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An overview of how the world's economies have become increasingly interconnected and interdependent.
Look at the tag on your shirt or the brand on your phone; how many thousands of miles did those items travel, and how many different languages were spoken by the people who made them, before they reached your hands?
Quick Check
In your own words, what does it mean for two countries to be 'interdependent'?
Answer
It means they rely on each other for goods, services, or economic stability; a change in one country's economy directly impacts the other.
Why did globalization explode in the last 50 years? Two main drivers: Transport and Technology. The invention of the shipping container revolutionized trade by making it incredibly cheap to move goods across oceans. Simultaneously, the Information Technology revolution allowed for near-instant communication. If a company in London needs a software update, a developer in Bangalore can upload it in seconds. This 'death of distance' means that geography no longer limits who we can do business with.
1. Design: A designer in New York creates a digital sketch. 2. Sourcing: Cotton is grown in Texas and shipped to Vietnam. 3. Manufacturing: The shirt is sewn in a factory in Vietnam using machines from Germany. 4. Distribution: The finished shirt is placed in a shipping container and sent to a warehouse in Belgium. 5. Sale: You buy the shirt online from your home in South Africa.
Quick Check
Which two 'engines' made the T-shirt's journey possible and affordable?
Answer
Advanced transport (shipping containers) and communication technology (digital designs and online sales).
Companies often use Glocalization (Global + Local) to succeed. 1. A global fast-food chain enters India. 2. They realize many people don't eat beef for religious reasons. 3. They adapt their global business model by creating a 'McAloo Tikki' (potato burger). 4. Result: A global brand succeeds by respecting and integrating local culture.
As we move forward, globalization is shifting from physical goods to digital services. We are seeing the rise of the 'gig economy' where people work for international companies from their bedrooms. However, recent events like pandemics and trade wars have led some countries to consider near-shoring—moving factories closer to home to avoid long-distance supply chain breaks. The balance between being 'global' and 'local' is the defining economic challenge of the 21st century.
Imagine a smartphone requires a specific microchip made only in Taiwan. 1. A geopolitical conflict or natural disaster halts production in Taiwan. 2. Factories in South Korea and the USA must stop assembling phones. 3. Global prices for electronics rise by . 4. This demonstrates the risk of systemic vulnerability in a highly interconnected world.
What was the primary impact of the 'shipping container' on global trade?
Which term describes a global company changing its products to fit local traditions?
Globalization only refers to the exchange of physical goods like clothes and electronics.
Review Tomorrow
In 24 hours, try to list three items in your house and guess which countries were involved in their 'supply chain.'
Practice Activity
Check the news for a story about a 'supply chain disruption' and identify which countries are being affected by it.