How A Successful Tourism Industry Led to Globalization

Most of us have heard the word “globalization” widely used in a variety of contexts over the past few years. But what is the actual definition of this commonly used term? Merriam-Webster defines globalization as, “The act or process of globalizing: the state of being globalized; especially: the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets.” Now that we’ve established the true definition of globalization, it’s probably easy to see how it plays a vital role in the tourism industry. After all, people visiting other countries would naturally be engaging in globalization as they purchase products and services in their travels. But what may not be as obvious is how successful tourism led to globalization. That is the topic we’ll explore in this blog.

Although it’s hard to say exactly when the tourism industry began, many historians would agree that it probably started when well-to-do citizens of ancient Rome began spending their summers in other parts of the region to escape the hustle and bustle of what was then (and is, even now) the metropolis of Rome. That would mean that tourism is, at the very least, about 2,000 years old. But the end of the Roman Empire also meant the end of tourism, albeit only for a few hundred years, as unrest in that region made travel of any sort a risky proposition at best. A few hundred years later, during medieval times, the tourism industry experienced a rebirth when large groups of people began to make holy pilgrimages. That meant that those people needed places to eat and sleep along the way. Another few hundred years later, people began to travel for other reasons – such as to improve their health and to view art, architecture, and visit historic locations. It was at this time, during the Industrial Revolution, when the tourism industry began to take the familiar form that we know today. Methods of transportation were developed, as were hotels and restaurants, to cater to tourists. Finally, beginning in the 1960s, as aircraft and ocean liners became more commonplace and more affordable for the masses, tourism became a global industry. In our day and age, if you have the time and the money, you can arrange to travel, quite literally, anywhere on the planet.

And, as it turns out, many people DO have the time and the money. According to The Statistics Portal, between the years of 2006 and 2017, the travel and tourism industry contributed $8.27 trillion dollars to the global economy. The greatest contributors include North America, the European Union, and North East Asia. While these regions continue to lead the tourism charge, other less-likely countries are making their own mark in the industry, undoubtedly due to the lucrative possibilities that tourism brings with it. Some of the most notable are African countries, such as Namibia, Zambia and Angola, to name a few.

In the KOF Globalization Index of the 100 Most Globalized Countries in 2017, it should come as no surprise that leading the list are many EU countries, including Netherlands, Belgium, Austria, Switzerland, Denmark, Sweden, France, and others. Also on the list – although further down than the EU countries – are Canada and the U.S. The KOF Index of Globalization takes into account three key indicators: economic, social and political. They define globalization as, “… the process of creating networks of connections among actors at multi-continental distances, mediated through a variety of flows including people, information and ideas, capital and goods.” While there’s no doubt about the economic impact that tourism has on the global scale, the other indicators of globalization are harder to measure – namely the social and political influences that the tourism industry brings to the global stage. But if we measure the impact of tourism on globalization with regard to the flow of people, information and ideas, as well as capital and goods, we can say with a certain level of certainty that the success of the tourism industry has more than likely led the way – both directly and indirectly – to globalization.

Trump Wins Trade War As Global Markets Plummet

It is early July, well before this article goes online, yet the landscape is pretty clear from where I stand. The U.S. and China both raised tariffs on $34 billion worth of goods Friday, July 6. This did not deter the S&P 500 from continuing its charge up to the January 26 all-time high. To boot, unemployment is historically low and the Fed is set to raise rates twice before the year ends – all this amidst a stealth discretionary spending recession.

So, how about that trade war? Let’s recap. Most folks would agree that the free trade of goods would be best for all concerned. Goods would be less expensive and those that could not compete on price would do so on quality, leading to a beneficial improvement of goods. All is well and good until protectionism and nationalism rear their ugly heads. Some nations have goods that find it difficult to compete on the basis of price and/or quality. Globally, world leaders of such nations are unapologetic in pursuing their nation’s interests at the expense of others. In trying to avoid the image of the ugly American, we have often placed ourselves at a disadvantage. Nowhere is this more evident than in trade were our trading partners often have a clear advantage.

U.S. Census Data shows that we have a trade deficit with every trading region except for South and Central America and Australia/Oceania. At only $33.14 and $14.38 billion, respectively, the last four years and a combined trade of $310.44 billion this pales in comparison with the deficit for the rest of the world, -$844.66 billion, whose combined trade is $3.578 trillion. Below are 2014-2017 averages for most of the world in billions:
Canada: -$20.01
European Union: -$149.61
Asia: -$547.49
Africa: -$2.60

China is a case in point. Aware of the huge financial benefit that comes with their 1.38 billion consumers, they extract huge concessions from their trading partners, including the U.S. When they have not barred certain U.S. business sectors, they restrict or regulate business, place tariffs on goods, or coerce intellectual property release. Note this goes one way; there is no intellectual property sharing.

