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The Origins of Globalisation

Origins of Globalisation

Although the term 'globalisation' was first heard around 1960 the origins of the process can be traced to the 16th Century. Key milestones include the first circumnavigation of the earth (1519-1521) and the development of systems of international finance and commerce which helped build a recognisably capitalist, money-based economy.

The intensification of international actions accelerated rapidly between 1820 and 1913 with the near universal adoption of the Gregorian calendar and implementation of international telegraphic and signalling codes. World trade growth per person averaged 33% per decade over this period and between 1871 and 1913 British investment overseas increased by 165%. Revolutions in transportation, including the invention of the locomotive engine and proliferation of steamboats, further ‘compressed’ the globe through 'shrinkage' of international journey times.

A combination of two World Wars and the Great Depression slowed the pace of international economic integration with world trade growth per person only 3% per decade between 1913 and 1937. During the inter-war period the outward orientation of the early 20th century was replaced with economic nationalism, high tariffs and protectionism in most of the industrialised and developing world.

Many of today's international organisations, including the United Nations, the World Bank, the IMF and NATO, were founded in the period immediately after World War II, an era of accelerating growth in global linkages. Further improvements in transportation (with the development of the container ship and rapid growth in aircraft use) and major advances in the world of communications (most recently through the Internet) combined during the second half of the 20th Century to advance globalisation and international integration to unparalleled levels.

What's new about globalisation?

Some writers have referred to the two decades since 1980 as the 'era of globalisation'. Many key indicators, including international telephone call levels, foreign direct investment and cross-border tourist arrivals, have grown at unprecedented rates. The number of internet hosts has increased from 617 thousand in 1990 to over 126 million in 2001, representing a major increase in information flows and personal links across cultures and continents.

The network and information ties of globalisation in the early 21st century are much greater in volume and diversity than the predominantly trade and investment linkages of the late 1800's. Foreign assets accounted for 56.8% of world economic output in 1995 compared to 6.9% in 1870. The current speed of international integration is also much greater than at any time during the post war period.

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