{"id":2822,"date":"2023-02-19T16:10:52","date_gmt":"2023-02-19T16:10:52","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-3-1-1-globalization\/"},"modified":"2025-05-19T20:28:12","modified_gmt":"2025-05-19T20:28:12","slug":"learn-it-3-1-1-globalization","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/introductiontobusiness\/chapter\/learn-it-3-1-1-globalization\/","title":{"raw":"Learn It 3.1.1: Global Trade","rendered":"Learn It 3.1.1: Global Trade"},"content":{"raw":"<section class=\"textbox learningGoals\">\r\n<ul>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Explain what globalization is and how it is related to business&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Explain what globalization is and how it is related to business<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand why absolute and comparative advantage make companies want to do business in foreign markets&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand why absolute and comparative advantage make companies want to do business in foreign markets<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the difference between balance of trade and balance of payments&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the difference between balance of trade and balance of payments<\/span><\/li>\r\n\t<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the difference between trade deficits and trade surpluses&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the difference between trade deficits and trade surpluses<\/span><\/li>\r\n<\/ul>\r\n<\/section>\r\n<h2><strong>What Is Globalization?<\/strong><\/h2>\r\n<p>There was a time when consumers only had access to goods and services that were available locally. Their choices were limited by what they could access on foot, by horse, or by carriage. This is still the case for many people around the world. In some rural parts of the U.S., it's still necessary\u00a0for families to travel a significant distance to stock up on food, household items, and other necessities.<\/p>\r\n\r\n[caption id=\"attachment_1346\" align=\"alignright\" width=\"300\"]<img class=\"wp-image-1346 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5830\/2022\/10\/15210611\/Silk-Road-Map-300x195.jpg\" alt=\"map of Europe, Africa, and Asia showing the Silk Road trade routes from Asia to Europe\" width=\"300\" height=\"195\" \/> Figure 1. The Silk Road and other historical trade routes[\/caption]\r\n\r\n<p>With the rise of Internet-based business (think Amazon and AliExpress), there's been an explosion of international trade. More and more consumers essentially have the world delivered to their door. <strong>Global business <\/strong>(or international business) refers to activity that happens when goods, services, or resources cross the borders of two or more nations. Trade across borders and between cultures has been a feature of human civilization for centuries. In addition, trade is widely recognized as the goal of colonialism throughout history, where one country exerts physical, political, and economic control over a less developed one.[footnote]Kleiman, Ephraim. \u201cTrade and the Decline of Colonialism.\u201d The Economic Journal 86, no. 343 (1976): 459\u201380. https:\/\/doi.org\/10.2307\/2230793[\/footnote]<\/p>\r\n<p>In contrast, <strong>globalization<\/strong> is a shift toward a more integrated world economy in which culture, ideas, and beliefs are exchanged as a part of global business. As a result of new transportation and communication technologies, people around the world can more readily connect with one another, both virtually and geographically, and learn from each other.<\/p>\r\n<section class=\"textbox keyTakeaway\">\r\n<div>\r\n<h3>globalization<\/h3>\r\n<p>Globalization is much broader than just trade between nations. The concept of globalization encompasses the sharing and adopting of culture, ideas, and beliefs as international business takes place. It also includes how world economies become more integrated as countries trade and become more reliant on each other for resources.<\/p>\r\n<\/div>\r\n<\/section>\r\n<section class=\"textbox example\">One aspect of globalization is the movement of people from one country to another. Here are three different stories about people who left the U.S. and are embracing life in another country.