Globalization A process that makes something worldwide in its reach or operation. Globalization is often used in reference to the spread and diffusion of economic or cultural influences. Globalization is not new!

Developed Nations – Those nations with the industrialization, transportation, and business facilities for advanced manufactured goods. Emerging Nations – Those in the process of becoming industrialized.

Information Industries Change Economies Technological advances in manufacturing reduced the need for factory workers. But in other areas of the economy, new demands were emerging. Computerization and communications advances changed the processing of information. Manufacturing jobs began to move out of developed nations and into emerging nations

Global Economy Includes all the financial interactions among people, businesses, and governments that cross international borders.

Multinational Corporations Companies that operate in a number of different countries (Ex: ExxonMobil, Toyota, Walmart, Apple) Multinational corporations are not always a positive presence in developing countries.

Expanding Free Trade Opening up the world’s markets to trade is a key aspect of globalization.

Regional Trade Blocs Europe – European Union (EU) North America – North American Free Trade Agreement (NAFTA) South East Asia – Association of Southeast Asian Nations (ASEAN) World – World Trade Organization (WTO)

Impact of Global Development Political Impacts – turning to developing nations for resources, trade restrictions, and invasions for resources. Trade agreements can also lead to improved relations between countries Environmental Impacts – burning of coal and oil, transportation pollution, and destroying the ozone. Sustainable Growth – collaborating ways to reduce negative effects of development, promoting green (sustainable) growth.

Global Economic Crisis Globalization can cause a ripple effect when changes occur to a significant power. This happened in 2008 when the economy of the United States plummeted. Housing prices drastically increased and irresponsible lending policies allowed virtually anyone to be approved for a mortgage loan.

Global Economic Crisis cont… Mortgages were bundled into mortgage-backed security (MBS) and purchased by investors worldwide. Housing prices plummeted and the value of MBSs declined. Lending came to a halt, investors were threatened by bankruptcy, and millions worldwide lost their homes and jobs.

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Pros Cons Creates jobs in emerging countries Promotes investment in less developed countries Promotes peace throughout the world Creates a sense of world community Raises the standard of living around the world Benefits those who already have money Benefits developed nations disproportionately Creates conflict because of an inherently unfair system Erodes local cultures Takes jobs from high-paid labourers in developed countries Pros and Cons of Economic Globalization