Impact of Globalization and Technology on Economic Structures
The Advancement of Technology and Globalization Connected
The application of new communication technologies (computing and telematics) has made economic globalization possible, as contacts and exchanges between different sites of the same company or between different companies can be established in a snapshot and simultaneously. Globally, economic globalization has brought:
The Relocation and Industrial Collapse. Industries can locate anywhere in the world where there are more advantages. Besides, it can break barriers to be present in other places and supply the market on demand.
The Increased Foothold of Information Services and Culture. These services are essential to know the markets, encourage consumption, and facilitate communications networks.
Geographical Mobility. People can move more freely worldwide.
The Free Movement of Capital. Until about a decade ago, state governments controlled the movement of capital between countries, so that without prior authorization from the government, an employer could not move capital from one country to another. Today, this situation has changed significantly; in many countries around the world, capital can be invested without prior authorization from governments.
According to the function, there are two types of capital:
– Productive Capital. This is invested in company-sized industrial or service activities. When companies need capital, an option that can be carried out is to issue shares and sell them on the stock market.
– Financial Capital. Operates in both short-term and long-term investments, either in shares of companies or to speculate on interest rates. Financial capital can cause financial crises if it withdraws rapidly, either because it offers better opportunities or because there is some evidence of danger to the investor’s earnings, etc.
In recent years, financial capital has been very beneficial, speculating with money, leading companies to improve their performance to attract productive capital.
The Financial Market Liberalization
In financial markets, one can buy or sell securities, shares, and future options. Markets are essentially based on speculation; the stock market is one example. The financial markets can be of several types: capital, insurance, currency, etc.
The liberalization process of financial markets was the result of measures taken from 1979 under Ronald Reagan (United States) and Margaret Thatcher (United Kingdom). Since then, capital flows easily through the stock markets around the world, though concentrated in a special way in the U.S., the European Union, and Japan.
Within the financial markets, capital markets have grown rapidly; now, they move an estimated value of 1.5 billion each day. Money is invested in stock markets that offer more opportunities and advantages where higher profits are expected. The investment of capital by buying shares of traded companies can develop industrial activities and services, creating jobs and wealth.
However, the purchase of shares may also lead to strong speculation if the investor can exert pressure on shares of companies, resulting in evaluating the company and its possibilities far above its real value. This can create crisis situations. The Spanish capital invested in the world market and the two stock exchanges of Barcelona and Madrid have attracted too much foreign capital. However, these exchanges are far from the three major stock exchanges worldwide: New York, London, and Tokyo.
The Concentration of Capital: The global economy is also characterized by the formation of large multinational companies that seek to increase their capital, perform business processes that focus, and expand their markets. To do so, companies tend to constitute a monopoly or oligopoly. These multinationals operate in several ways: through internal growth, by merging with other companies, or by acquiring them through friendly or hostile takeovers. In specific cases, the concentration of capital is so great that some companies have a higher volume of revenue than some countries.
These companies, which affect various interests in countries and a large number of workers, concentrate enormous economic power and exert a clear influence on decisions at both national and international levels. Expanding Companies means that the centers of production and management are located in several countries. This creates a relationship of interdependence between firms, production systems, and territories. The investment made by a company in another country’s productive capacity generates jobs, both directly and indirectly, because companies often outsource auxiliary enterprises and service activities for their employees.
Companies that invest in other countries repatriate benefits, which means that the benefits go largely to these countries. However, it may be that a portion is reinvested in the country to expand or diversify the presence of the company.
Some Spanish companies have recently invested significantly abroad, such as Repsol YPF, Iberdrola, and Telefonica. Social Globalization: Globalization has also caused major social transformations in areas where it has been implemented. Examples of these transformations are:
The Incorporation of Women into the Paid Labor Market. This, together with other factors such as the emergence of new family models (single parents) or new demographic behaviors (delaying motherhood, among other factors), has altered traditional family life.
Increasing the Level of Consumption. The vast range of products on a global scale alters consumption patterns, which can sometimes create compulsive buying behavior.
