SECOND YEAR COLLEGE

THE CONTEMPORARY WORLD

QUARTER 1: WEEK 1:
Globalization

NAME: YEAR & SECTION:

 Lesson 1
Globalization

Objectives:

1. Identify the importance of Globalization

2. Know the Positive and Negative effects of Globalization to the world
3. Identify the channels of Globalization
4. Classify some of foreign the country that are on the top of
international Trade
5. Understand the importance of International Trade

Pre-Test:

MULTIPLE CHOICES

I. Direction: Encircle the letter of the correct answer.

1. This is the major exporter of manufactured goods and Products and has
affected wages in both rich and poor countries.

a. USA c. China

b. Mexico d. Canada

2. He describes the current trend as the third great wave of globalization in

human history.

a. Thomas Friedman c. Edison Garfield

b. Siemens d. martin Jones

3. The process by which the world, previously isolated through physical and
technological distance, becomes increasingly interconnected.

a. international trade c. Globalization

b. Channels of Globalization d. Investment

4. One of the major Cultural product around the world

a. Hollywood Movies c. goods

b. technology d. services

5. A Process when you purchase a product from other country?

a. Import c. international trade

2|Page
 b. export d. services

II. Give the meaning of the following abbreviation given very number.

6. FDI -

7. GDP -

8. RCA -

9. UN -

10. IMF -

LESSON

Globalization

Globalization is the process by which the world, previously isolated

through physical and technological distance, becomes increasingly
interconnected. It is manifested by the increase in interaction between
peoples around the world that involves the sharing of ideas, cultures, goods,
services and investment.

The last sixty years have witnessed a huge increase in globalization,

but the phenomenon has been going on for much longer. Thomas Friedman
describes the current trend as the third great wave of globalization in
human history. We live in a world that is highly interconnected by a
bewildering array of complex economic transactions, social and
environmental problems, and international political collaborations and
conflicts.

The spectacular emergence of China as a major exporter of

manufactured goods has affected wages in both rich and poor countries. As
large corporations, such as Microsoft, Intel, Toyota, General Electric, and
Siemens have expanded their investments in affiliates in many nations
around the world, they have built global production networks that share
technological knowledge across locations to produce increasingly complex
goods that could be sold anywhere. Today, a major cultural product, such
as a Hollywood movie or a jazz band‟s latest compact disk, is likely to
employ creative personnel from around the world, with various components
of the product recorded, mixed or edited in different locations.
Sources of Globalization

The concept of globalization has numerous definitions, depending on

the subject matter being explained. To international economists it has a
simple definition, albeit one with powerful implications. Specifically,
globalization occurs when the markets of different countries become more
integrated and interconnected through economic transactions that cross
national borders. These transactions can be in real merchandise, various
forms of services, financial instruments, investments in local production
facilities by multinational firms (a process called foreign direct investment,
or FDI), temporary and permanent labor migration, and technological
information. They can involve individuals, trade between unrelated firms,
transactions within international enterprises, and governments.

Channels of Globalization

Falling trade barriers and increasing access to new forms of

technology have expanded the possibilities for international transactions of
all kinds. In this section we examine trends in the major forms of
transactions: international trade in goods and services, portfolio capital
flows, foreign direct investment, contracts for technology and labor
migration. These are the fundamental means by which citizens and firms of
different nations interact with each other economically. They are, therefore,
the basic conduits through which integration of markets ties countries more
closely together.

International Trade

Much of this textbook is concerned with explaining theories of how

countries and firms 7 trade, what types of goods they exchange, and the
effects of those activities. To motivate this analysis, consider some basic
data on the foreign trade volumes and patterns for selected countries.

These figures demonstrate that for most countries the last three
decades have been a period of substantial growth in the importance of
international trade. In the United States, for instance, commodity trade grew
from 17 percent to 23 percent of GDP. In turn we can conclude that
considerably larger shares of employment, income and consumption are now
associated with foreign commerce than was true in 1980. In Canada this
ratio rose from 48 to 61 percent. The difference in these two countries is
easily explained in terms of market size, which is a key factor in explaining
trade volumes.

Foreign Direct Investment and Technology

While the growth in international trade since 1980 is impressive, the

expansion of foreign direct investment through the global operations of
multinational enterprises is what really stands out. Which show the ratios
of FDI stocks to GDP in 1980 and In this case revealed comparative
advantage (RCA) is calculated as the ratio of a nation ‟s sectoral exports,
such as transport equipment, divided by total exports, with that ratio
divided by the similar ratio of sectoral imports to total imports. This
adjustment essentially neutralizes the fact that if an economy has a large
overall trade deficit, for example, that fact will tend to reduce exports
relative to imports in all sectors. Thus, a simple comparison across
industries of the export-import ratio will be misleading. If the RCA exceeds
unity it indicates that in that sector the economy has larger than average
net exports, suggesting the economy has an export specialization in the
industry. If it is less than unity the sector displays larger than average net
imports, or comparative disadvantage.

