Definition of Globalisation:
via: Financial Times
This is the integration of economies, industries, markets, cultures and policy-making around the world. [1]
Globalisation describes a process by which national and regional economies, societies, and cultures have become integrated through the global network of trade, communication, immigration and transportation.
In the more recent past, globalisation was often primarily focused on the economic side of the world, such as trade, foreign direct investment and international capital flows, more recently the term has been expanded to include a broader range of areas and activities such as culture, media, technology, socio-cultural, political, and even biological factors, e.g. climate change.
After the fall of the Berlin Wall, some talked about the rise of a “one world way” of doing business and living, but more recent events have suggested that those thoughts were misplaced as we see the success of a number of varying economic and national systems.
In the more recent past, globalisation was often primarily focused on the economic side of the world, such as trade, foreign direct investment and international capital flows, more recently the term has been expanded to include a broader range of areas and activities such as culture, media, technology, socio-cultural, political, and even biological factors, e.g. climate change.
After the fall of the Berlin Wall, some talked about the rise of a “one world way” of doing business and living, but more recent events have suggested that those thoughts were misplaced as we see the success of a number of varying economic and national systems.
ExampleGlobal trade has grown enormously since WWII, international trade in manufactured goods alone has grown an estimated 100 times from $95 billion to $12 trillion in the 50 years since 1955. However, globalisation is much more than just trade.
In the last twenty years the breadth and depth of links between nations and between regions has grown enormously. Communications costs have declined dramatically allowing easy daily contact via the web and telephone, enabling the outsourcing of IT and other services, to India for example, and the rise in global work teams.
Other critical links are immigration and transportation, particularly airlines. The International Organisation for Migration estimates that there are two hundred million migrants around the world today, they have largely immigrated from the emerging to the developed countries, particularly to the U.S., Canada, Australia, the U.K. and Continental Europe. Though there are tensions at times in Europe and elsewhere this immigration has changed the face of these regions and increased the personal links across borders very considerably.
Finally the transportation of people and goods has increased very substantially in the last few decades with great growth on the number of flights across borders. During the 80s and 90s growth rates in the number of airlines seats offered of 5% a year were not uncommon, in 2010 there are over 2.3 million flights per month. With this great growth in flights, this has allowed stronger business and personal links. Today we see a world much more interlinked than in the past. [2]
In the last twenty years the breadth and depth of links between nations and between regions has grown enormously. Communications costs have declined dramatically allowing easy daily contact via the web and telephone, enabling the outsourcing of IT and other services, to India for example, and the rise in global work teams.
Other critical links are immigration and transportation, particularly airlines. The International Organisation for Migration estimates that there are two hundred million migrants around the world today, they have largely immigrated from the emerging to the developed countries, particularly to the U.S., Canada, Australia, the U.K. and Continental Europe. Though there are tensions at times in Europe and elsewhere this immigration has changed the face of these regions and increased the personal links across borders very considerably.
Finally the transportation of people and goods has increased very substantially in the last few decades with great growth on the number of flights across borders. During the 80s and 90s growth rates in the number of airlines seats offered of 5% a year were not uncommon, in 2010 there are over 2.3 million flights per month. With this great growth in flights, this has allowed stronger business and personal links. Today we see a world much more interlinked than in the past. [2]
Themes within Globalisation predominantly include:
-Cultural
-Democratic
-Economic
-Historical
Notes:
Globalisation is basically the integration and diffusion of the world in terms of society, trade, economics, culture, travel, technology and much more.
A huge factor in globalisation is the ease of communication and travel - with the overarching steep development of technology in the last 50 years contributing to this greatly with the computer, the internet and air travel which rose in popularity after second world war in the 50s and 60s.
In the last 20 years the links and communication between different countries and trade has shot up dramatically, while costs have shot down dramatically with things such as e-mail replacing letters and internet and face-time replacing flights.
Tourism has increased dramatically, allowing people to experience and overlap with different cultures, creating a much more culturally variable population - especially in tourist hotspots and developed countries. These varieties in backgrounds and cultures are a farcry from 50 years ago - and surely affects design styles and influence. (look into cultural demographics in developed countries today from 50 years ago)
Most migrants enter the developed regions of the world, Europe, UK, US, Canada, Australia etc. These also historically have happened to be where most of the graphic design development and celebrated styles have originated from - perhaps as most development and experimentation happened in these regions as design is still seen as more of a luxury than a necessity.