Given the massive dissemination of similar products that businesses offer, consumer products tend to be uniform. Thus, supermarkets offer the same products around the world, and all major cities or tourist centers have the same hotel deals or fast food restaurant chains.
The Job Market also goes global through migration. Workers, whether qualified or not, can access the job market in different countries. The Cultural Globalization
The process of globalization affects the world of culture in areas such as:
Science, where the great world centers of research collaborate to carry out studies in various fields. Information and knowledge have become strategic sectors for this field; globalization has led to prioritizing research and achieving new products and technologies that have represented profound transformations.
Countries and companies increasingly invest resources in R&D (Research and Development), especially the USA, EU, and Japan (Triad), as well as South Korea.
When a scientific or technological advancement is made, it is recorded as property or patent, and those who wish to use this new advancement must pay rights because the research has not been conducted freely.
Sports and Artistic Tastes Are Standardized. Access to information through the media (Internet and multimedia groups) allows almost everyone to enjoy the same artistic, sporting and cultural experiences. Most of humanity knows the great athletes, musicians, or actors, buys their books or computer programs, and watches the same movies and sporting events globally.
The different development levels of countries explain that some groups are differentiated from others that are not part of rich countries:
Developing Countries are states with a low standard of living and relatively high population growth. Their economies are primarily agrarian, and industrial development is minimal or incipient, which determines the level of widespread poverty.
However, within developing countries, there are a few that grow at a much higher rate than the rest of the world; these are the emerging G-5 countries, which combine elements of both the rich and poor worlds, maintaining many internal social differences. They are essential to the capitalist system because they prevent polarization between rich and poor and demonstrate that the system facilitates progress. In general, these regions are very active, benefiting from interesting and prepared or cheap labor, low taxes, and strong environmental standards, with governments favoring the entry of foreign companies.
Poor Countries in sub-Saharan Africa lack collective welfare because capitalism exploits natural resources for its own benefit and allows corrupt governments to remain in power, insulating their interests and sometimes supporting them. Instead, people are more prepared to emigrate, whether as political refugees or survivors of bloody wars in which capitalist interests are involved. Others are countries without relevant natural resources and engaged in tribal wars, which have left them capital-less and without interest; these are countries that have been forgotten by the global trade system. Unequal Trade The volume of commercial trade from less developed countries is very low due to the characteristics and production flows. Many countries with a subsistence economy do not even have assets that allow them to engage in international trade. Other well-grown products, such as coffee, cocoa, sugar, and cotton, are destined for global marketing; their national economies depend on exports for 80% to 90%. However, prices are fixed by the New York Stock Exchange, and multinationals profit excessively as intermediaries. For this reason, there has been an alternative type of trade known as fair trade.
Sometimes, the least developed countries remain outside the global trade network. There are three main global trade flows linking North America, the European Union, and Japan-Korea. However, large areas of Latin America, Africa, and Asia are isolated from trade routes, making access very difficult due to their inefficient communication networks and low potential. Thus, the trade balances of these countries are lacking, as they export few cheap goods while importing manufactured products at very high prices from the developed world. This deficit exacerbates the problem of external debt, which threatens their economies and highlights the deep contradictions of globalization. The International Monetary Fund (IMF) or World Bank provides loans that they cannot repay, and consequently, the accumulation of interest reaches triple or quadruple the initial credit, making it increasingly difficult to escape poverty. This situation calls for the need to write off the debt of the poorest countries.
Worldwide, the global order and disorder created by the dominant capitalist system has generated great wealth but has also allowed inequalities and endangered the preservation of the global environment.
These problems have prompted protests and reactions, leading to the relative decline of the world order established in the United States, a country that seems increasingly less able to exercise command despite its great economic and military power. A good example is the Iraq war, which was initiated without the support of the United Nations and faced opposition from many countries.
From a geopolitical point of view, those states that, since the 1980s, have hosted Islamism have become a guide to the political failure of capitalist development policies, resulting in inequality and corruption. They have carefully chosen policies and reacted violently against everything they consider belonging to the Western world, as happened in Tirana, Algeria, and Afghanistan.
