What you'll learn

• How the global economy has grown through trade, investment and commodity chains.
• Why transport, information technology, labour, aid and foreign investment make countries more connected.
• How the WTO, IMF and TNCs help shape globalisation.
• How push and pull factors explain economic, medical, sport and tourism-related movement over the last 50 years.

1. Globalisation: the big idea

Globalisation is about places becoming more connected. It is not just “more trade”. It includes the movement of goods, services, money, information, ideas and people across national borders.

You can see globalisation when a phone is designed in California, uses minerals from central Africa and South America, is assembled in East Asia, advertised online worldwide, and delivered through global shipping networks.

2. The rise of the global economy

Over the last 50 years, many products have stopped being made entirely in one country. Instead, production is split between different places, depending on costs, skills, resources and access to markets.

The diagram shows how one product can connect many countries through raw materials, manufacturing, transport, marketing and sales.

Why commodity chains have grown

Commodity chains have grown because companies can now choose the best location for each stage of production:

• Raw materials may come from countries rich in natural resources, such as cobalt from the Democratic Republic of Congo or copper from Chile.
• Manufacturing may happen where there is skilled labour, reliable factories and lower costs, such as China, Vietnam, South Korea or Taiwan.
• Design and marketing often remain in high-income countries, such as the USA, Japan or European countries.
• Sales are global, especially through online platforms and international retailers.

3. Factors encouraging globalisation

Trade

Trade has increased because many countries have reduced tariffs and quotas. A tariff is a tax on imports. A quota is a limit on the number of goods that can be imported.

Lower trade barriers make it easier and cheaper for companies to sell products worldwide. For example, car parts may cross borders several times before a finished vehicle is sold.

Foreign investment

FDI helps globalisation because it spreads factories, jobs, technology and business methods across borders. For example, Toyota, Samsung and Unilever operate in many countries, not just where their headquarters are located.

Aid

Aid can encourage globalisation when it improves transport, education, healthcare or infrastructure. For example, improved roads, ports and internet access can help a country export goods and connect with world markets.

However, aid does not automatically create development. Its impact depends on how it is managed, whether it reaches the intended people, and whether it supports long-term growth.

Labour

Labour means workers and their skills. Globalisation uses both low-cost labour and highly skilled labour.

Some companies locate factories where wages are lower, while other companies seek highly skilled workers in finance, technology, medicine or engineering. Migration also supplies labour: for example, many workers from South Asia have moved temporarily to Gulf states such as the UAE, Qatar and Saudi Arabia for construction and service jobs.

Modern transport

Transport has become faster, cheaper and more reliable. Containerisation — moving goods in standard metal containers — has made shipping far more efficient because containers can move easily between ships, lorries and trains.

Air freight also allows high-value or time-sensitive goods, such as electronics, flowers and medical products, to move quickly between continents.

Information technology

Information and communication technology, or ICT, includes the internet, mobile phones, satellites, online banking and digital tracking systems.

ICT allows companies to coordinate factories, suppliers, customers and payments across different time zones. A TNC can manage a global supply chain almost instantly using emails, video calls, tracking data and online platforms.

4. Global institutions and TNCs

Some organisations operate across national borders and help create the rules, finance and business networks of globalisation.

The World Trade Organization

The WTO encourages countries to reduce trade barriers and settle trade disputes. This can increase global trade because companies have more predictable rules when selling goods and services overseas.

However, critics argue that the benefits of freer trade may not be shared equally. Richer countries and powerful TNCs can sometimes gain more than poorer countries with less bargaining power.

The International Monetary Fund

The IMF can help stabilise economies, which may make countries more attractive to investors and more connected to global markets.

However, IMF loans may come with conditions, such as reducing government spending or opening markets to foreign companies. These policies can be controversial because they may affect public services and living standards.

Transnational corporations

TNCs are major drivers of globalisation. They organise commodity chains, invest overseas, employ workers in different countries and sell products worldwide. Examples include Apple, Toyota, Coca-Cola, Samsung, Shell and Unilever.

TNCs can bring benefits to host countries, including jobs, training, tax revenue and improved infrastructure. But there can also be costs, such as low wages, poor working conditions, environmental damage or profits being sent back to the company’s home country.

5. Movement of people: migration and tourism

Globalisation also increases the movement of people. Some people move permanently or for many years. Others move temporarily for work, healthcare, sport, study or leisure.

Tourism is temporary travel away from home, usually for leisure, business, visiting friends and relatives, or specialist activities such as medical treatment.

The push–pull model helps explain why people leave one place and are attracted to another.

6. Push and pull factors

Push and pull factors can be grouped into three main types.

Economic factors

Economic push factors include unemployment, low wages, poverty and lack of opportunities. Economic pull factors include jobs, higher wages, better working conditions and career progression.

This explains many flows of economic migration, where people move mainly to improve income or employment. For example, workers from South Asia have migrated to Gulf states for construction and service work, while some Eastern European workers moved to the UK and Germany after EU expansion.

Social factors

Social push factors include poor healthcare, limited education, overcrowding or lack of services. Social pull factors include better schools, hospitals, housing, family networks and quality of life.

This helps explain medical movement, where people travel for healthcare. For example, patients from the UK, USA and other countries may travel to India, Thailand or Turkey for dental work, cosmetic surgery or specialist treatment, often because costs or waiting times are lower. Exact numbers vary by source and year.

Political factors

Political push factors include war, persecution, corruption, lack of rights and insecurity. Political pull factors include safety, stability, legal protection and asylum systems.

For example, conflict in Syria since 2011 pushed millions of people to move within Syria or to nearby countries such as Turkey, Lebanon and Jordan, with some later moving to European countries such as Germany. The exact figures change over time, but the pattern shows how political factors can rapidly increase migration rates.

7. How movement has changed over the last 50 years

International movement has generally increased since the 1970s, although it can fall during shocks such as wars, recessions, pandemics or tighter border controls.

Economic migration has increased

Large income differences between countries encourage people to move for work. Ageing populations in some richer countries also create demand for migrant workers in healthcare, farming, construction and services.

Medical movement has grown

Cheaper flights, online information and global hospital advertising have made medical travel easier. Patients can compare prices, read reviews and arrange treatment abroad more easily than in the past.

Sport migration has become more global

Professional sport is now a global industry. Football, basketball, cricket, athletics and tennis all involve international scouting, sponsorship, coaching and competition. Athletes may move for better facilities, contracts or exposure.

Tourism has expanded rapidly

International tourism has grown because of rising incomes, paid holidays, cheaper air travel, online booking and global marketing. Around the world, international tourist arrivals rose from roughly 166 million in 1970 to about 1.46 billion in 2019, before falling sharply during the COVID-19 pandemic and then recovering. Exact figures depend on the source and definition used.

8. Bringing it together

Globalisation creates a more connected world in two linked ways:

• Goods and money move more easily through trade, FDI, TNCs, transport and ICT.
• People move more easily through migration, tourism, medical travel, sport opportunities and global labour markets.

The result is a world with more connections, but also more uneven impacts. Some places gain investment, jobs and tourism income. Others may face exploitation, environmental pressure, brain drain or dependence on global markets.