The Drivers of Trade and Globalization

The Drivers of Trade and Globalization

Four major drivers support the process of globalization by setting common standards about how to undertake commercial activities:

  • Economic integration. The setting of regulatory chains allows for the harmonization of regulatory regimes, particularly through trade agreements.
  • Production. The setting of global value chains, particularly through offshoring allows for networked forms of global production.
  • Transportation. The setting of transport chains supported by containerization enables the potential to move large quantities of goods over long distances.
  • Transactions. The setting of information chains through information and communication technologies allow investments and capital to be transferred.

The above is facilitated through the setting of standards that improve interoperability. Historically, standards such as measures (decimal system) and time zones helped economic systems to better interact. The container represents one of the most salient standards around which globalization was able to expand.