This is the first in a (hopefully) long series of periodic vocabulary posts that will cover a variety of topics. The intention is to provide insight into popular terms in key fields that you may not be familiar with, which will ideally allow you to more effectively understand the subject.
For the first vocab lesson, I’ve decided to focus on globalization. As with any hot topic, globalization is a field that is constantly generating new and strange terms that can easily confuse you. Likewise, I’ve picked five popular (and frequently misunderstood) terms that I think are some of the most crucial to forming a clear understanding of the globalized “flat” world.
1. Flat World
If you’ve been confused by my use of this term in earlier posts, please allow me to clarify. The term “flat world” was made popular by Thomas Friedman in his 2005 best-seller The World is Flat, which is considered one of the most influential books on globalization. Wikipedia sums it up best:
The title is a metaphor for viewing the world as flat or level in terms of commerce and competition, as in a level playing field —or one where all competitors have an equal opportunity…[Friedman] suggests the world is “flat” in the sense that globalization has leveled the competitive playing fields between industrial and emerging market countries.(More)
Throughout this blog, the term “flat world” is generally used as a more convenient way of saying “globalized world” or “age of globalization.” Please note, however, that the use of the term does not mean that I (or even Friedman) believe the world is completely equal. It’s not. Indeed, there are many ongoing factors that have kept the world very much “un-flat.” Likewise, the use of the term “flat world” at this blog merely represents the idea of certain emerging economies rising to an equal competetive position among the first-world nations.
2. Emerging Markets
The 2008 Emerging Economy Report defines emerging markets as “regions of the world that are experiencing rapid informationalization under conditions of limited or partial industrialization.“ The term was originally invented by Antoine van Agtmael to provide a more accurate (and less offensive) replacement to the term “Third-world nation.” Today, the most prominent emerging market nations are far from being “third world” anymore, with some quickly approaching the status of “developed” or “first world.” (More at Emering markets - Wikipedia)
Developed nations (pink) vs. Emerging markets (blue)
3. BRIC
BRIC is an acronym used to describe a combination of Brazil, Russia, India and China. In the past decade or two, these four nations have become the strongest of the world’s emerging markets. Marked by extraordinarily rapid development, these nations are poised to become the newest members of the developed “first world,” and may likely even surpass nations such as the United States in global dominance. (More at BRIC - Wikipedia)
BRIC nations (green)
4. Digital Divide
Wikipedia defines digital divide as “the gap between those people with effective access to digital and information technology and those without access to it.” Contrary to Friedman’s “flat world” theory, the digital divide is one of many forces that is increasingly un-equalizing the world population. While developed and emerging economies are enjoying rapid technological advancement, un-developed nations have been left behind with little or no access to modern day technology. (More at Digital Divide - Wikipedia)
The digital divide is a growing problem that has prompted several international humanitarian efforts, most notably the One Laptop Per Child program.
Laptop designed by the OLPC program for children in the world's poorest nations
5. Neighborhood Effect
A recent article in the New York Times defines the neighborhood effect as the phenomenon of businesses “putting factories closer to components suppliers and to consumers to reduce transportation costs.” With the recent surge in energy costs, many businesses who outsource their manufacturing processes and/or transport their goods internationally are facing higher operating expenses which, as the article explains, is ”leading to a rethinking of this emissions-intensive model, whether the increased interest in growing foods locally, producing locally or shopping locally.”
In some cases, the neighborhood effect can be viewed as a reversal of outsourcing within the manufactured goods sector. One blogger accurately notes:
The days of fish caught in America and then shipped to China for packaging, only to be shipped back to the United States for consumption are probably numbered. (Transit Miami)
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I hope you enjoyed the first vocab lesson here at Global Millennial. I will periodically provide additional vocab posts relating to both globalization as well as other areas such as education, careers, finance, and more.
Provide your feedback: What other globalization-related words, terms or acronyms have you heard that you’d like to know more about?
It is of note that the neighborhood effect is what Thomas Friedman calls, “insourcing.”
Good observation Bernie…They are very similar. Insourcing, however, I think is a bit broader than “the neighborhood effect.” I say that mainly because Friedman talks about insourcing of services like customer support, which doesn’t necessarily depend on location but rather mere costs. The neighborhood effect seems more geared towards manufacturing specifically.
Maybe the neighborhood effect can be considered one component of the greater insourcing phenomenon.