Globalisation is increasingly playing a part in everyone’s daily life. Human migration, international trade, movement of capital and integration of financial markets are all contributing to an increasingly interconnected world. More and more business is conducted across national borders and this naturally offers great opportunities and threats for businesses and individuals alike.

The North-East has seen the negative aspects of globalisation first hand, with the closures of manufacturing plants such as Siemens, Fujitsu and Goodyear. The re-location of the Lloyds TSB call-centre is an example of how the service sector is not immune either from the threats posed by globalisation. The challenge for the region is to diversify and not rely on any one sector. A relatively strong manufacturing base remains, but the UK can no longer compete on a cost basis with the emerging economies of the world. The North-East is developing strengths in science, innovation and creativity – the sort of competencies which will allow the region to play a role within modern production chains which are increasingly flexible, specialised and dispersed across continents.

Globalisation is also affecting people and their cultures, with certain areas of the world seeing drastic improvements in living standards, health, opportunities and prosperity. Emerging economies are playing increasingly important roles in the global expansion of trade, as their consumer markets develop, and imports as well as exports, continue to accellerate. Inevitably, people nowadays are exposed to different cultures, through the products and services, the media, or the people they are exposed to. It is argued that the influx of the same cultural phenomena and multinational brands is harming local identities throughout the world. This destructive element will inevitably generate ill-feeling towards globalisation, so it is important that those involved in the process ensure it benefits everyone equally and respects local sensibilities.

The speed of technological change is now faster than ever and accordingly, those at the forefront of innovation will be best placed to move into high value-added, technology-driven areas which can provide new sources of growth. The OECD recently ranked the UK highest amongst the OECD countries in terms of economic flexibility, and rated the UK as having the lowest barriers to entrepreneurship of any major economy. With such welcoming conditions it is hoped that the UK and the North-East can continue to adapt and take full advantage of the opportunities presented by a globalised economy.

Fact File

• Total global output rose by 5% in 2006, led by China (10.5%), India (8.5%), and Russia (6.6%)
• Areas affected by globalisation have seen significant reductions in the proportion of people living on less than $2 a day. In East Asia (including China) the percentage has decreased by 50.1% compared to a 2.2% increase in Sub-Saharan Africa (between 1981-2002).
• In the 2004/05 period, 1,200 foreign companies chose to invest in the UK, creating over 34,000 jobs. This surpassed the record-breaking levels of inward investment set in the previous period, with more investment than ever coming from Asia.