Globalisation – increasing integration of the world’s local, regional and national economies into a single international market.
It involves the free trade of goods and services, the free movement of capital and labour and the free interchange of technology and intellectual capital. This creates integration between societies, as well as cultures influencing each other and increased trade. These has made countries more interdependent as the performance of one country is dependent on other. This was shown in 2008/9 during the Great Recession as the bursting of the housing bubble caused ripples around the world.
Factors that have contributed to globalisation in the past 50 years:
- Trade liberalisation
- Capital market (buying and selling of investment) liberalisation
- Political change (China and former Soviet Union)
- Reduced cost of transport and communications
- Increased significance of global (transnational) companies