Globalisation has been more apparent in public, political and media narratives whether for economic or national reasons, mostly negative. However, globalisation is a fact of life and can be positive for individuals, communities, sole traders, small and medium enterprises.
In fact, those promoting negatives of globalisation in favour of nativist policies, along with anti-immigration sentiment and antipathy towards educated elites, often have a need to manipulate ageing electorates. This was seen with Brexit and Trump with the promotion of antipathy towards the EU European Union and multilateral trade agreements or trade blocs; giving advantage to existing global corporates avoiding regulation, taxation, competition and other constraints.
From The Mandarin Australia article excerpts from Peter Vanham is head of communications, Chair’s Office, World Economic Forum.
When Chinese e-commerce giant Alibaba in 2018 announced it had chosen the ancient city of Xi’an as the site for its new regional headquarters, the symbolic value wasn’t lost on the company: it had brought globalisation to its ancient birthplace, the start of the old Silk Road. It named its new offices aptly: “Silk Road Headquarters”. The city where globalisation had started more than 2,000 years ago would also have a stake in globalisation’s future.
Alibaba shouldn’t be alone in looking back. As we are entering a new, digital-driven era of globalisation — we call it “Globalisation 4.0” — it is worthwhile that we do the same. When did globalisation start? What were its major phases? And where is it headed tomorrow?
Silk roads (1st century BC-5th century AD, and 13th-14th centuries AD)
People have been trading goods for almost as long as they’ve been around. But as of the 1st century BC, a remarkable phenomenon occurred. For the first time in history, luxury products from China started to appear on the other edge of the Eurasian continent — in Rome. They got there after being hauled for thousands of miles along the Silk Road. Trade had stopped being a local or regional affair and started to become global.
Spice routes (7th-15th centuries)
The next chapter in trade happened thanks to Islamic merchants. As the new religion spread in all directions from its Arabian heartland in the 7th century, so did trade. The founder of Islam, the prophet Mohammed, was famously a merchant, as was his wife Khadija. Trade was thus in the DNA of the new religion and its followers, and that showed. By the early 9th century, Muslim traders already dominated Mediterranean and Indian Ocean trade; afterwards, they could be found as far east as Indonesia, which over time became a Muslim-majority country, and as far west as Moorish Spain.
Age of Discovery (15th-18th centuries)
Truly global trade kicked off in the Age of Discovery. It was in this era, from the end of the 15th century onwards, that European explorers connected East and West — and accidentally discovered the Americas. Aided by the discoveries of the so-called “Scientific Revolution” in the fields of astronomy, mechanics, physics and shipping, the Portuguese, Spanish and later the Dutch and the English first “discovered”, then subjugated, and finally integrated new lands in their economies.
First wave of globalisation (19th century-1914)
This started to change with the first wave of globalisation, which roughly occurred over the century ending in 1914. By the end of the 18th century, Great Britain had started to dominate the world both geographically, through the establishment of the British Empire, and technologically, with innovations like the steam engine, the industrial weaving machine and more. It was the era of the First Industrial Revolution.
The world wars
It was a situation that was bound to end in a major crisis, and it did. In 1914, the outbreak of World War I brought an end to just about everything the burgeoning high society of the West had gotten so used to, including globalisation. The ravage was complete. Millions of soldiers died in battle, millions of civilians died as collateral damage, war replaced trade, destruction replaced construction, and countries closed their borders yet again.
Second and third wave of globalisation
The story of globalisation, however, was not over. The end of the World War II marked a new beginning for the global economy. Under the leadership of a new hegemon, the United States of America, and aided by the technologies of the Second Industrial Revolution, like the car and the plane, global trade started to rise once again. At first, this happened in two separate tracks, as the Iron Curtain divided the world into two spheres of influence. But as of 1989, when the Iron Curtain fell, globalisation became a truly global phenomenon.
That brings us to today, when a new wave of globalisation is once again upon us. In a world increasingly dominated by two global powers, the US and China, the new frontier of globalisation is the cyber world. The digital economy, in its infancy during the third wave of globalisation, is now becoming a force to reckon with through e-commerce, digital services, 3D printing. It is further enabled by artificial intelligence, but threatened by cross-border hacking and cyberattacks.
Technological progress, like globalisation, is something you can’t run away from, it seems. But it is ever changing. So how will Globalisation 4.0 evolve? We will have to answer that question in the coming years….
From The Lowy Institute:
Originally published in the Australian Financial Review by Natasha Kassam
COVID-19 signals the end of peak globalisation. Borders have hardened. Tourism has withered. Medical supplies have been blocked at ports. Citizens have been prioritised while foreigners were sent home.
Globalisation has been much maligned in recent years – already struck by the financial crisis and the US-China trade war. Growing hostility towards global institutions and trade competition has characterised politics of several countries. And with concern about so-called globalism came attacks on the so-called globalists: “The future does not belong to globalists, the future belongs to patriots,” said President Donald Trump at the United Nations General Assembly last year.
Australians, by contrast, have remained largely immune to these trends. New Lowy Institute polling finds seven in 10 Australians say globalisation is mostly good for our country, unchanged from 2019. While the United States has succumbed to protectionism and negativity towards migrants, Australians have remained supportive of free trade. Anti-migration sentiment has always lurked in Australia, but years of polling show that most Australians agree that immigration makes our country stronger and wealthier and contributes to our national character.
Ongoing struggles in Australia’s relationship with China, our largest trading partner, could fuel further distrust of globalisation. Disputes over beef and barley exports could just be the beginning. Most Australians already say we are too economically dependent on China, and the recent ambiguous threats of economic coercion against Australian exports will only deepen that concern.
Globalisation may have been dealt a grave blow by this virus, and Australia can’t save it alone. As a trading nation, that only succeeds by embracing globalisation – even the devastation of COVID-19 hasn’t yet shaken our fundamentals. It may well do so, deep into a global economic slowdown. But to date, Australians have leaned into their national character, and continued to show resilience in the face of populism and protectionism.