The most culturally diffused and influenced countries by Globalisation are historically the most diverse and notable countries in individual design styles and intentions so this is a huge factor and surely a change in course.
A huge factor in merging cultures and bring the world closer is the internet. It's worth looking into internet usage now, and comparing to countries with the most migration and seen as "developed countries" these are the countries most affected by globalisation ,particularly in cultrue and trade. Then compare this to more rural and undeveloped and perhaps unaffected regions such as Africa and look into change in cultural demographics there.
Language. More and more English is seen as the 'world language'. More and more of the world is speaking it than ever before, also a side-effect of Globalisation and it's many facets. This is leading to language shift and even language death.
Language Shift - is where the real dialect and intricacies of a langauge slowly start to die out as competency becomes less and less over a series of generations, due to influence of other languages and dialects. Eventually can just die out. An example is Latin. Which developed into the Romanic languages such as Spanish, French, Italian etc.
China's abandonment of communism in the late 80s and early 90s and willingless to enter world markets and trade with their populations willingness to work for a super low wage has had a huge effect on globalisation and China's own highly westernised culture. With many large corporations outsourcing labour to the Far East.
Lower costs of production meant luxury items such as TV's, Computers, Stereos etc plummeted in costs. Further giving the west and the 'developed' countries more entertainment and goods but to also further connect and culturally diffuse people.
Capitalism - an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.
Privatisation became common practice across Europe and Far East after drop of Berlin Wall in 89.
Liberalisation = the act of making less strict. Less guidelines and more relaxed and manipulatable.
Over the past 30 years international trade has grown almost twice as fast the global economy
China, which in 2010 overtook Japan as the world’s second-largest economy by GDP, is forecast to replace the US as number one in the next 15 years or so.
By 2050, the top five are likely to be China, India, the US, Brazil and Russia.
In 1900, there were only 500,000 students in the world; today, the figure is 100 million.
From less than 1 percent, to 20 percent of the world being school-leavers.
Even education and peoples experience of school and college life are increasing with online college education and courses rising in prominence and quality, with only a matter of time before they are as strong as a normal college in terms of curricular and support.
People who can speak English in countries such as Pakistan, Rwanda and Nigeria on average earn 25% more than their counterparts just because they can speak English, such is the widespread influence of English in todays world.
There's always anecdotes how people from across the world learnt how to speak English by watching John Wayne movies etc.
Jean-Paul Nerrière, a French former IBM executive who observed at many meetings that native English speakers were misunderstood and talked to fast and weren't as clear as others who were perhaps less informed on English in international meetings,
Nerrier promoted what he called Globish, composed of 1,500 English words he said were perfectly adequate for business purposes.
Could English one day be replaced with another language? For example a universal language the whole world speaks - surely this will be easier and further reinforce the growing evidence of a diffused and combined world?
Globalisation
-
Martin Wolf
Source
Great introduction and introduction into the widespan reach of globalism and it's effect on the worlds trade and economy by Financial Times - as mentioned in the first paragraph, a huge factor in todays globalisation is the development of technology and communication tools.
Before delving deeper into the various facets and subcategories within Globalisation I need to completely get to grips with exactly what it is and a more holistic view of Globalisation and it's impact on countries, trade and relationships - a key word in my research project.
June 13, 2013 12:07 am
Globalisation
Overview by Martin Wolf
Globalisation is the great economic theme of the past three decades, affecting not just business but much of the world as a whole. Behind it are technical factors such as the revolution in information and communications technology, and market-oriented liberalisation – principally of trade and finance but also to some extent of movement of people.
Globalisation has created huge increases in prosperity, notably in emerging markets, above all in China. It has reshaped the activities of business, creating integrated chains of innovation, production, marketing and distribution. Yet it has also caused huge stresses as production has shifted to low-wage economies, “winner-takes-all” markets have increased inequality and destabilising speculation has unleashed huge global financial crises.
