Business Studies – 6.2.1 The importance of globalisation | e-Consult
6.2.1 The importance of globalisation (1 questions)
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Improved transport links have been a crucial driver of globalisation because they reduce the cost and time associated with moving goods and people across international borders. Historically, high transportation costs limited trade to nearby regions. However, advancements like container ships, airplanes, and efficient road and rail networks have dramatically changed this.
Examples include:
- Containerisation: Standardised containers allow goods to be easily transferred between ships, trains, and trucks, reducing handling time and costs. This has facilitated the growth of just-in-time inventory systems.
- Air freight: Essential for time-sensitive goods like electronics and pharmaceuticals, air freight enables faster delivery and access to global markets.
- Improved road and rail networks: These networks facilitate the movement of goods within countries and to neighbouring nations, supporting regional and international trade.
- Reduced shipping costs: Economies of scale in shipping have led to significantly lower per-unit costs, making international trade more profitable.
Without these improvements, globalisation would be far less extensive. The ability to efficiently move goods has fostered international supply chains, increased competition, and facilitated the growth of multinational corporations.