Extent Of Globalisation

To what extent have the processes of globalization resulted in a more even distribution of economic activity across the globe?

Globalization is currently a very hot topic and many people have an awful lot to say about the matter, creating different theories and points of view. A definition of globalization could be, �The straightforward exchange between core and peripheral areas based upon a broad division of labour, is being transformed into a highly complex, kaleidoscopic structure involving the fragmentation of many production processes and their geographical relocation on a global scale in ways which slice through national boundaries.’ (Dicken ’98).

When talking about globalization it is difficult to go straight down one trail of thought due to there being so many views and theories on the origins, processes and impacts that are involved. These views can tend to be rather varied also, �At one end of the spectrum certain observers claim that today’s world is fully globalized; at the opposite pole ultra-sceptics deny any globalization whatsoever has occurred.’ (Scholte ’00). This massive difference of views may stem from the differences in actual definition that the opinions evolve from. It can be argued that globalization has been around for centuries in the trade of spices and exotic goods, etc. However, others believe that globalization has only really begun to take affect over the last half century when factors such as:

• Advancements in technology.

• Improvements in transport.

• Worldwide communication networks.

• Easing of trade barriers or free trade, etc… have all enabled the integration

of world trade to develop. For the purpose of this assignment I’ll be taking the view of globalization occurring to a much more substantial degree in the second half of the twentieth century.

The distribution of economic activity can be measured in many different ways using various tools and variables, such as flows of trade, FDI (Foreign Direct Investment), migration, information flows, cultural proximity, etc… all of which can be useful in different areas of analysis. In the past economic activity has been resource driven, whereas as now, due to advances in technology in particular, modern day economic activity is based upon �ideas and information rather than material or physical goods.’ (J.Khan notes ’07). This would indicate that knowledge is key and changes in technology mean that a more skilled workforce is needed. Different locations have been better suited to utilise technology over the ages, e.g. the industrial revolution saw the rise of the U.K and Western Europe, and then the introduction of Fordism (mass production) saw the rise of the Far East.

On the whole these different periods of development have made a massive difference to the areas affected, it is however still very difficult to definitively state whether or not the distribution of economic activity is more evenly spread or not. It could be suggested that the distribution of economic activity is definitely not even, however over the last few decades it could be put forward that the level of unevenness may have become less great. The argument of globalization causing world economic activity to become more even is hard to fight for when there are statistics like, �in the year 2000 the top 1% of the worlds population earned more than the bottom 60%,’ also in world GDP terms, �the high income countries account for $37.5tr or 77% but only 15% of the world’s population, the low income countries account for $1.6tr or 3.3% but 37% of the world’s population’, therefore, in broader terms �16% of the world’s population received 84% of the world’s income.’

Another highly effective measurement for measuring inequality and distribution of economic activity is that of income per capita, this tells us how much of the global population lives in poverty (less than $1 per day). Whilst the top 10% of GDP earners receive approximately 100 times more than the bottom 10%, at that lower end of the spectrum �2.8bn people live on less than $2 per day, and 1.1bn live in poverty at less than $1 per day.’ This figure living in poverty has fallen by around 400mn over the past 20 years which isn’t a huge number in the grand scheme of things, however when this is looked at in terms of proportion of the population the amount of people living in poverty has more than halved. This decline in people living on less than a dollar a day doesn’t necessarily mean that we now live in a more globalized economy. The main reason for this decline is due to the meteoric rise of China into the world trade network, along with Mexico and India, this kind of measure of poverty as