AFP Futures Centre: Globalisation

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Globalisation has been the defining shaper of international society over the past 30 years, linking people, neighbourhoods, cities, regions and countries more closely than ever before and driving unprecedented new flows of people, information, ideas, and goods and services.

It has been enabled by a revolution in information and communications technologies involving digitisation, mobile telephony, personal computing and social networking.

Globalisation has transformed the international economy by reducing to near zero the cost of transferring information around the world. By freeing the movement of capital and making possible the development of global manufacturing supply chains, it has brought sustained aggregate growth to the developed world, including Australia, and made it possible for large areas of the developing world to participate fully in the global economy. Globalisation has helped reduce the number of people living in poverty around the world by more than 1 billion since 1990. Information and data flows now account for more growth in global GDP than trade in physical goods.

Globalisation has also encouraged and facilitated world-wide urbanisation.

For the first time since humanity’s shift into cities began some 10,000 years ago, more than half the world’s population now live in cities. The proportion is expected to rise to 66 per cent by 2050 and cities themselves will grow in size as more megacities develop.

Currently, more than 80 per cent of Australia’s population live in its 20 biggest cities, and the majority of our future population growth is expected in and around the capital cities.

Globalisation has also assisted and driven an unprecedented movement of people. In 2014 more than 230 million people lived outside their country of origin. The number of international migrants has grown rapidly over the past 15 years, propelled by both economic drivers and conflict.

Infographic: The Global Flow of People
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Around 5 per cent of the global population is contemplating or undertaking migration at any time. The number of people (foreign students, visitors, and migrants) entering Australia is projected to increase significantly.

Evidence is now suggesting, that globalisation is generating resistance. The worst global financial crisis since the 1930s, apparently unrestricted movements of people including workers and asylum-seekers, and the rise of violent extremism and terrorism, have led voters in many parts of the developed world to respond anxiously to some of globalisation’s economic and social consequences.

Economic polarisation, evidenced in high levels of youth unemployment, homelessness and poverty, is casting an increasing number of young people into extremely vulnerable situations. Social alienation and disaffection with a social system often leads to survival crime and public displays of defiance and resistance to authority. The impact of this will be determined largely by the extent to which these conditions continue over the coming decades.

Globalisation has brought many benefits, but it has also ushered in a step change in global risk.

Australia’s place in the globalised economy exposes it to increasingly powerful transnational illicit activity. The cost of involvement in transnational criminal activity is asymmetric to the affect such activity has on the economy. Approximately 70 per cent of Australia’s serious and organised crime threats are based offshore, or have offshore links.

The Impact of Transnational Crime on the Economy

Organised crime is recognised as an issue of national security. Organised crime costs Australia in the order of US$36 billion annually (as at 2015). It also causes great harm to individuals and the broader community. The UN Office of Drugs and Crime (UNODC) has estimated that criminals launder about 2.7 per cent of world GDP annually. Cybercrime currently costs the global economy an estimated US$445 billion per annum. It is likely to become one of the most prevalent and lucrative criminal activities in Australia.

From the Al-Qaeda attacks with aircraft in New York and Washington in 2001, to Daesh’s sophisticated use of social media to radicalise individuals, terrorists have proven adept at using cutting-edge technology to communicate securely, publish propaganda, transfer funds and undertake reconnaissance securely and remotely.

The economic impact of global terrorism has been rising steadily since 2010. The Institute for Economics and Peace calculated its cost at more than $52 billion in 2014. The 9/11 attacks were initially estimated to have cost $27.2 billion, but the inclusion of indirect and long-term expenditures brings the amount closer to $3.3 trillion.

Interstate and intrastate conflict with regional consequences and large-scale unregulated migration, are among the top five most likely risks to global security.

Over 65 million people are now displaced worldwide due to persecution, conflict, generalised violence or human rights violations.

Environmental stresses are also contributing to global uncertainty.

As carbon pollution pushes atmospheric greenhouse gases to the highest concentrations ever recorded, more extreme weather events and natural disasters are likely, particularly in South Asia, East Asia and the Pacific; where around half the world’s major natural disasters occurred in 2014. This is likely to lead to more frequent demands for humanitarian relief operations and to drive further migration and movement.

The global population is expected to reach 8 billion in 2025. Rising numbers of people and expanding urbanisation will increase the contest for space and resources. By 2030 the demand for food, water and energy will grow by approximately 35 per cent, 40 per cent and 50 per cent, respectively. Almost half of the global population will live in areas of severe water stress. Fragile states in Africa and the Middle East are at most risk of food and water shortages. All of this is likely to drive further large-scale involuntary migration.

Infographic: The Refugee Project
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Australia is a wealthy country, but its wealth, interests and viability are spread globally and depend strongly on international exposure. As the Australian population grows to between 36 million and 48 million by 2061, more Australians will seek to live and invest offshore and more of the world’s people, goods, ideas and communications will reach Australia, either physically or through the internet.

Despite the emerging resistance to globalisation, the technologies that made it possible, and the new technologies discussed below, cannot be uninvented. States will remain the most important voice in international affairs but the influence and capacity of non-state actors – ranging from private companies to terrorist groups – will grow, challenging the state in some areas. The challenges that globalisation and its related technologies present to state sovereignty, traditional boundaries and the business of policing will continue.

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