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In response, the financial sector is being re-regulated. New currents in post-crisis regulation risk balkanising the global banking industry.
Even the impulse towards trade liberalisation has slowed, though not yet reversed, as unemployment has soared in high-income countries gripped by the global and eurozone financial crises.
Some might fear a collapse of this era of globalisation, as happened in the late 19th and early 20th centuries. Yet the position today is not so dire. What we are seeing, instead, are inevitable tensions between two powerful forces.
On the one hand, the market economy seeks opportunities across national borders. Most manufacturing, finance and any service that can be digitised are highly tradable. On the other hand, political institutions, regulatory frameworks and human loyalties are national or even local. Destabilising this uneasy balance has been a loss of trust in the justice and efficiency of the market economy.
The 1980s and 1990s saw the collapse of Soviet communism and the abandonment of state planning in China and India; the completion of the Uruguay Round of trade negotiations, which incorporated emerging countries into the trading system; abandonment of exchange controls in almost all high-income countries and many emerging economies; privatisation of state-owned enterprises; and the emergence of a mass consumer market across the globe.
This was the heyday of market optimism, unleashed by the US and the UK and, more importantly (and more pragmatically), China and India. Since then, financial crises have undermined such easy confidence. The Asian crisis made many emerging economies wary of the embrace of global market forces. The crisis in the high-income countries is now doing the same to them.
Yet the forces driving globalisation remain powerful. They include the rise of English as a world language; the cross-border movements of people seeking better education and jobs; the rise of a planetary economic and business elite running global companies and living in global hub cities; and the trans-border flows of ideas, including religion.
The backlash against globalisation is also real, though. The desire to regulate markets more tightly, reduce inequalities and achieve a greater measure of personal economic security are all potent.
The outcome will probably be a complex balance of globalisation and regulation. The glad, confident morning of the global market economy has passed into a cloud-covered day.
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Government regulation
In classic economics, the “tragedy of the commons” is the proposition that individuals acting in their own self-interest will foul or deplete shared resources,writes Brooke Masters. Outside intervention, the theory goes, is necessary to protect the things that benefit everyone but are owned by no one.
The late 19th century provided dramatic demonstration of the principle as rapid industrialisation transformed Europe and North America. Innovations flourished and vast fortunes were made – but pollution fouled the air, workers had to toil in appalling conditions and dangerous products were foisted on an unwary public.
The catastrophic 1911 Triangle Shirtwaist factory fire in New York led to a wholesale revamping of occupational safety regulations, and other worker and consumer protection rules followed. Oil, financial and railroad monopolies inspired the creation of competition authorities.
The Depression then sparked comprehensive financial reforms. That has been echoed more recently, with tough new regulations aimed at preventing a repeat of the 2008 bank collapses. The financial services sector is also being reshaped by tougher enforcement of existing regulations, especially against market abuse and mis-selling of retail products.
The proliferation of regulation does have downsides. Most rules increase costs and make it harder for new businesses to start. Participants in regulated markets can also become overdependent on the rules.
. . .
China’s adoption of market economics
To many outside China, the country’s impressive economic growth over the past three decades is the natural result of a decision to abandon Communism and adopt free-market economics, writes Jamil Anderlini.
But that decision was never made, and to this day China’s increasingly capitalist leaders speak reverentially about Marxist-Leninist Mao Zedong thought and refer to their system as “socialism (with Chinese characteristics)”.
One of the most transformative global developments of recent decades is still not fully acknowledged by those who made it happen. The future of that experiment remains a topic of debate at the highest levels of China’s authoritarian political structure.
“The ambivalence of the leadership has led to a messy stir-fry of Leninism and a market economy,” says Leslie Young, professor of economics at Cheung Kong Graduate School of Business in Beijing. “Allowing the ruling hierarchy to make money while maintaining nostalgia for Marxism has resulted in the party never fully legitimising the assets they control as private property.”
It all began in 1978 when the old Communist guerrilla Deng Xiaoping solidified his grip on the party and launched a modernisation programme following the death of Mao and the end of the disastrous cultural revolution.
In explaining his adoption of what were effectively capitalist ideas, Deng is said to have told comrades: “It doesn’t matter whether the cat is black or white, as long as it catches rats.”
