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Summary of Globalization

The document outlines the evolution of globalization from the Silk Roads to the current phase termed 'Globalization 4.0,' emphasizing key historical milestones and their impact on global trade. It discusses the progression from limited trade in luxury goods to a complex, interconnected global economy influenced by technological advancements and political changes. The current phase highlights the digital economy's rise, alongside challenges such as economic inequality and environmental degradation.

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Elina Edmund
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8 views

Summary of Globalization

The document outlines the evolution of globalization from the Silk Roads to the current phase termed 'Globalization 4.0,' emphasizing key historical milestones and their impact on global trade. It discusses the progression from limited trade in luxury goods to a complex, interconnected global economy influenced by technological advancements and political changes. The current phase highlights the digital economy's rise, alongside challenges such as economic inequality and environmental degradation.

Uploaded by

Elina Edmund
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as ODT, PDF, TXT or read online on Scribd
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SUMMARY OF GLOBALIZATION

Introduction

In 2018, Alibaba’s decision to establish its regional headquarters in Xi’an, the historic starting
point of the ancient Silk Road, symbolized a full-circle moment in globalization’s journey. This
move highlighted the city's renewed significance in the modern global economy. As we stand on
the brink of a new, digital-driven era termed “Globalization 4.0,” it’s essential to reflect on the
historical milestones that have shaped global trade and interconnectedness.

The Silk Roads (1st Century BC – 5th Century AD and 13th – 14th Centuries AD)

The Silk Road marked the inception of long-distance trade, connecting China and Rome. Luxury
goods like silk traversed thousands of miles, introducing global trade links. However, this early
form of globalization was limited, with luxury items constituting a small fraction of the economy
and numerous intermediaries facilitating trade. The prosperity of the Silk Road was closely tied
to the stability provided by dominant empires like Rome and China. Its decline corresponded
with the fall of these empires, only to be revitalized during the Mongol Empire’s reign in the
medieval period.

The Spice Routes (7th – 15th Centuries)

The spread of Islam from the 7th century onwards significantly influenced global trade. Islamic
merchants, with trade deeply embedded in their culture, dominated Mediterranean and Indian
Ocean trade routes by the 9th century. Spices became the primary commodities, with regions like
the Maluku Islands in Indonesia supplying coveted cloves, nutmeg, and mace. Despite the
expansion of these trade networks, globalization remained limited, focusing on luxury goods and
involving complex trade routes.

The Age of Discovery (15th – 18th Centuries)


The Age of Discovery marked a pivotal shift as European explorers connected the East and West
and unveiled the Americas. Advancements in navigation and maritime technology enabled
nations like Portugal, Spain, the Netherlands, and England to establish global trade networks.
This era saw the beginning of truly global trade, though it was characterized by exploitation,
colonization, and the transatlantic slave trade. Trade volumes increased, but the global economy
remained uneven, with European powers controlling supply chains and benefiting
disproportionately.

The First Wave of Globalization (19th Century – 1914)

The 19th century ushered in the first significant wave of globalization, propelled by the Industrial
Revolution. Innovations like the steam engine and industrial weaving machines positioned Great
Britain as a global leader. Steamships and railways revolutionized transportation, enabling goods
to be moved over vast distances efficiently. Industrialization allowed for mass production of
goods in demand worldwide, such as textiles and iron products. During this period, global trade
grew at an average annual rate of 3%, with exports rising from 6% to 14% of global GDP by
1914. Economist John Maynard Keynes highlighted this interconnectedness, noting that a
London resident could effortlessly order products from around the world.

The Second Wave of Globalization (Post-World War II – Late 20th Century)

Following World War II, globalization experienced a resurgence under U.S. leadership. The
establishment of institutions like the European Union and various free trade agreements
facilitated international trade. Technological advancements from the Second Industrial
Revolution, including automobiles and airplanes, further shrank distances. Initially, the world
was divided into two spheres due to the Cold War, but the collapse of the Soviet Union in 1991
led to a more integrated global economy. By 1989, exports accounted for 14% of global GDP,
mirroring pre-World War I levels. The rise of the internet in the late 20th century further
accelerated global integration, enabling rapid communication and the emergence of global value
chains.
The Third Wave of Globalization (Late 20th Century – Early 21st Century)

The late 20th and early 21st centuries witnessed an intensified phase of globalization. The World
Trade Organization (WTO) encouraged nations to enter free-trade agreements, leading to China’s
accession in 2001 and its transformation into a global manufacturing hub. The internet facilitated
seamless global communication, allowing for intricate global value chains where research,
sourcing, production, and distribution occurred across multiple countries. By the 2000s, global
exports constituted about a quarter of global GDP, with trade (the sum of imports and exports)
accounting for approximately half of world GDP. This period saw a significant rise in the global
middle class, with hundreds of millions benefiting from the integrated global economy.

Globalization 4.0 (Early 21st Century – Present)

Today, we are entering “Globalization 4.0,” characterized by the digital economy’s prominence.
E-commerce, digital services, and technologies like 3D printing are reshaping global trade.
Artificial intelligence is playing an increasingly significant role, while challenges such as
cyberattacks pose new threats. Concurrently, globalization’s negative aspects, like climate
change, have become more pronounced, with environmental degradation in one region affecting
the entire planet. Despite the benefits, there’s growing discontent, especially in Western nations,
where economic inequality and social instability have led to protectionist sentiments. Global
exports as a percentage of GDP have plateaued and even slightly declined. The United States,
once a champion of globalization, is retreating from its leadership role, prompting calls for a
more inclusive and sustainable approach to globalization.

Conclusion
Over the course of time, globalization has undergone several transformative phases, each shaped
by technological advancements, political shifts, and economic causes. As we navigate the
difficulties of Globalization 4.0, it’s importanl to learn from history, addressing the challenges
and disparities that have emerged, to foster a more equitable and sustainable global economy.

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