This rejection of the Western world by some Muslim countries also fuels the conflict between Israel and Palestine, where Israel has the support of the United States and the UN decisions that have been repeatedly neglected. Thus, the confrontation between the West and some Arab countries creates uncertainty in the global system and feeds a small group of fanatical terrorists. Spain has a sad experience with the attacks on March 11 in Atocha station in Madrid.
Moreover, consider the case of China, a country with a communist political system that practices a market economy. It is quantitatively relevant in many aspects, such as being the most populous country in the world, with more than 1.3 billion people, and the competitiveness of its economy in the world market means that, although it is an emerging country, it is regarded as a world power.
The conflict between Russia and Georgia (2008) demonstrates the resurgence of Russia as a great world power. It also confirms its opposition to the penetration of U.S. influence in its former domains in the Caucasus, aiming to prevent American control over hydrocarbon routes from the Caspian Sea.
The solution to these systemic problems requires global negotiations and agreements. It is increasingly necessary to establish or reform supranational governance for the economy and justice worldwide. The Organization of the United Nations (UN) could have this role because it was created to ensure global order and peace. However, we should redefine the operation of the UN and end the veto power held by some member countries in its institutions, as well as the limited capacity to implement resolutions. The United Nations Organization (UNO) includes all countries that accept the principles laid down in the Charter of the United Nations (1941) and are willing to collaborate in its organization and financing. New candidate countries are accepted by the General Assembly, which was the first body created by the Charter. Spain, governed by a dictatorship at the time, was not admitted to the UN until 1955.
Representatives of UN member countries meet once a year in the General Assembly or when conflicts arise. The Assembly aims to organize international arbitration that takes into account the opinions of all countries, both more powerful and weaker. The result of the deliberations on a particular recommendation must be approved by a two-thirds majority of its members.
The recommendation then goes to a reduced organ of the UN, the Security Council. This body is composed of representatives from fifteen countries, including the five permanent members: the United States, Russia, China, the United Kingdom, and France. Since any member of the Security Council can veto a recommendation from the General Assembly, it is clear that the decision-making power of this group of countries is significant. This situation weakens the power of the UN and justifies protests against its operation. The issue is complex because, without the input of economically powerful countries in the permanent representation of the Security Council, the UN would struggle with financing. Relative Position of Spain in the World
To examine the status of Spain in the world, several variables must be taken into account:
The extension: if countries are sorted by area, the largest countries occupy a significant part of a continent, with an area higher than 7 million km2. A second category of states includes those with an area of 1 million km2.
Spain has an area of 505,990 km2, ranking fifty-first in the world, so it is considered a relatively large territory.
The Settlement. If countries are sorted by population, Spain occupies a prominent place and can be considered a populous country.
Spain is located within the group of countries that have a considerable population (46 million).
Wealth. The level of wealth of a country is usually measured according to its per capita gross domestic product (GDP). The GDP is the value of total production in a year divided by the number of inhabitants. Spain, with a per capita GDP of 24,020 euros, is a rich country that is part of the group of developed countries in the world. As a member of the European Union, Spain is included in the group of the most economically powerful countries on the planet.
Development. Currently, the development of countries is preferably assessed using the Human Development Index (HDI), an indicator calculated from three variables: life expectancy, birth rate, and enrollment rate. Spain ranks sixteenth in the world with an HDI of 0.949. All these data confirm that we are part of the small group of inhabitants of the planet that enjoys more favorable living conditions. Spain is a country with a good standard of living.
Screening of Spanish Culture to the World
Language is the most direct expression of culture. Spain, like most countries in Europe and the world, is a multilingual country, where different languages represent cultural wealth.
Spanish is a language with a significant presence worldwide, as it is spoken in various ways by millions of people in Latin America. Spanish is also the second most spoken language in the U.S. due to the large number of Hispanic immigrants; it is the official language of the UN and co-official in the European Union.
