But who are the winners? Does anybody really win? Take a look at our explanation of the Effects of Globalisation for more on who has gained or lost out from the processes of globalisation.

What are the drivers of globalisation?

The drivers of globalisation include the development of transport and technology, the rise of TNCs, and the role of governments and organisations.

What is the simple meaning of globalisation?

The simple meaning of globalisation is the increasing connectivity across the world.

What are the advantages of globalisation?

The advantages of globalisation can be social and cultural, such as increased access to products, and flows of people, contributing to a global culture. There are also economic and political advantages, such as reduced inequalities and improved development, and the production of global networks through global decision-making.

What is globalisation in geography?

How has technology contributed to globalisation?

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