But right up to his death in 1997 he faced staunch opposition from conservative hardliners in the party and neither he nor his successors ever stopped describing the system as “socialist”.
The first steps in what became known as “reform and opening” were taken in the countryside, where tens of millions had died in the great leap forward of the late 1950s as Mao collectivised the land and forced peasant farmers to produce steel.
Beginning in the late 1970s, the party broke up the communes and allowed households to farm their own plots of land. Peasant farmers and state factories were allowed to sell anything they produced beyond state quotas – and private businesses began to flourish.
This continued throughout the 1980s, but it was in the wake of the 1989 massacre of protesters in Beijing’s Tiananmen Square and the demise of the Soviet Union that the isolated and uncertain Chinese leadership launched privatisation and price reforms, adopting market economics in practice, if not name.
The sudden inclusion of one-fifth of humanity into the global labour market and the willingness of those new workers to toil for a pittance has been one of the most fundamental shifts in the world economy. Particularly in high-cost developed economies, observers described a giant sucking sound as manufacturing jobs went to China.
On the other hand, the cost to western consumers of everything from televisions to T-shirts plummeted as China became the workshop of the world.
As China produced more and more of the world’s goods it developed a seemingly insatiable appetite for raw materials. By the mid-1990s it became a net importer of oil and other industrial commodities, driving the commodity supercycle of the past decade.
But the trend towards an open market economy and integration into the global system has not been entirely smooth. Most economists believe China’s export-oriented, investment-intensive growth model is running out of steam and that the country stands at a crossroads.
Famed Chinese economist and free market advocate Wu Jinglian has said China must either launch bold new reforms to introduce a truly market-based economy, or possibly slip instead into a sordid form of crony capitalism.
In today’s China, it seems the cat is neither black nor white but a dirty shade of grey.
. . .
Privatisation and the rise of capitalism
Privatisation has a long history, starting with monarchs and rulers selling state assets and licences to private individuals, writes Chris Giles. But more recently it was an idea that blossomed in the 1980s.
The UK’s Thatcher governments, between 1979 and 1990, embarked on selling state assets in mass public offerings of shares, swapping ongoing profit streams of nationalised industries for windfall revenues that were used to plug holes in fragile public finances.
In the process of marketing the equity, the UK government created an army of small shareholders.
This did not quite succeed in cementing capitalism into the hearts of the British public, but it certainly created a culture that respected the primacy of market forces in many areas previously thought to be the preserve of government.
Starting in 1979 with the sale of a tranche of BP, the oil producer, one after another of the commanding heights of the economy was sold. Telecoms, gas, electricity, the railways, the national airline, steelmaking, water and sewerage provision, coal mining and shipbuilding were all to follow.
This became a global phenomenon after the fall of the Berlin Wall in 1989 and the end of Soviet communism. Privatisation was seen as an essential tool in forcing inefficient and often corrupt state-owned enterprises to modernise in both former communist countries and market economies.
Over time, many studies showed it was not the change of ownership that most drove efficiencies but opening markets to competition. Where privatisation has been least successful, such as in the cronyism that accompanied Russia’s transition to capitalism, state monopolies were seized by small groups with vested interests but without the liberalising force of competition. Greater competition has transformed, for example, communications services around the world.
Many countries, including the UK, have few state-owned companies yet to privatise, apart from banks that the state was forced to nationalise in the financial crisis, but there is pressure for many crisis economies in the eurozone to sell government-owned assets to improve their efficiency and reduce gross public sector debt. In China, the world’s second-largest economy, the process of attracting private capital to its large state-owned enterprises has a long way to go.
. . .
Rule of law
The rule of law is seen as the foundation of a civilised society, writes Jane Croft. It is crucial in fostering an environment in which business can flourish.
In a recent speech on litigation funding Lord Neuberger, president of the UK’s Supreme Court, emphasised the importance of the rule of law: “Investors need to know that the political elite will not expropriate their profits or their businesses at will.
“Individuals and business have to be able to enforce contracts, to protect their intellectual property and to obtain effective redress not merely against other individuals and business but also against the state.”