Spain in International Organizations
Due to the Civil War and Franco’s dictatorship, Spain was isolated internationally between 1939 and 1959. The strategic position occupied by the Mediterranean Sea attracted U.S. interest during the Cold War, facilitating its opening to the outside and its entry into the UN in 1955. Since then, Spain has experienced significant economic and social development and now figures as a member of the European Union. Additionally, it is part of numerous international organizations, expressing the desire and need to resolve problems through dialogue and cooperation.
Defensive Organizations for International Security
One of the most important organizations is the North Atlantic Treaty Organization (NATO). This organization was founded after the Second World War in 1949 to face potential threats from the communist bloc. It is a political-defense organization that aims at mutual assistance, maintenance of peace, safety, and welfare of the member states in case of a foreign attack. After a referendum, Spain finally joined NATO in 1986.
Other organizations of this type include the Western European Union (WEU), which focuses on defense and security in Europe, and the Organization for Security and Cooperation in Europe (OSCE), which deals with security issues, including arms control, human rights, protection of minorities, and the promotion of democracy and market economy.
Economic Organizations
Leading economic organizations in which Spain is also very active include the Organization for Economic Cooperation and Development (OECD). This organization was founded in 1960 to coordinate economic and social policies among member states. Spain joined the OECD in 1961.
An International Organization includes members from two or more countries seeking political, economic, or other cooperation. Globalization has greatly evolved the characteristics and structure of these organizations, which can now be distinguished as public international organizations and private international organizations, as well as political and military cooperation organizations. Apart from the UN, there are organizations that, on a continental scale, achieve varying degrees of political agreements and even integration among member states, such as the Organization of American States (OAS), African Union (AU), and Arab League. Sometimes these organizations focus on specific political areas, such as defending human rights (Council of Europe) or fostering cooperation between political entities (Community of Independent States, CIS).
Other organizations aim at security and military cooperation (Organization for Security and Cooperation in Europe, OSCE). At times, these organizations have been raised as political or ideological points of reference. During the Cold War, the North Atlantic Treaty Organization (NATO) served this purpose based on military cooperation against the communist bloc represented by the Warsaw Pact. In the case of NATO, after the end of the Cold War and the disappearance of the communist regime, its principles and objectives shifted.
Spain is a member of the Council of Europe and OSCE, a permanent observer of the OAS, and a member of NATO since its admission in 1982. Institutions of the European Union to ensure effective functioning among member states, the EU’s institutional structure was amended by the Lisbon Treaty (2007). The main institutions of the European Union are: The European Council, which is the supreme policy-making body of the EU, composed of the Heads of State or Government of member states and the President of the European Commission. The foreign ministers and a member of the Commission provide assistance. It is responsible for defining policy guidelines and priorities for the EU.
The European Parliament represents the citizens of Europe. Its members (MEPs) are elected by universal suffrage and organized into political groups according to the parties or ideologies they represent. Parliament exercises the legislative function, meaning it can propose and reform laws and approve the EU budget. It is organized into working committees that discuss various matters. It also controls both the Council of the European Union and the European Commission. The Council of the European Union, formerly known as the Council of Ministers, represents the governments of member states. It consists of one minister from each state, which varies according to the topic being addressed. The presidency changes every six months among countries. The Council’s main functions include approving laws and the budget, which it shares with the European Parliament. The European Commission serves as the executive body, ensuring compliance with European regulations, proposing legal texts to Parliament and the Council of the European Union, monitoring compliance with treaties, and preparing budgets for Parliament and the Council. The European Commission is composed of the President and Commissioners, all of whom are elected for a term of four years. The Court of Justice exercises the judicial function, ensuring compliance, interpretation, and enforcement of community laws. It consists of one judge from each member country, serving a term of five years. This court serves citizens and community institutions that require its services.
The Court of Auditors verifies that the EU budget is executed properly, ensuring that the income and expenditure of the EU are transparent and that financial management is sound.