International Labor Migration

The period since 1980 has also seen a substantial increase in global
labor migration. We present figures for four major destination countries on a
standard measure of the international integration of people: the share of
population that was born elsewhere. We see immediately the effect of
significant inward migration in the United States, with the foreign-born
population share rising from 6.2 percent to 12.6 percent. These people come
from all over the world but in recent decades the largest shares have come
from Central America and the Caribbean, Eastern Europe, East Asia and
South Asia. They differ in their characteristics, ranging from relatively
unskilled workers entering construction, agricultural and retail jobs, to
highly trained medical personnel and software engineers. Most enter legally
under certain visa categories, while many illegal entrants may cross the
border multiple times during a year. Nearly all seek higher incomes than
they earn at home, though some migrants are political refugees and some
come to join family members.

Effects of Globalization

This major expansion in the exposure of economies to international

transactions is highly controversial precisely because it has substantial
impacts on both the well-being of countries and the welfare of individuals
within nations. It also fundamentally alters the ways in which societies use
resources and make decisions. In this section we highlight some of these
impacts in broad terms, leaving analytical treatments to later chapters.

Economists profess almost universal support for free trade, or the

complete opening of markets to foreign competition through trade and
investment. This attitude comes from the basic logic of competition: free and
open trade pushes countries to specialize their resources in those industries
and goods where they are relatively most productive. In turn, this
specialization generates greater national output and income through trade
than would be possible for countries that remain isolated. Just think, for
example, how much poorer the United States would be if each individual
state were walled off from trading with other states. Florida would have to
produce its own wheat and Nebraska its own oranges, or else they would go
without.

Characteristics of Globalization

1. Globalization is Not a New, Western Concept:

When ancient Indian scriptures mentioned “Vasudhaiva

Kutumbakam”, they had already viewed the world as a small global village
of linked families. When our grandmother started her stories with “Saat
samundar paar…”, she also meant that we are not alone in this Universe,
and the world is cohabited by others too at far off places.

2. Globalization is Basically a „Mindset‟:

Usually, Globalization is seen as another economic theory to enhance

business & trade. It must be understood that Globalization is basically a
mindset that is ready to encapsulate the whole universe into its scheme of
things; a mindset that is broader & open to receive all ideas; that takes the
whole globe as an area of operation.

3. Globalization is an Opportunity:

It is often feared that the implementation of Globalization will open up

our domestic economy for foreign competition, thereby endangering
economic progress & survival of local firms. While it does open our markets
for entry of multinationals, it also opens all other markets in the whole
world for our products & services too. Why can‟t it be seen as an
opportunity to scale up our operations globally?

4. Globalization means “Interdependence”:

We have all grown reading history wherein either a country is

independent or a slave of another country. With the advent of Globalization,
it has been understood that no country can be said to be totally
independent, not needing anything from any other country. Hence, a culture
of interdependence has been established between nations.

5. Globalization means “Caring & Sharing”:

The world today is more united and concerned about common

problems being faced by the people- be it global warming, terrorism, or
malnutrition etc. natural disasters faced or atrocities encountered at any
part of the world attract immediate attention all over.
6. Globalization puts Technology in Service of Mankind:

The world would not have shrunk into a small global village without
the support of technological innovations like Computers, Internet,
Telecommunication, E-Commerce etc. Thus, technology has proved to be the
major source of the concept of Globalization, and for bringing people nearer.

7. Globalization is Inevitable & Irreversible:

There have been attempts by fundamentalist forces all over the world
to oppose and stop the process of Globalization over past quarter century.
Yet, despite differences in political ideologies, the ruling parties have gone
ahead with implementation of Globalization policies. It is rightly said, “You
can’t stop the advent of an idea whose time has come”. Globalization is
one such idea.

8. Globalization has Linked Politics with Economics:

Earlier, political ideologies and relations between nations have

determined the fate of people over centuries; with economics being
subservient to politics. However, in the new era, it is the economics,
employment generation and public welfare that determine the need &
strength of relations between nations.

9. Globalization means Raised Standards of Living:

With consumers having more choice to pick quality items at right

price, and with no boundary restrictions on flow of goods & services, the
markets have turned from „Sellers Market‟ to „Buyers Market ‟. This has
helped in raising the standard of living for vast populations across the
world. It has also raised aspirations among billions of people to upgrade
their lifestyles.

