Fundamentally, globalisation is the closer integration of countries and peoples of the world which has been brought about by the enormous reductions of costs of transport and communications and the breaking down of artificial barriers to the flow of goods, services, capital, knowledge and to a lesser extent, people across borders
Joseph Stiglitz, former chief economist at the World Bank
Globalisation is an umbrella term for a complex series of economic, social, technological, cultural and political changes seen as increasing interdependence, integration and interaction between people and companies in disparate locations.
The concept has been referred to as 'the shrinking of time and space'.
Globalisation in the economic, social and political fields has been on the rise since the 1970s, receiving a particular boost after the end of the Cold War. Many economists believe globalisation may be the explanation for key trends in the world economy such as:
- Lower wages for workers, and higher profits, in Western economies
- The flood of migrants to cities in poor countries
- Low inflation and low interest rates despite strong growth
Globalisation has accelerated in the last 15 years. During a period of relatively strong economic growth, world exports as a share of GDP increased from under 20% in 1994 to over 32% in 2008, and whilst global trade fell back in 2009, as a result of the global slowdown, but bounced back in 2010.
Increasing foreign investment can be used as one measure of growing economic globalization. Foreign direct investment (FDI) is a measure of foreign ownership of productive assets, such as factories, mines and land. The largest flows of foreign investment occur between the industrialized countries. However, in recent years the flows into and out of emerging countries has grown significantly.
Following the recent worldwide recession, world GDP fell more than1% in 2009. Some of the world's key emerging economies suffered sharp recessions during 2009, whilst others notably India and China, were able to maintain strong growth.
An excellent source of information on globalisation is the BBC pages dedicated to this issue.