Bodies of the European Union
In addition to the institutions, the EU has several bodies dealing with specific areas, including: Consultative Bodies. The Economic and Social Committee represents civil society organizations (unions, employers, consumers). The Committee of the Regions represents regional authorities. Financial Bodies. The European Investment Bank provides long-term loans for capital investment projects, but does not provide subsidies. The European Development Fund helps competitive enterprises. The European Central Bank is responsible for European monetary policy. Specialized Bodies. The Ombudsman acts as an intermediary between citizens and EU authorities, receiving and investigating complaints about cases of mismanagement by EU institutions and bodies, submitted by citizens of any member country or any person residing or having their registered office there.
Construction of the European Union
After the Second World War, several voices advocated for the necessity of building a united Europe, but it was not until 1950 when Robert Schuman (French finance minister) first proposed it. On March 25, 1957, Germany, Belgium, France, Italy, Luxembourg, and the Netherlands signed the Treaty of Rome, which established the European Economic Community (EEC) or Common Market.
After intensive negotiations, the Maastricht Treaty was implemented in November 1992. With this agreement, the EEC was renamed the European Union (EU) and created a new entity that seeks to build a real union, not just a customs union (which was essentially what the EEC had been), but also an economic and political union among many Europeans.
The EU currently comprises 27 members, which together represent a population larger than that of the United States and surpasses Japan and the United States in terms of GDP. The EU has become a major economic and trade power, while it continues to face many difficulties and obstacles in its political integration.
European Regional Policy
The regions of a country do not have the same amount of population, activity, production, income, infrastructure, and welfare. Some of these inequities become even more intense when compared with regions of other countries. This was evident at the time of the creation of the EEC, as it became clear that certain regions of southern Italy, for example, had a much lower level of development than, to cite another example, certain provinces in the Netherlands.
To try to reduce regional imbalances, a European Regional Policy was created to provide support in the form of investments in infrastructure or training. To promote regional development, funds called Structural Funds and later the Cohesion Fund were created. Both funds come from the EU’s annual budget and are managed by the European Commission, but they are sought and supplied by local and regional administrations and private companies.
Between 2004 and 2007, many countries in Eastern Europe joined the EU, and almost all of their provinces became recipients of preferential European regional funds, as these are generally less developed countries compared to the rest of the EU, with significant deficiencies in infrastructure and equipment. All this had significant repercussions for the Spanish regions.
Spanish Integration in the EU
Over two decades after joining the European Community, Spain has finally abandoned its isolation economically and politically, achieving full integration in all areas within the European framework, to the point of being placed in a decisive position among member countries.
Effects of Integration in the Economic Sphere
During the first twenty years, Spain experienced dramatic changes and benefited from community financial aid that allowed it to dramatically increase the welfare level of its population, especially in the poorest regions of Spain. It is worth noting that the economic and social development of present-day Spain is partly the result of the process of European integration.
Since 1987, Spain has received EU funds worth 0.8% of its gross domestic product (GDP). The per capita income in Spain in 1986 was about 68% of the Community’s average, whereas now (in an EU of 27 members) it stands at 98%. EU aid has created approximately 300,000 jobs a year in Spain.
This set of grants has significantly improved the situation in Spain, aiming at balancing and integrating Spain into the European market, so that currently 90% of the investment that Spain receives comes from outside the EU. Moreover, the EU is the destination of more than 70% of our exports and 60% of our imports, confirming Europe as the preferred trading area.
Effects of Social Integration in Spain
The creation of more wealth and prosperity in Spain has allowed for increased social and political stability and, above all, improved consumer capacity, leading European businesses and services to establish themselves in Spain, viewing it as an optimal market for their products.
Despite the efforts made, Spain is still far behind certain aspects of the degree of development of countries that were ahead. However, compared to recently developed countries, Spain is in a privileged position.
The Use of European Funds
Community investments made in Spain have supported numerous and varied financial projects, either as direct aid and support for specific sectors or as contributions to the development of disadvantaged regions. Thus, four out of ten kilometers of roads that cross the territory have been financed by EU funds. Additionally, the expansions of airports in Madrid and Barcelona, the metro in Seville, the City of Arts in Valencia, and the expansion of the port of Las Palmas are significant projects that have been made with the help of the European Investment Bank.
