MARKET INTEGRATION

History of Global Market Integration

• Before the modern economy, people
produced only for their families. But as
the world gain more demands from the
growing population, economy required
from various sectors to work together to
produce, distribute, and exchange goods
and services.
• We need to know also what caused the
shift in the way people produce for their
needs.
• But let’s be aware first of the definition
of market integration.
• Market integration refers to how:
 two or more markets can trade with each other.
 In case of high integration, it means that there is low barriers
on trade as well as prices are similar in the two markets.
 In case of low integration, high barriers to trade as well prices
fluctuate between these markets.
 Foreign trade helps the integration of markets because it
reduces barriers to trade and increases fluidity between
markets. As foreign trade increases, the price will go down
until it reaches the price which is in the original market from
where the trade has been made.
(Invincible Web Solutionshttps://www.quora.com/What-is-market ntegration)
Economy is a very vital part of a
household, society, country, and the
whole world system. It is important to
note that though economy is thought of
numbers, it is composed of people.
They or we are the organizers,
producers, traders, and consumers of
the goods and services in the local and
global community (Aldama, 2018).
To better understand economy, we could see the production division is
divided into four sectors:
Primary sector – extraction of raw materials (e.g. mining,
fishing and agriculture).

Secondary sector – manufacturing/ producing finished goods

(e.g. Construction sector, manufacturing, and utilities, e.g.
electricity).

Tertiary sector – concerned with offering intangible goods

and services to consumers. (e.g. retail, tourism, banking,
entertainment and  I.T. services).

Quaternary sector - knowledge/intellectual economy

(education, media, consultation firms, research and
development, and even blogging)
 From the history of global market integration, we could
see the big economic changes. These are the following:

A. Agricultural Revolution (AR)

There were three agricultural revolutions that changed
history:
• The First AR was the transition from hunting and gathering to
planting and sustaining.
 
• The Second AR increased the productivity of farming through
mechanization and access to market areas due to better
transportation.

• The Third AR involved hybridization and genetic engineering

of products and the increased use of pesticides and fertilizers. 

(https://docs.google.com/document/d/1CTQqJ-OSX4uJP-Jge-
x67RSmHX5LUERpWL-KAdhn82s/edit )
• Terms that We Need to Come to Terms
with

• Agriculture: The raising of animals or

the growing of crops on tended land to
obtain food for primary consumption by
a farmer’s family or for sale off the farm.
• Farming: The methodical cultivation of
plants and/or animals. 
• Hunting and gathering: The first way
humans obtained food. Nomadic groups
around the world depended on
migratory animals, wild fruit, berries,
and roots for sustenance. 
• Agricultural mechanization has been
defined in a number of ways by different
people. Perhaps the most appropriate
definition is that it is the process of
improving farm labour productivity
through the use of agricultural
machinery, implements and tools
• Hybridization is the process of an
animal or plant breeding with an
individual of another species or variety
• Genetic Engineering deliberate
modification of the characteristics of an
organism by manipulating its genetic
material.
• B. Industrial Revolution (IR)
This second economic revolution gave rise
to the industry for tools, such as steam
engines and mechanization of
production. Partial automation using
memory-programmable controls and
computers. This revolution reached our
present era automate an entire
production process - without human
assistance. Known examples of this are
robots that perform programmed
sequences without human intervention.
Just like the AR, this revolution went
through phases.
1st Industrial Revolution
This began in the 18th century, through the use of
steam power and mechanisation of production.
What before produced threads on simple spinning
wheels, the mechanised version achieved eight times
the volume in the same time.
The use of steam power for industrial purposes was
the greatest breakthrough for increasing human
productivity. Instead of weaving looms powered by
human muscle, steam-engines could be used for
power. Developments such as the steam ship or (some
100 years later) the steam-powered locomotive brought
about further massive changes because humans and
goods could move great distances in fewer hours.
2nd Industrial Revolution
The Second Industrial Revolution began in the 19th
century through the discovery of electricity and assembly line
production. Henry Ford (1863-1947) was known for his idea of
mass production from a slaughterhouse in Chicago: The pigs
hung from conveyor belts and each butcher performed only a
part of the task of butchering the animal. Henry Ford carried
over these principles into automobile production and
drastically altered it in the process. While before one station
assembled an entire automobile, now the vehicles were
produced in partial steps on the conveyor belt - significantly
faster and at lower cost.
3rd Industrial Revolution
The Third Industrial Revolution began in the ’70s in the 20th
century through partial automation using memory-programmable
controls and computers. Since the introduction of these
technologies, we are now able to automate an entire production
process - without human assistance. Known examples of this are
robots that perform programmed sequences without human
intervention.

The smart home concept started with the invention of

remote controls, unveiled by Nikola Tesla in 1898
.
4th Industrial Revolution
At present, we are implementing the Fourth Industrial
Revolution.This is characterised by the application of
information and communication technologies to industry
and is also known as "Industry 4.0". It builds on the
developments of the Third Industrial Revolution.
Production systems that already have computer technology
are expanded by a network connection and have a digital
twin on the Internet so to speak. These allow
communication with other facilities and the output of
information about themselves. This is the next step in
production automation. The networking of all systems
leads to "cyber-physical production systems" and therefore
smart factories, in which production systems, components
and people communicate via a network and production is
nearly autonomous.
In a capsule of the Industrial Revolutions:
C. Information Revolution (Info Rev)
The information revolution led us to the
age of the internet, where optical
communication networks play a key role in
delivering massive amounts of data. The world
has experienced phenomenal network growth
during the last decade, and further growth is
imminent. The internet will continue to expand
due to user population growth and internet
penetration: previously inaccessible
geographical regions in Africa and Asia will
come online. Network growth will only be
accelerated by improvements in
integrated circuits. Transistor size has been
halved every two years since the middle of the
last century. The new internet-based global
economy requires a worldwide network with
high capacity and availability, which is currently
limited by submarine optical
communication cables.
See:
Task 5 Economic Revolutions and
Innovations’ Positive-Negative Effects in BB
Course Content.