As Adam Smith put it in his 1776 Inquiry into the Nature and Causes of the Wealth of Nations, economic activity and innovation will thrive only in an environment that affords secure property rights and effective freedom of contract.
Having a transparent legal system and an independent judiciary in which no one, including the government, is above the law is seen as key to retaining business confidence. In countries with strong legal systems such as the UK and US, the rich and powerful can, and are, prosecuted in the courts, and government decisions are regularly challenged by independent judges.
“There is a close correlation between a high prevalence of corruption and a weak rule of law,” says Robert Barrington, executive director of Transparency International UK, an anti-corruption organisation. “Therefore, where there is a strong rule of law, corruption is likely to be less and there is a general pattern of strong independent institutions like the judiciary, an independent media and law enforcement.”
Countries guarantee the rule of law when they provide fair and equal laws applicable to all, a legal system accessible to all and an effective court system.
Confidence in the integrity of the UK legal system is high – as demonstrated by litigants from the former Soviet Union opting to have civil disputes heard in the English courts.
Russia slipped from 63rd out of 142 countries ranked for economic competitiveness by the World Economic Forum in 2011 to 66th a year later, due in part to corruption and a lack of legal reform. The jailing of Mikhail Khodorkovsky, Russia’s one-time richest man, is one case where questions have been raised about the impartiality of the Russian justice system.
Likewise in some of Africa’s mineral- and oil-rich nations, their natural assets have often proved a curse in the past, fomenting coups and conflict, and undermining the rule of law.
Other jurisdictions, notably Chile and Brazil, have been held up as making strides in improving the rule of law. Brazil, for example, has introduced the ficha limpa (“clean slate”) law, which prevents people convicted of crimes from running for public office.
. . .
Globalisation and trade blocs
The word “globalisation” became popular in the 1980s because it seemed to capture the new world in which business was operating, writes Gideon Rachman. Since then it is not just stock markets that have gone global. The economist Philippe Legrain has calculated that by 2010 China exported as much in six hours as it had in the whole of 1978.
That year is significant because it marked the start of the modern era of globalisation, with Deng Xiaoping’s reform and opening of the Chinese economy, beginning in December 1978.
Over the next 20 years, other countries took significant steps to facilitate globalisation and new regional trade blocs were formed.
The UK, under prime minister Margaret Thatcher, abolished exchange controls, laying the foundation for the rise of London as the pre-eminent global financial centre. The EU created a single market. The US, Canada and Mexico created the North American Free Trade Agreement, and Latin American countries such as Brazil and Argentina embraced the “Washington consensus” of market-driven reforms.
In 1989, the Berlin Wall came down, meaning the communist half of Europe could embrace global capitalism. And in 1991, India turned its back on inward-looking economic policies and embraced liberal economic reforms. In 1995, the World Trade Organization was formed to police the rapidly expanding global trade system.
But it was international business that gave globalisation meaning. Over the past 30 years, international trade has grown about twice as fast as the global economy. China has emerged as a new hub, both as a market and a maker. Yet one of the most striking facets of globalisation is the sheer complexity and geographical extent of global supply chains.
The next step will be the expansion of south-south trade and the rise of multinationals from former emerging markets, such as Brazil, India and China itself. Globalisation is becoming truly global.
. . .
Selling to the next billion customers
Until recently, the world’s poor were seen as people in need of largesse, whether from the state, large philanthropic organisations or small community groups,writes Amy Kazmin. Today, the poor are no longer seen just as passive aid recipients but as a new consumer class willing to pay for goods and services – if these products are packaged, and priced appropriately.
The radical notion that selling to the poor can be profitable – and can help to alleviate poverty – was most actively propagated by the late CK Prahalad, an Indian-born professor of corporate strategy at the University of Michigan.
His 2006 book The Fortune at the Bottom of the Pyramid argued that treating the 4bn people in the world living on less than $2.50 a day as potential consumers – and developing business models to serve their needs – was “at the heart of the solution to poverty”.
Even before that, some individuals and companies had seen the potential. In the 1980s, Muhammad Yunus, a Bangladeshi economist, founded his pioneering Grameen Bank, which provided small loans to poor rural women at interest rates higher than commercial banks – from which the women could not borrow anyway – but lower than the local moneylenders.
