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HOW GLOBALIZATION IS IMPACTING CANADIAN BUSINESSES by Nigel Taklalsingh
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Background & Context
Globalization 4.0
Globalization can be defined as the increasing integration of economic, cultural, political, and social systems across countries (Oxford Reference). The import and export of goods or trade across borders has been happening for thousands of years. The Silk Road in 130 B.C.E. was the first recorded existence of globalization, where goods moved from China to the Middle East and Europe.
According to the World Economic Forum, we have entered a new era of globalization: Globalization 4.0. This phase of globalization is centered on digital capabilities, automation, and artificial intelligence. These forces are projected to lead to a global GDP of 200 trillion USD by 2050 (OECD). This would represent approximately 40 trillion USD in global trade in fewer than 30 years, a 110 per cent increase since 2019.
Since that time, globalization has evolved exponentially. Trade agreements, reduced tariffs, and advancements in the movement of money have played a role in supporting and promoting globalization. According to Statista, the total value of goods exported globally in 2019 was approximately 19 trillion USD, which is almost 20 per cent of the 2019 global gross domestic product (GDP), based on Organisation for Economic Co-operation & Development (OECD) data.
In a Canadian context, the 2019 trade in goods and services totalled $1.5 trillion (Canada’s State of Trade 2020, Government of Canada). This represents approximately eight per cent of the total value of goods exported globally in 2019. This suggests that, as Canada enters this new phase of globalization, it has the potential to more than double the value of its trade in goods and services to $3.2 trillion by 2050.
the EDGE Spring 2023
To help accomplish this objective, there are three critical aspects of Canadian businesses that need attention: climate change, access to human resources, and regulation.