These noncompetitive business practices are not fair, but until now, U.S. companies have accepted them without much push back as the cost of doing business there. That is until Trump. What Chinese leaders need to realize is that they are not in a good bargaining position and the longer they hold out the more harm will come to their economy.

Here is why. Leaders of the government-run economy are well aware of their history and realize the huge Chinese population is not going to put up with poor conditions forever. To keep discontent at bay, they have a policy of inflated economic growth. According to Trading Economics, they have averaged 11.7% GDP growth for the past 10 years but chinks in their armor are showing. From the 2010-2011 heyday, where GDP grew 19% and 24%, growth has dropped steadily and sometimes precipitously. It was 5.56% and 1.14% in 2015 and 2016, respectively. Little wonder that worried central government figures have made a big push since then for increasing their global exports, including those to the U.S., resulting in a resumption of GDP growth to 9.35% in 2017. The prospect of increased tariffs, which would make their goods less competitive, runs afoul of those plans. China’s economy is struggling and their stock market is testament to that. The smaller Shenzhen composite moved into bear market territory in February and the Shanghai composite closed in bear territory on Tuesday, June 27. The indexes went as low as -26.5% and -25.0 on July 5 but have recently recovered to -22.5 and -21.2%, respectively, as global markets have climbed in tandem with U.S. markets. That is still in bear market territory, which will curtail much need foreign investment. Meanwhile, U.S. GDP is growing steadily, the economy seems to be healthy, and the stock market is nearing new heights. Trump can ratchet up the tariff game longer knowing he has more economic wiggle room. Moreover, he can inflict more pain to the Chinese economy than they can to ours.

To see why, let’s look at the trade numbers. The trade deficit with China has averaged -$358.68 billion the last four years in a rising trend. While U.S. exports have vacillated between $110-129 billion since 2012, Chinese imports have steadily increased from $315 to 375 billion. Last year the deficit was -$375.58 billion, of which $129.89 billion were U.S. exports to China and $505.47 billion were U.S. Chinese imports. Not only is trade unbalanced, so are tariffs. Prior to this year, U.S. tariffs on Chinese agricultural and non-agricultural goods were 2.5% and 2.9%, respectively, while Chinese tariffs on U.S. goods were 9.7% and 5% for the same. True, these had been going down from a 14.1% average prior to 2001 when China joined the World Trade Organization but that was part of the price and tariffs are much higher for some industries.

That Higher Plateau

When nobody listens in a time where temperatures keep rising and tempers flare shows that mankind is no where near capable of healing the wounds inflicted by mortal men. Today, the world is ruled by the unquenchable thirst for power, control, and wealth by those who are blinded by their own greed. When on one listens to reasoning or logic, when no one responds with compassion in times of crisis, and when no one who could make a difference in so many lives through acts of kindness, benevolence and humanity, is the reality of our times.

The constant evolving of technologies that could be used for the betterment of man still is to often delayed, cost prohibitive, hoarded, and otherwise used for the destructive side of man. The greed of some knows no bounds. Through-out history mankind has been both the beneficiaries of innovative technologies and have been casualties of the way man has misused those technologies. Great inventions that have changed the shape of the world and other inventions that have been used not for the greater good of mankind but to inflame the world for selfish gain.

Someone once said that everyone at some point in their life has something so profound to say, write or create that would astound the world. Their ability to convey thoughts and expressions that would elevate all of mankind to a higher plateau are so often not seen, read or heard. Fallen on the deaf ears and blind eyes of those who stand to loose their tight grip on the status-quo is much the reality of today. Too often people are caught in the whirlwind of everyday existence while the power players purposely keep those who shown an authority to improve the status-quo from ever reaching the public. And, the public’s fixation that only people with wealth or in positions of power are the only ones capable of such profound works continues to prevent humanity from reaching that higher plateau.

Sadly, today the world is being denied the instruments in which our lives and livelihoods would be enriched. Purposely denied by a power elite that cares not for the public’s welfare. For years it has been their overwhelming desire to reap more power, control and wealth that has scuttled any attempt by those persons who through their own volition created that something and if given the chance would benefit all of mankind.

Today, so few are listening or seeing the ways in which humanity can rise to that higher plateau. This, when we have a media and too many in government unwilling and incapable of seeing just what certain people are trying to do. And, if only we had access or been able to listen to those individuals who have created the means to enrich our lives our world would be a much better place had we been able to do so.

As it stands today with the world filled with chaos too much of our attention is focused not on those individuals who have that something so important and relevant but on the trivialities of meaningless legislation, aka the boarder wall or some other government policy that supercedes any endeavor that would allow more of the public to be informed that there really is a better way for us all to reach that higher plateau.