The Rise Of Globalization

HOW DOES 21ST CENTURY GLOBALIZATION DIFFER FROM 20TH CENTURY GLOBALIZATION? As every question regarding globalization can be very open and cover all faces, this answer will be limited to the aspects of economics. Globalization like any ideology has been a thing in progress. It evolves and it evolves rapidly, seeing great progress in the last 50 years.

From an economical viewpoint globalization has been defined by key terms such as the free flow of money, free trade, outsourcing, offshoring and the rise of multinational corporations. All of these key terms have changed over the course of both centuries.

With the term free flow of money, I am referring to the increase of foreign investments, mostly seen in industrialized countries but also, in

Economic development plans such as the Marshall plan, introduced a principle of trade, which included global trading actions, benefiting all participants. Over the course of the next decades the world traded more and more frequently, Economic partnerships such as the European Coal and Steel Community are one of the few results of this increased trade. This process had been great and countries such as Germany have been very successful in this new network of global flows. The 21st century has eclipsed this progress by far. The flow of goods, services and finance was 36 percent of the global GDP in 2012, or in figures $26 trillion, 50% more than in 1990. This has been in part of the dissolution of the Soviet Union but is more associated to the rise of developing countries. The traditional industrial nations such as the United States or Germany have had an increase in trade but the greatest development has been in so called developing countries. Today these economies have a share of 38 % of the global flow, compared to 6% in

Mostly it was done to minimize wages and labor laws, in short to create more profit. Outsourcing has directly benefited the trade balances of countries. It has been a beneficial for the global economy, it has helped tremendously for global growth, and economic growth in developing countries, while companies were able to offer lower prices. Consumer goods are cheap because they can be produced abroad, a great thing for the people and the low wage labor shortage is nonexistent. In this century outsourcing is still a very important economic tool for global companies to remain competitive, but interestingly there have been several companies based in developing countries which outsource their research and other departments to developed countries, mostly to be closer to the market, but also to gain access to the highly qualified workers in these