10. Globalization Demands and Respects Excellence:

With global level opportunities available to all the countries, the field
is wide open for the excellent companies, products and people from any
remote part of the world to showcase their excellence and win over markets
and contracts. There is pressure on everyone to continuously improve to
meet the raised bar of expectations.

Conclusion:

Thus, it is amply clear that, if taken in the right spirit, the concept &
practices of Globalization will help us in improving our lives and
productivity. We can still keep our nation back by harping upon the
outdated ideologies that have become obsolete even in the regions where
invented. Or, we can equip ourselves to take maximum advantage of
opportunities thrown open by Globalization and help our country to realize
its true potential. The choice is ours.

Activity # 1

Define the importance of Globalization in economy of every country also its

big impact in every culture. Write your answer below.

Assessment:

Explained the following Characteristics of Globalization. Write you

answer on the other side of the Box.

Characteristics of
Globalization

1. Globalization is an
Opportunity:

2. Globalization puts
Technology in Service of
Mankind

3. Globalization is
Inevitable & Irreversible
 4. Globalization has
Linked Politics with
Economics

5. Globalization means
Raised Standards of
Living
 SECOND YEAR COLLEGE

THE CONTEMPORARY WORLD

QUARTER 1: WEEK 2:
Defining Globalization

NAME: YEAR & SECTION:

 Lesson 2
Defining Globalization

Objectives:

1. Define the Globalization

2. Understand the History of Globalization
3. Identify the establishment that helps to grow the Globalization after the
WW2
4. Know the meaning of Globalization in other industries
5. Identify the Value of Goods , Products and Services in Trading industries

Pre-Test

MATCHING TYPE
Direction: Identify the following by choosing the best answer inside the box.

Deforestation Ecosystem Biodiversity Plastic

ServicesPollution
Transportation Goods Technology
Economy Geography

1. Refers to the decrease in forest areas across the world

that are lost for other uses such as agricultural
croplands, urbanization, or mining activities.
2. A system supplying a public need such as transport,
communications, or utilities such as electricity and
water.
3. Is a community or group of living organisms that live
in and interact with each other in a specific
environment.
4. Study of places and the relationships between people
and their environments.
5. The movement of goods and persons from place to
place.
6. Refers to the variety of life on Earth at all its levels,
from genes to ecosystems, and can encompass the
evolutionary, ecological, and cultural processes that
sustain life.
7. Refer to basically anything that is sold, traded,
imported, or exported.
 8. The most widespread problem affecting the marine
environment. It also threatens ocean health, food
safety and quality, human health, coastal tourism,
and contributes to climate change.
9. Study and transformation of techniques, tools, and
machines created by humans.
10. The wealth and resources of a country or region,
especially in terms of the production and
consumption of goods and services

Defining Globalization

Globalization is the word used to describe the growing

interdependence of the world‟s economies, cultures, and populations,
brought about by cross-border trade in goods and services, technology, and
flows of investment, people, and information. Countries have built economic
partnerships to facilitate these movements over many centuries. But the
term gained popularity after the Cold War in the early 1990s, as these
cooperative arrangements shaped modern everyday life.

The History of Globalization Is Driven By Technology, Transportation,

And International Cooperation

Since ancient times,

humans have sought distant
places to settle, produce, and
exchange goods enabled by
improvements in technology and
transportation. But not until the
19th century did global
integration take off. Following
centuries of European
colonization and trade activity,
that first “wave” of globalization
was propelled by steamships,
railroads, the telegraph, and other breakthroughs, and also by increasing
economic cooperation among countries. The globalization trend eventually
waned and crashed in the catastrophe of World War I, followed by
postwar protectionism, the Great Depression, and World War II.

After World War II in the mid-1940s, the United States led efforts to revive
international trade and investment under negotiated ground rules, starting
a second wave of globalization, which remains ongoing, though buffeted by
periodic downturns and mounting political scrutiny.
 Many countries have large international financial flows or
investments, consisting of assets and liabilities. These include FDI,
securities (which are bought and sold), and debts. They are generally held by
or owed to firms, banks and other financial institutions, or governments.
This chart shows how yearly US transactions grew over time as the global
economy and financial system became increasingly integrated but dropped
dramatically during the global financial crisis of 2008–09. (Total US foreign
assets in 2016 were $26 trillion, equal to 140 percent of US GDP. Total US
liabilities to foreigners were $34 trillion in 2016, or 185 percent of GDP.)