In India, Hindustan Lever, an arm of consumer goods giant Unilever, in the 1990s started selling sachets of shampoo, tea and other consumer basics for one rupee – which even the poorest Indian could afford.
In Brazil, Casas Bahia became the country’s largest retailer by allowing cash-strapped working-class consumers to pay for household items in small instalments.
Philanthropic organisations have also been affected by the new mantra of market-based solutions to intractable problems. Charities such as the Michael & Susan Dell Foundation are putting their resources into social businesses that provide services such as health and educational support or even clean drinking water, through businesses that charge small user fees.
Of course, debate still rages over the ethics of profiting from the poor. Most mainstream companies see little problem with earning returns for shareholders if they can succeed in cracking the bottom of the pyramid market. Other companies with a stronger social mission tend to follow Yunus’s belief that profits should be ploughed back into the business to allow it to expand and serve more customers.
. . .
Deregulation
Proponents of deregulation have long argued that loosening government’s hold over industry enhances competition and efficiency, while burdensome regulations overwhelm companies in red tape and ultimately stymie growth, writes Stephanie Kirchgaessner.
The chief arguments against deregulation are that consumers can pay the price when companies or whole industries operate without independent oversight, opening the door to environmental and safety problems and even financial crises. The philosophy behind deregulation was most clearly articulated by economist Milton Friedman, who in the 1960s called for the scope of government to be “limited”.
The deregulation of US industry began in earnest under the 1980s administration of Ronald Reagan, when relaxation of rules governing transportation led to vast changes in government’s oversight of banks, telecommunications, energy and the media over the following decades.
Deregulation, whether at the hands of Reagan or Margaret Thatcher in the UK, who oversaw radical financial reform, is seen as a conservative idea.
But in the US it was Bill Clinton, the Democratic president in the 1990s, who embarked on one of the most significant regulatory changes in a generation, and one that is still debated today.
The reversal of the Depression-era banking rule known as the Glass-Steagall Act, which forbade the combination of investment and commercial banks, was supposed to make Wall Street banks more competitive and relevant. And it did.
This deregulatory push was championed by Alan Greenspan, the then US Federal Reserve chairman, and Robert Rubin, Clinton’s Treasury secretary. It allowed banks to merge, grow and be more complex and highly leveraged.
Today, the decision to do away with the 1930s rule is seen as a contributor to the 2008 financial crisis, though not necessarily to its immediate causes, such as the boom in subprime lending.
Just how far has public opinion shifted on the repeal of Glass-Steagall? Last year a champion of the 1990s reform, Sandy Weill, the former Citibank chief executive, created waves when he disavowed the change in structure. “What we should probably do is … have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail.”
Today even some Republicans challenge the existence of banks that are so big that they pose a risk to shareholders, because the US economy could not afford to see them fail and therefore would have to bail them out in another crisis.
. . .
Emergent economies and urbanisation
The rise of the emerging markets has profoundly changed the global economy over the past 20 years, writes Stefan Wagstyl. Led by China, emerging nations have increased their share of world output from 37 per cent in 2000 to more than 50 per cent; their role in trade from 20 per cent to nearly 40 per cent, and their share of global stock market capitalisation from less than 5 per cent to 15 per cent.
This trend has both fed off and stimulated another world-changing trend – urbanisation. Half of the world’s population now lives in cities, with increasing industrialisation raising the pace to take that figure to an expected 70 per cent by 2030. Last year, the emerging economies grew at an average 5.1 per cent; 7.8 per cent in China’s case. The developed world managed just 1.2 per cent. For 2013, the International Monetary Fund expects 5.9 per cent for emerging states, against 1.2 per cent for the rich countries.
China’s Huawei and ZTE rank among the world’s top five telecoms infrastructure manufacturers. Brazilian-led Anheuser-Busch InBev and South Africa’s SABMillerrank among the world’s top five brewers. Mexico’s Grupo Bimbo is the world’s largest baker.
China, which in 2010 overtook Japan as the world’s second-largest economy by GDP, is forecast to replace the US as number one in the next 15 years or so. By 2050, the top five are likely to be China, India, the US, Brazil and Russia.
