Globalisation – the process by which the world has become interconnected as a result of increased trade and cultural exchange –has increased the production of goods and services. In fact, the biggest companies are no longer national firms but multinational corporations with subsidiaries in many countries. Globalization did not start today; it has been taking place for hundreds of years. However, it has picked up pace massively over the last half-century.
A major driver for globalisation are the numerous global industrial projects been carried out. These projects rely heavily on exports from all part of the world to be completed. How has the UK been contributing?
The UK is a big player in globalisation (international trade). In fact, it is the 10th largest export economy in the world and has the third largest amount of foreign investment (behind the US and China). The UK is currently the world’s ninth largest industrial nation and has been contributing greatly to the growth of global industries. Consider the stats –
The United Kingdom shipped US$445 billion worth of goods around the globe in 2017. Based on statistics from the International Monetary Fund’s World Economic Outlook Database, United Kingdom’s total Gross Domestic Product amounted to $2.880 trillion as of November 2017. Therefore, exports account for about 15.4% of total UK economic output.
To whom in particular has the UK been exporting?
By region, 54.4% of UK exports by value were delivered to other European countries, 22.6% were sold to Asian importers while 15% worth to North America. Africa got 2.5%, Oceania – led by Australia and New Zealand received 1.6% and Latin America excluding Mexico but including the Caribbean got 1.4% of UK exports.
By countries, the top export destinations of the United Kingdom are the United States ($61.6B), Germany ($43.8B), France ($26.5B), the Netherlands ($25.5B) and Ireland ($22.9B). The top import origins are Germany ($94.1B), China ($55.7B), the United States ($55.3B), the Netherlands ($40B) and Belgium ($35.4B).
What are the exports?
The top exports of the United Kingdom are Cars($40.6B), Packaged Medicaments ($21.6B), Gas Turbines ($19.3B), Gold ($15.6B) and Aircraft Parts($15B), using the 1992 revision of the HS (Harmonized System) classification.
What about the future?
According to forecasts and processes set in place, the UK will only grow from strength to strength. Department for International Trade joined with 17 of the UK’s leading firms in a new partnership to help UK companies secure major international contracts. The new body aims to make the UK more competitive on the global stage and bring smaller companies into the infrastructure export supply chain.
International Trade Minister Greg Hands said – “Global infrastructure investment is set to increase rapidly in the coming years and we must make sure UK firms are in prime position to take advantage of it. Our ‘Team UK’ approach will bring together leading UK infrastructure companies to showcase their expertise on a global scale and work together to successfully bid for the biggest contracts”. This presents an opportunity for manufacturers within the flow control sector such as Sarasin to continue to strengthen their position in the international scene.
Some benefits of Globalisation and International trade
No country in the world has everything that its people need and want. This fact alone makes trade necessary. Besides this, other benefits are –
Cheaper Goods– International Trade has resulted in trading partners getting goods cheaper than otherwise as every country produce those goods in the production of which it has to occur less comparative cost and stimulates productivity.
Variety – By virtue of International Trade consumers gets an opportunity to consume a large variety of goods produced by different countries. This improves the quality of life.
Improved International Relationships – International Trade promotes cooperation among different countries. It creates an atmosphere of goodwill and friendship among the trading countries.
Employment Opportunities – International trade helps generate more employment through the establishment of newer industries to cater to the demands of various countries. It has also led to increased knowledge and best practices exchanged by countries working together.
