“A core contention of this book is that it is essential to distinguish distance’s impact on the difficulty of moving three types of things: goods, ideas, and people.”

Source: Robert Baldwin (2016) The Great Convergence: ICT and Globalisation

Globalization, with respect to the costs of trade (of goods, ideas and people), has transformed with leapfrogs in technology:

  • Transport technology lowered the costs of transporting goods and allowed the ‘unbundling’ of production and consumption, and ‘made here sold there’ characterized country’s trading patterns.
  • ICT dramatically lowered the cost of moving ideas, know-how and communication, allowing for large firms to offshore their manufacturing functions, and ‘cross-national production networks’ (Global Value Chains) arose.
  • The next transformative technology might alter the cost of moving people and result in a new globalization dynamics.