However, Malaysia, Singapore, South Korea, Taiwan, Thailand and Hong Kong are the only six emerging economies to have maintained annual GDP growth rates of 5 per cent or more for four decades. That said, in 2013 growth in emerging markets is more diverse than it ever has been, with new countries coming to the fore as others slow down. The developed world, dominant since the industrial revolution two centuries ago, is giving way to a new order.
. . .
Education expansion
The stunning expansion of higher education constitutes one of the biggest changes to the world in the past 100 or so years, writes Chris Cook. In 1900, there were only 500,000 students in the world; today, the figure is 100m. From less than 1 per cent of school-leavers, the ratio has jumped to one in five.
While the level of higher education, and its quality, is not the same everywhere, the surge has happened across the world. One must look as far afield as Afghanistan under the Taliban to find a country that has significantly shrunk its higher education system in recent decades.
There has long been resistance among business leaders to the expansion of education. In 1899 in the US, the president of Stanford University felt obliged to dispel the myth that “education is of no value to a businessman”.
There are concerns about whether labour markets can swallow all of these graduates, and about whether degree requirements for relatively lowly jobs will inhibit social mobility.
But there is little doubt that innovation in developed countries is fuelled by the massive increase in the basic education of its citizens. Indeed, the west’s universities attract great innovators from the developing world. This has drastic effects on society and economies.
As Evan Schofer and John Meyer, sociologists at Stanford, argue: “The modern world is knit together in an elite power structure of people more schooled in a cosmopolitan world culture than in their own local one, and linked more tightly to each other than to their own populations.”
The concentration of excellent universities in the developed world means the best and brightest of the emerging world aspire to leave their homelands for a spell – and many do not return. The expansion has created effects that support existing elites and successful countries.
Change may be coming, however. Online courses tend to be a little flimsy and lack the community experience of college life, but they are growing increasingly sophisticated. Within the next 20 years it may be possible to get the full university experience at home.
Harvard, Oxford and Cambridge will never be troubled by the rise of online higher education. But if the quality and prestige of online courses start to catch up with those of lesser universities, the expansion of the past century may have nothing on growth in the next one.
. . .
English as lingua franca
What do Airbus, Nokia and Rwanda have in common? They all regard English as their preferred language, writes Michael Skapinker. As a European aircraft manufacturer with French, German, British and Spanish roots, Airbus has always used English as its common language. Nokia, the mobile phone maker based in Finland, uses the language as its gateway to the world. And Rwanda has adopted English as an official language and promotes its use in its education system.
There have been languages before that have been widely spoken. In his book The Last Lingua Franca, Nicholas Ostler writes that in 100AD a traveller could go from Spain to the Hindu Kush speaking Greek all the way. But no language has ever been spoken in as many places as English is today.
When a Brazilian meets a German, they will almost certainly speak to each other in English. In business conferences from Berlin to São Paulo, it is taken for granted that speeches will be in English. In many sectors, such as banking and management consultancy, it would be impossible to rise to the top without fluent English.
Such is English’s importance in business that those who speak it can earn significantly more. A British Council report, The Benefits of the English Language for Individuals and Societies: Quantitative Indicators from Cameroon, Nigeria, Rwanda, Bangladesh and Pakistan, found English speakers in those countries earned 25 per cent more than colleagues who didn’t speak the language. In Rwanda, in some jobs the difference was 181 per cent.
Does this mean native English speakers can expect to get the best jobs? Not necessarily. First, they are more likely to be monoglot – to speak no languages other than English. Non-native English-speaking business high-flyers can manage in both English and their own language, which is helpful in dealing with local customers.
Second, studies have shown international business gatherings in English often proceed more smoothly when there are no native English speakers around. The native English speakers often speak too quickly and use metaphors the others do not understand. Jean-Paul Nerrière, a French former IBM executive who observed this at many meetings, promoted what he called Globish, composed of 1,500 English words he said were perfectly adequate for business purposes.
But could English be supplanted by another global business language, such as Mandarin? It could happen, but given the time and effort learning a new language requires, it is difficult to see English being supplanted for at least several decades.
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