This chart shows how FDI has

grown steadily while the growth of
portfolio holdings (foreign equity or foreign
debt) and “other” assets (which are largely
composed of bank loans) has been more
volatile. Reserves are international assets
held by the US government.
This chart shows the collapse of financial
inflows to South Korea during two periods, the
1997–98 Asian financial crisis and the global
financial crisis of 2008–09, especially in “other
liabilities” like bank loans. Korea was hit in
2008–09 even though the epicenter of the crisis
was in the United States and Europe.

Globalization as A Tool For Prosperity and Peace

After World War II, the United States helped build a global economic
order governed by mutually accepted rules and overseen by multilateral
institutions. The idea was to create a better world with countries seeking to
cooperate with one another to promote prosperity and peace. Free trade and
the rule of law were mainstays of the system, helping to prevent most
economic disputes from escalating into larger conflicts. The institutions
established include:

Effects of

Globalization More Goods at Lower Prices

Globalization encourages each country to specialize in what it

produces best using the least amount of resources, known as comparative
advantage. This concept makes production more efficient, promotes
economic growth, and lowers prices of goods and services, making them
more affordable especially for lower-income households
Scaled Up Businesses

Larger markets enable companies to reach more customers and get a

higher return on the fixed costs of doing business, like building factories or
conducting research. Technology firms have taken special advantage of their
innovations this way.

Better Quality and Variety

Competition from abroad drives US firms to improve their products.

Consumers have better products and more choices as a result.

Innovation

Expanded trade spurs the spread of technology, innovation, and the

communication of ideas. The best ideas from market leaders spread more
easily.

A Simple Globalization Definition

Globalization means the speedup of movements and exchanges (of

human beings, goods, and services, capital, technologies or cultural
practices) all over the planet. One of the effects of globalization is that it
promotes and increases interactions between different regions and
populations around the globe.

An Official Definition of Globalization by the World

Health Organization (WHO)

According to WHO, globalization can be defined as ” the increased

interconnectedness and interdependence of peoples and countries. It is
generally understood to include two inter-related elements: the opening of
international borders to increasingly fast flows of goods, services, finance,
people and ideas; and the changes in institutions and policies at national
and international levels that facilitate or promote such flows.”

What Is Globalization in the Economy?

According to the Committee for Development Policy (a subsidiary

body of the United Nations), from an economic point of view, globalization
can be defined as the increasing interdependence of world economies as a
result of the growing scale of cross-border trade of commodities and
services, the flow of international capital and the wide and rapid spread of
technologies. It reflects the continuing expansion and mutual integration of
market frontiers and the rapid growing significance of information in all
types of productive activities and marketization are the two major driving
forces for economic globalization.”

What Is Globalization in Geography?

In geography, globalization is defined as the set of processes

(economic, social, cultural, technological, institutional) that contribute to
the relationship between societies and individuals around the world. It is a
progressive process by which exchanges and flows between different parts of
the world are intensified.

When Did Globalization Begin? The History of Globalization

For some people, this global

phenomenon is inherent to human nature.
Because of this, some say globalization
begun about 60,000 years ago, at the
beginning of human history. Throughout
time, human societies‟ exchanging trade has
been growing. Since the old times, different
civilizations have developed commercial
trade routes and experienced cultural
exchanges. And as well, the migratory
phenomenon has also been contributing to
these population exchanges

This phenomenon has continued throughout history, notably through

military conquests and exploration expeditions. But it wasn ‟t until
technological advances in transportation and communication that
globalization speeded up. It was particularly after the second half of the
20th century that world trades accelerated in such a dimension and speed
that the term “globalization” started to be commonly used.

Examples of Globalization (Concept Map)

