MYP History Globalisation of Markets Notes

What connects modern economies?

1. Globalisation today means that almost every country, city, and company is tied into a shared economic web.
2. Products are designed in one place, made in another, shipped across oceans, and sold everywhere.
3. Money, ideas, technologies, and workers move so quickly that decisions made in one country can affect people on the other side of the world within hours.
4. Global markets aren’t new, but they’re now faster, bigger, and more interconnected than ever.

What connects modern economies?

Trade links between countries

1. Nations specialise in what they produce best (cars, electronics, food).
2. They sell to each other through global supply chains.
3. Transport and shipping systems make worldwide trade fast and predictable.

Example

• The smartphone supply chain
  • A single phone combines:
    • design from the US
    • software from India
    • microchips from Taiwan
    • metals from Africa
    • assembly in China
  • One product → dozens of countries → one global market.

Flows of money and investment

1. Banks and investors move money internationally in seconds.
2. Companies can invest in factories or services anywhere in the world.
3. Financial markets (stock exchanges) link economies tightly together.

Example

• Global stock markets
  • When major stocks fall in New York or London, prices drop in Tokyo and Hong Kong the same day.
  • A shock in one country → effects everywhere.

Multinational corporations

1. Huge companies (e.g., Apple, Toyota, Unilever) operate across multiple countries.
2. They shape jobs, wages, consumer trends, and trade relationships worldwide.
3. Their supply chains link many economies into one system.

Example

• McDonald’s
  • McDonald’s buys beef, lettuce, potatoes, packaging, and tech from dozens of countries.
  • Its global menu reveals how interconnected food markets have become.

Transport and communication technology

1. Container ships, railways, planes, and logistics software make shipping global goods extremely efficient.
2. The internet and mobile networks allow instant global communication.
3. These technologies make distance matter far less than before.

Example

• The container revolution
  • Containerisation in the 1960s cut shipping costs dramatically.
  • One standard metal box → transformed global trade → made it cheap to ship goods worldwide.

Global rules and institutions

1. International organisations (WTO, IMF, World Bank) set rules for trade and finance.
2. Many countries join trade blocs (EU, ASEAN, NAFTA/USMCA) to reduce barriers.
3. These agreements make markets more predictable and connected.

Example

• The European Union
  • EU countries trade goods with no tariffs and share common regulations.
  • Result: one of the largest unified markets in the world.

How globalisation reshapes everyday life

Cheaper and more diverse products

1. Clothing, electronics, food, and household items often cost less because they’re made globally.
2. Consumers access products from every continent.

Interdependence between economies

1. A drought in Brazil affects global coffee prices.
2. Political instability in the Middle East affects oil markets.
3. A factory shutdown in Vietnam delays shoe deliveries in Europe.

More opportunities and more vulnerabilities

1. Workers can find jobs abroad.
2. Businesses can reach global customers.
3. But disruptions (pandemics, wars, trade disputes) spread quickly.

Case study

COVID-19 and Globalised Markets

• Supply chains were instantly disrupted because countries depended on parts made all over the world. When factories closed in China, car companies in Europe and the US ran out of components within weeks.
• Trade networks spread both goods and consequences. Shortages of masks, microchips, and medical equipment showed how tightly connected markets were.
• Economic shocks travelled globally. A lockdown in one region could slow production, cut demand, or raise prices everywhere, showing how no economy operates alone.
• Digital markets expanded rapidly. As physical trade slowed, global online companies (Zoom, Amazon, food delivery platforms) grew, proving how interconnected digital economies had become.
• Recovery depended on cooperation. Vaccines developed in one country used ingredients from others and were shipped through complex international systems.