There is so much ideology surrounding this notion, and its implications, that it is
essential to characterize globalization precisely, and then determine its extent and
evolution in empirical terms (see Hirst and Thompson, 1996). Although
globalization is multidimensional, it can be better understood starting with its
economic dimension. A global economy is an economy whose core activities work
as a unit in real time on a planetary scale. Thus capital markets are interconnected
worldwide, so that savings and investment in all countries, even if most of them
are not globally invested, depend for their performance on the evolution and
behaviour of global financial markets.
In the early 1990s multinational corporations employed directly ìonlyî about 70
million workers, but these workers produced one third of the worldís total private
output, and the global value of their sales in 1992 was US$ 5,500 billion, which is
25 per cent more than the total value of world trade in that year (Bailey et al.,
1993). Therefore multinational corporations, in manufacturing, services, and
finance, with their ancillary networks of small and medium businesses, constitute
the core of the world economy.
Furthermore, the highest tier of science and technology, the one that shapes and
commands overall technological development, is concentrated in a few dozen
research centres and milieus of innovation around the globe, overwhelmingly in
the United States, Western Europe and Japan. Russian, Indian and Chinese
engineers, usually of very high quality, when they reach a certain level of scientific
development, can only pursue their research by linking up with these centres. Thus
highly skilled labour is also increasingly globalized, with talent being hired around
the globe when firms and governments really need the talent, and are ready to pay
for it.
At the same time, the overwhelming proportion of jobs, and thus of people, are not
global. In fact, they are local and regional. But their fate, their jobs, their living
standards ultimately depend on the globalized sector of the national economy, or
on the direct connection of their economic units to global networks of capital,
production and trade. This global economy is historically new, for the simple
reason that only in the last two decades have we produced the technological
infrastructure required for it to function as a unit on a planetary scale:
telecommunications, information systems, microelectronic-based manufacturing
and processing, information-based air transportation, container cargo transport,
high speed trains, and international business services located around the world.
However, if the new global economy reaches out to encompass the entire planetó
if all people and all territories are affected by its workingsónot every place, or
every person, is directly included in it. In fact, most people and most lands are
excluded, switched off, either as producers, or consumers, or both. The flexibility
of this global economy allows the overall system to link up everything that is
valuable according to dominant values and interests, while disconnecting
everything that is not valuable, or becomes devalued. It is this simultaneous
capacity to include and exclude people, territories and activities that characterizes
the new global economy as constituted in the information age.
Similar processes of selective, segmented globalization characterize other critical
instrumental dimensions of our society, including the media, science, culture and
information at large.
Globalization and liberalization do not eliminate the nation state, but they
fundamentally redefine its role and affect its operation. Central banks (including
the new European Central Bank) cannot really control the trends of global flows in
financial markets. And these markets are not always shaped by economic rules, but
by information turbulences of various origins. National governments, in order to
maintain some capacity to manage global flows of capital and information, band
together, creating or adapting supranational institutions (such as the International
Monetary Fund, the European Union, NAFTA, or other regional co-operation
agencies), to which they surrender much of their sovereignty. So they survive, but
under a new form of state that links supranational institutions, national states,
regional and local governments, and even NGOs, in a network of interaction and
shared decision making that becomes the prevalent political form of the
information age: the network state.
In sum, globalization is a new historical realityónot simply the one invented by
neo-liberal ideology to convince citizens to surrender to markets, but also the one
inscribed in processes of capitalist restructuring, innovation and competition, and
enacted through the powerful medium of new information and communication
technologies.