Because of trade developments and financial exchanges, we often think of

globalization as an economic and financial phenomenon. Nonetheless, it
includes a much wider field than just flowing of goods, services or capital.
Often referred to as the globalization concept map, some examples of
globalization are:
 Economic globalization: is the development of trade systems within
transnational actors such as corporations or NGOs;
Financial globalization: can be linked with the rise of a global
financial system with international financial exchanges and monetary
exchanges. Stock markets, for instance, are a great example of the
financially connected global world since when one stock market has a
decline, it affects other markets negatively as well as the economy as a
whole.
Cultural globalization: refers to the interpenetration of cultures
which, as a consequence, means nations adopt principles, beliefs, and
costumes of other nations, losing their unique culture to a unique,
globalized supra-culture;
Political globalization: the development and growing influence of
international organizations such as the UN or WHO means
governmental action takes place at an international level. There are
other bodies operating a global level such as NGOs like Doctors
without borders or Oxfam;
Sociological globalization: information moves almost in real-time,
together with the interconnection and interdependence of events and
their consequences. People move all the time too, mixing and
integrating different societies;
Technological globalization: the phenomenon by which millions of
people are interconnected thanks to the power of the digital world via
platforms such as Facebook, Instagram, Skype or Youtube.
Geographic globalization: is the new organization and hierarchy of
different regions of the world that is constantly changing. Moreover,
with transportation and flying made so easy and affordable, apart
from a few countries with demanding visas, it is possible to travel the
world without barely any restrictions;
Ecological globalization: accounts for the idea of considering planet
Earth as a single global entity – a common good all societies should
protect since the weather affects everyone and we are all protected by
the same atmosphere. To this regard, it is often said that the poorest
countries that have been polluting the least will suffer the most from
climate change.

The Benefits of Globalization

Globalization has benefits that cover many different areas. It
reciprocally developed economies all over the world and increased cultural
exchanges. It also allowed financial exchanges between companies, changing
the paradigm of work. Many people are nowadays citizens of the world. The
origin of goods became secondary and geographic distance is no longer a
barrier for many services to happen.
The Negative Effects of Globalization on Cultural Loss

Apart from all the benefits globalization has had on allowing cultural
exchanges it also homogenized the world‟s cultures. That ‟s why specific
cultural characteristics from some countries are disappearing.
From languages to traditions or even specific industries. That ‟s why
according to UNESCO, the mix between the benefits of globalization and the
protection of local culture‟s uniqueness requires a careful approach.

The Economic Negative Effects of Globalization

Despite its benefits, the economic growth driven by globalization has

not been done without awakening criticism. The consequences of
globalization are far from homogeneous: income inequalities, disproportional
wealth and trades that benefit parties differently. In the end, one of the
criticisms is that some actors (countries, companies, individuals) benefit
more from the phenomena of globalization, while others are sometimes
perceived as the “losers” of globalization. As a matter of fact, a recent report
from Oxfam says that 82% of the world‟s generated wealth goes to 1% of the
population.

The Negative Effects of Globalization on the Environment

Many critics have also pointed out that globalization has negative
effects on the environment. Thus, the massive development of transport that
has been the basis of globalization is also responsible for serious
environmental problems such as greenhouse gas emissions, global warming
or air pollution.

At the same time, global economic growth and industrial productivity

are both the driving force and the major consequences of globalization. They
also have big environmental consequences as they contribute to the
depletion of natural resources, deforestation and the destruction
of ecosystems and loss of biodiversity. The worldwide distribution of goods is
also creating a big garbage problem, especially on what concerns plastic
pollution.

Assessment:

IDENTIFICATION
Direction: Identify the following statement. Write your answer on the
space provided below.

1. Used to describe the growing interdependence of the world‟s

economies, cultures, and populations, brought about by
 cross-border trade in goods and services, technology, and
flows of investment, people, and information.

2. Globalization encourages each country to specialize in what it

produces best using the least amount of resources, known
as comparative advantage

3. Expanded trade spurs the spread of technology, innovation,

and the communication of ideas. The best ideas from market
leaders spread more easily.

4. According to them, the globalization can be defined as the

increased interconnectedness and interdependence of peoples
and countries.

5. Globalization can be defined as the increasing

interdependence of world economies as a result of the growing
scale of cross-border trade of commodities and services

6. To them, globalization is defined as the set of processes

(economic, social, cultural, technological, institutional) that
contribute to the relationship between societies and
individuals around the world.

7. This refers to the interpenetration of cultures which, as a

consequence, means nations adopt principles, beliefs, and
costumes of other nations

8. The massive development of transport that has been the

basis of globalization is also responsible for serious
environmental problems such as greenhouse gas
emissions, global warming or air pollution.
9. The development of trade systems within transnational actors
such as corporations or NGOs.

10. Larger markets enable companies to reach more customers

and get a higher return on the fixed costs of doing business,
like building factories or conducting research

Assignment:

Attach the following pictures of Products/Goods that are used for

international Trade inside the chart, and kindly write the name and Country
were that products represent.
Reflection:

On your Notebook write your personal Insight about this lesson using
the prompts below.

I learned that .

I understand that .

I realized that .

Reference:

https://youmatter.world/en/definition/definitions-globalization-definition-
benefits-effects-

examples/#:~:text=Globalization%20means%20the%20speedup%20of,and%
20populations%20around%20the%20globe.

https://spot.colorado.edu/~maskus/teach/4413/ch1-new.pdf