Hi, guys. Welcome back to Global Business Environment. This is Module One, Part Two, in which we continue to ask the question, what is globalization? What do we mean by that? How does it fit with our topic of the global business environment? We've talked a little bit about some of the controversies that exist about globalization. And we'll continue to discuss those in this module. I want to draw your attention for a couple of minutes to a, a book that was a very popular book called The World is Flat. It's been translated into many languages from English. It was written by a New York Times journalist named Thomas Friedman. And it was a, a book that tried to describe to some degree the globalization period that we're currently in and you might consider picking it up or at least seeing what it's about but this author is a big proponent of the idea that the world is completely globalized now. That all the movies we watch are, are the same across the globe, that there aren't any differences, really, or the differences are very minimal, and I don't want to miss-characterize the book, but, there are some, not just, Thomas Friedman, there are some who argue that we already live in that world, that it's completely globalized. And that you know, there, there really aren't borders. Another view is if you have had the chance to travel across borders is to realize that borders do matter. And every time I go into a new country, I realize the differences. And if, if we were in a completely globalized world, we wouldn't have any borders. We wouldn't have separate countries. We wouldn't have separate customs, separate, nationalities, separate languages. And so, even though it might be the case that popular movies across the world are now, more widespread. Or we may be more aware, across the world, of different foods, or different food companies. And we may be able to talk to each other a little bit easier. It would be nice to find out if it's really true that we're getting close to this maximum globalization if, if we were getting to that point by the way there wouldn't be very much point to having a class in global business environment. Because the world would be just one big market. And so it isn't those differences across borders that continue to, force us to have classes like this. Here's an alternative view. And this is put forth by a Harvard professor, named Dr. Gimawat. And he has books that he's written, and he even has a Coursera MOOC called Globaloney in which he shows some very convincing data about the degree of globalization that truly exists. In this particular graph and this is from several years ago this particular graph shows with the green line the percentage of of some type of interaction across borders that a survey indicated they thought occurred. And then the blue shows the actuals. So let me give you an example of what I mean by that. What is the percentage of telephone calls across the globe which are international, which cross borders? Now I realize that Skype exists and there are lots of ways to communicate and cell phones. This is landlines I believe. So we're talking about telephone calls using traditional technology what percent of all telephone calls cross borders? And the data show that it's less than 5%, in fact it's like 2% or 3%. And what Dr. Gimawat points out is that people think in, in one survey, people thought that 30% of phone calls h, crossed borders. And so, he's emphasizing that in actuality, we still are a globe that is relatively isolated. We talk to each other within our own countries. Let's look at another one. Immigration. People think that over 20% of the world population is immigrants, when in fact it's really only 2 or 3% of the world. Now, immigration is a very important topic that we could discuss in a whole entire course, but it's, and it is, it is true that there is immigration, but it's just not to the degree that people think. University students sometimes we, we might hear the idea that there are these global universities and that they're you know students coming across borders to study from China into Europe for example or from India into Canada and again in this survey, over 20% were estimated to be of university students worldwide, were estimated to be foreign students, who had crossed borders to study, when, in fact, it's about 5%. Direct investment. Of all projects, of all investments made across the world, which ones or what percentage involves some type of foreign investment and direct control of that investment across borders. And we're talking about offshoring here, by the way. This is not outsourcing. This is a direct investment. One company, like Ford, building a plant in Argentina and owning it and managing it. In the survey, over 30% was estimated to involve cross border investment when, in fact, it's still less than 10%. So, most investment across the world is within individual countries. And, finally, trade. In a completely globalized world, you know, you would have this very high percentage of of commerce that would be across borders. Estimates in the survey came in about 40%. This one came the closest to being accurate about 30% of of all commerce across the world is across borders. Now that's actually pretty impressive if you think about it because I imagine that's grown over time. And this is imports and exports. And anytime you're buying a product that's made in another country they, not necessarily through investment in a plant but sales abroad. And so this is probably the best indicator that we are creeping towards a more globalized world. But I think if you accept Dr. Gimawats data as shown here. You would argue that we have a long way to go to having a truly globalized global business environment, and so that's part two. In part three we'll continue to talk about some of the complex issues that, that the global business environment presents to business people. Thank you.