From a social and cultural perspective, social funds from the EU (European Social Fund, ESF) contribute to employment and help improve the training and qualification of people. This enhances their labor prospects. For young people, new opportunities have opened through educational programs such as Erasmus or Lingua (student exchange programs) that have benefited around 180,000 people. The promotion of gender equality is also noteworthy.
In the health sector, Spanish citizens traveling to other EU countries can use the European Health Card, which ensures medical and surgical treatment if needed.
Community Initiatives
Created in 1988, these are a series of programs proposed by the Commission to help member states solve specific problems that seriously affect the entire EU. The implementation of these initiatives has had positive repercussions in Spain. Among these initiatives are:
INTERREG. It focuses on promoting cross-border, transnational, and interregional cooperation and creating conditions for balanced territorial development, especially in the regions at the periphery of the Union.
LEADER. Promotes strategies for sustainable development in rural areas and supports rural development and agricultural restructuring.
EQUAL. Aims to combat discrimination in the labor market.
URBAN. Aims to regenerate urban areas in crisis or decline.
The Gross Domestic Product (GDP) is the sum of wealth produced by a country in a year. Around 1997 (in the EU of 15 countries) and after 10 years of EU membership and receiving a large amount of funds to help its economic development, Spain was still below the European average of GDP (93.3%) and was grouped with the less wealthy countries of the Union, along with Portugal and Greece. At that time, Spaniards produced almost 25% less wealth per person than the more developed countries. However, many other economic indicators show that Spaniards still lag significantly behind other northern European countries in the Community, such as salary indexes and retirement pensions.
Urban Growth in the 21st Century: The Urban Network of Barcelona and Its Dominant Role
The differential evolution of Catalan towns has resulted in a very dense urban network along the coastal and pre-coastal areas, while inland areas are sparse and almost nonexistent in the Pyrenees. For this reason, the urban hierarchy is set as follows:
· Metropolitan Area of Barcelona and Its Crowns. Here, we can distinguish two levels:
– The first level is composed of Barcelona and its metropolitan area, which is the second largest in Spain after Madrid and the first in the Mediterranean region of Europe. The metropolitan area extends from the Llobregat River to Hospitalet de Llobregat, Badalona, Santa Coloma de Gramenet, and Sant Adrià de Besòs, spreading to the coast and the Baix Llobregat (Cornellà, Esplugues, Sant Just Desvern, Sant Feliu de Llobregat, El Prat de Llobregat, Sant Boi, Gavà, Viladecans, and Castelldefels, forming the first crown.
– The next level is called the outer ring, which includes more distant cities, some of which have experienced growth due to strong migratory waves (Mollet del Vallès, Barberà del Vallès).
Cities Outside the Metropolitan Area. These are organized into three hierarchical levels: provincial capitals (Tarragona, Reus, Valls, etc.) with cities that depend on them, such as Tàrrega; 2. Capital Regions (Igualada, Manresa, Vic, Vilafranca del Penedès, Vilanova); 3. Small cities along the coast, such as Palafrugell, Palamós, and Sant Feliu de Guíxols.
The Connection of Catalan Cities with Urban Areas of Spain and Europe: Barcelona holds great importance as a city. However, it is also noteworthy that other cities such as Tarragona, Reus, and Girona, located in the European Mediterranean axis, are acquiring dynamism, with Barcelona as the capital. It is important to connect with other cities in Spain, including Valencia and other major centers in Europe. Meanwhile, Lleida, the political capital and main commercial center of the region, is the urban hub of the Mediterranean axis. However, this city could become an important node in the urban development of the Ebro axis. This urban hub tends to unite the Mediterranean axis with the central region and Madrid, but it has not yet reached a solid enough foundation. The completion of the high-speed train connection between Madrid and Barcelona to Lleida has presented a great opportunity for the capital of Catalonia.