[videopicker divId=\"tnh-video-picker\" title=\"Working in Another Country\" label=\"Select Video\"]<br \/>\r\n[videooption displayName=\"Teaching English in South Korea\" value=\"https:\/\/www.youtube.com\/watch?v=xotMJEWJVqM&amp;t=341s\"][videooption displayName=\"Bringing Solar Irrigation to Farmers in Kenya\" value=\"\/\/plugin.3playmedia.com\/show?mf=9882515&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=lpNGZoejxdU&amp;video_target=tpm-plugin-drvnscs7-lpNGZoejxdU\"][videooption displayName=\"Flipping Houses to Move to Portugal\" value=\"https:\/\/www.youtube.com\/watch?v=JAfBEwgHsC8\"]<br \/>\r\n[\/videopicker]<\/section>\r\n<p>You can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/LivingOn24KAYearInSeoulSouthKoreaMillennialMo.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cLiving On $24K A Year In Seoul, South Korea\u201d here (opens in new window).<\/a><br \/>\r\nYou can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/HowIRaised40MillionToGiveRuralFarmersSolarPower.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHow I Raised $40 Million To Give Rural Farmers Solar Power.\u201d here (opens in new window).<\/a><br \/>\r\nYou can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/HowWeRetiredEarlyInPortugal.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHow We Retired Early In Portugal\u201d here (opens in new window).<\/a><\/p>\r\n<section class=\"textbox tryIt\">[ohm2_question height=\"300\"]3806[\/ohm2_question]<\/section>","rendered":"<section class=\"textbox learningGoals\">\n<ul>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Explain what globalization is and how it is related to business&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Explain what globalization is and how it is related to business<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand why absolute and comparative advantage make companies want to do business in foreign markets&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand why absolute and comparative advantage make companies want to do business in foreign markets<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the difference between balance of trade and balance of payments&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the difference between balance of trade and balance of payments<\/span><\/li>\n<li><span data-sheets-value=\"{&quot;1&quot;:2,&quot;2&quot;:&quot;Understand the difference between trade deficits and trade surpluses&quot;}\" data-sheets-userformat=\"{&quot;2&quot;:15233,&quot;3&quot;:{&quot;1&quot;:0},&quot;10&quot;:0,&quot;11&quot;:4,&quot;12&quot;:0,&quot;14&quot;:{&quot;1&quot;:2,&quot;2&quot;:0},&quot;15&quot;:&quot;Calibri&quot;,&quot;16&quot;:10}\">Understand the difference between trade deficits and trade surpluses<\/span><\/li>\n<\/ul>\n<\/section>\n<h2><strong>What Is Globalization?<\/strong><\/h2>\n<p>There was a time when consumers only had access to goods and services that were available locally. Their choices were limited by what they could access on foot, by horse, or by carriage. This is still the case for many people around the world. In some rural parts of the U.S., it&#8217;s still necessary\u00a0for families to travel a significant distance to stock up on food, household items, and other necessities.<\/p>\n<figure id=\"attachment_1346\" aria-describedby=\"caption-attachment-1346\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-1346 size-medium\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5830\/2022\/10\/15210611\/Silk-Road-Map-300x195.jpg\" alt=\"map of Europe, Africa, and Asia showing the Silk Road trade routes from Asia to Europe\" width=\"300\" height=\"195\" \/><figcaption id=\"caption-attachment-1346\" class=\"wp-caption-text\">Figure 1. The Silk Road and other historical trade routes<\/figcaption><\/figure>\n<p>With the rise of Internet-based business (think Amazon and AliExpress), there&#8217;s been an explosion of international trade. More and more consumers essentially have the world delivered to their door. <strong>Global business <\/strong>(or international business) refers to activity that happens when goods, services, or resources cross the borders of two or more nations. Trade across borders and between cultures has been a feature of human civilization for centuries. In addition, trade is widely recognized as the goal of colonialism throughout history, where one country exerts physical, political, and economic control over a less developed one.