Globalisation of markets

The amount of economic activity taking place across national boundaries has increased hugely as technology and the ease of international trade has restructured the global economy. Economic power is shifting away from traditional dominant economies and towards the ‘BRIC’ nations (Brazil, Russia, India and China).

The economic downturn has presented globalisation with its first real crisis.  As the downturn took hold many countries implemented protectionist trade barriers, leading to ‘economic nationalism’ and reversing much of the market globalisation of previous years.  While this is expected to be a blip in the long-term future of globalisation, protectionist pressures may intensify in the near future if unemployment remains high [1].

Globalisation has social, cultural, political and economic implications that are variable and volatile in the current economic climate. Whilst its costs and benefits remain unevenly distributed across the UK it may well be reinforcing trends that are domestic in origin [2].

What are the implications?

  • High levels of migration - international labour mobility is likely to defy attempts by governments around the world to limit immigration.
  • The emergence of a global middle class as the populations of developing countries become more affluent leading to a more diverse UK population (see ethnic and cultural diversity).
  • Global competition is driving a shift towards a service industry and a ‘knowledge economy’ in the UK impacting on the economy and increasing demand for highly skilled staff (See labour market).  This may have an impact on future career paths and social mobility.
  • Increase in services that can be provided remotely facilitated by falling costs of ICT.
  • Competition alongside economic migration may erode wages, conditions and job security in some sectors.  This can impact upon poverty and inequality.
  • Shifting power in global politics may lead to the UK having a less influential position in global governance.
  • Global competition and the ease with which businesses and individuals can move locations may reduce the power of government to increase taxes or take other measures to address inequality.
  • Increased marginalisation and polarisation of certain ethnic or economic groups.
  • The growth of global demand and a slowing in the growth of global crop yields is putting more pressure on resources, which feeds through into inflation in energy prices and raw materials. (See global resource constraints).
  • Increasing ease in methods of global awareness raising has led to the growth in international campaigns and movements.

Moving forward

The influence of global governance is increasing and the UK’s influential position may change in the future. There is however a lack of public understanding surrounding global governance mechanisms.

  • How can your organisation help to build public understanding of global governance and the opportunities that it may provide?

When global governing bodies discuss poverty it remains almost entirely focussed on that of poorer countries, underplaying poverty in developed economies like the UK.

  • How can you appeal to more global bodies to increase awareness of the social problems caused by poverty and inequality within the UK?

As competition for skilled workers continues is your organisation able to take advantage of the global talent pool by attracting new migrants or workers from overseas?

Want to know more?

Globalisation and the Changing UK Economy

Published by: BERR - Department for Business, Enterprise and Regulatory Reform, a government department.

Date: February 2008

Format: PDF (845K)

What is it? A detail briefing paper outlining what globalisation involves, how the UK
economy is being transformed, and the Government policy response.

How useful is this? The paper is quite long, providing a detailed overview of the the major impacts of globalisation, with a particular emphasis on the labour market. The government has identified developing the UK skills sector as a priority in order to remain competitives as goods and services become ever more open to global trade.

Globalisation, UK poverty and communities - How does globalisation affect people in poverty in the UK?

Published by: JRF – Joseph Rowntree Foundation

Date: 2010 - 2011

Format: Web & PDF

What is it? An in depth research programme by JRF looking at the multifaceted relationship between globalisation and the UK economy.

How useful is this? Through several publications JRF examine the impact globalisation is having on the UK with a particular focus on the labour market, communities, and poverty. More specific topics are covered including the impact of foreign policy, global media, and the economic downturn on local communities as well as changing patterns of marginalisation and inclusion. 

Other comments? All of the major publications can be accessed from the right hand side bar and several summary pieces including an overview of the entire project can be found on the main programme page.

References

  1. Trade and the Crisis: Protect or Recover - IMF, 2010 [back]
  2. How globalisation is changing patterns of marginalisation and inclusion in the UK - JRF, 2003 [back]

 

Last updated at 15:58 Wed 11/May/11.

Recent comments

AuthorComment

The one part of the voluntary sector directly affected by this driver is the international development (NGO) sector. The causes, nature and location of poverty and exclusion will shift significantly, as will the spectrum of global power balances. The result is a need to become increasingly smart about why, whether and where to have partnerships with others. See my comment piece on NGO futures

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