<a class=\"footnote\" title=\"Kleiman, Ephraim. \u201cTrade and the Decline of Colonialism.\u201d The Economic Journal 86, no. 343 (1976): 459\u201380. https:\/\/doi.org\/10.2307\/2230793\" id=\"return-footnote-2822-1\" href=\"#footnote-2822-1\" aria-label=\"Footnote 1\"><sup class=\"footnote\">[1]<\/sup><\/a><\/p>\n<p>In contrast, <strong>globalization<\/strong> is a shift toward a more integrated world economy in which culture, ideas, and beliefs are exchanged as a part of global business. As a result of new transportation and communication technologies, people around the world can more readily connect with one another, both virtually and geographically, and learn from each other.<\/p>\n<section class=\"textbox keyTakeaway\">\n<div>\n<h3>globalization<\/h3>\n<p>Globalization is much broader than just trade between nations. The concept of globalization encompasses the sharing and adopting of culture, ideas, and beliefs as international business takes place. It also includes how world economies become more integrated as countries trade and become more reliant on each other for resources.<\/p>\n<\/div>\n<\/section>\n<section class=\"textbox example\">One aspect of globalization is the movement of people from one country to another. Here are three different stories about people who left the U.S. and are embracing life in another country.<\/p>\n<div id=\"tnh-video-picker\" class=\"videoPicker\">\n<h3>Working in Another Country<\/h3>\n<form><label>Select Video:<\/label><select name=\"video\"><option value=\"https:\/\/www.youtube.com\/embed\/xotMJEWJVqM\">Teaching English in South Korea<\/option><option value=\"\/\/plugin.3playmedia.com\/show?mf=9882515&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=lpNGZoejxdU&amp;video_target=tpm-plugin-drvnscs7-lpNGZoejxdU\">Bringing Solar Irrigation to Farmers in Kenya<\/option><option value=\"https:\/\/www.youtube.com\/embed\/JAfBEwgHsC8\">Flipping Houses to Move to Portugal<\/option><\/select><\/form>\n<div class=\"videoContainer\"><iframe src=\"https:\/\/www.youtube.com\/embed\/xotMJEWJVqM\" allowfullscreen><\/iframe><\/div>\n<\/section>\n<p>You can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/LivingOn24KAYearInSeoulSouthKoreaMillennialMo.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cLiving On $24K A Year In Seoul, South Korea\u201d here (opens in new window).<\/a><br \/>\nYou can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/HowIRaised40MillionToGiveRuralFarmersSolarPower.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHow I Raised $40 Million To Give Rural Farmers Solar Power.\u201d here (opens in new window).<\/a><br \/>\nYou can view the <a href=\"https:\/\/course-building.s3.us-west-2.amazonaws.com\/Intro+to+Business\/transcripts\/HowWeRetiredEarlyInPortugal.html\" target=\"_blank\" rel=\"noopener\">transcript for \u201cHow We Retired Early In Portugal\u201d here (opens in new window).<\/a><\/p>\n<section class=\"textbox tryIt\"><iframe loading=\"lazy\" id=\"ohm3806\" class=\"resizable\" src=\"https:\/\/ohm.one.lumenlearning.com\/multiembedq.php?id=3806&theme=lumen&iframe_resize_id=ohm3806&source=tnh&show_question_numbers\" width=\"100%\" height=\"300\"><\/iframe><\/section>\n<hr class=\"before-footnotes clear\" \/><div class=\"footnotes\"><ol><li id=\"footnote-2822-1\">Kleiman, Ephraim. \u201cTrade and the Decline of Colonialism.\u201d The Economic Journal 86, no. 343 (1976): 459\u201380. https:\/\/doi.org\/10.2307\/2230793 <a href=\"#return-footnote-2822-1\" class=\"return-footnote\" aria-label=\"Return to footnote 1\">&crarr;<\/a><\/li><\/ol><\/div>","protected":false},"author":21,"menu_order":4,"template":"","meta":{"_candela_citation":"[{\"type\":\"pd\",\"description\":\"map of Silk Road\",\"author\":\"\",\"organization\":\"Saylor Academy\",\"url\":\"https:\/\/learn.saylor.org\/mod\/resource\/view.php?id=4465\",\"project\":\"\",\"license\":\"pd\",\"license_terms\":\"\"},{\"type\":\"original\",\"description\":\"Practice Question\",\"author\":\"Nina 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