Week 5: Global Expansionism in Transportation and Communications

2024

Transportation Revolution and Mobility have always been considered as backbone of ‘ New Age of Trade, Mobility, Happiness and Prosperity ’. In fact, from the 18th century to the 19th century, James Michael Walker (2022) found a positive, strong and significant association within the U.S. Transportation Revolution and Prosperity. Fortunately, this association has been extended to the 20th century where the size of the Transportation Sector in the Economy has continued to grow dramatically. Accordingly, Aldcroft, D.H. (1974) who focused on the Transportation Revolution during the 20th century found that there are several interrelated features of the twentieth-century Transport Revolution : - The enormous growth in the use of transportation services and the consequent increase of the size of the transport sector in the economy. - The change in importance of different modes (horse, trains, cars, freight, planes among others). - Significant technological changes which have affected nearly all modes. Since then, Aldcroft, D.H. (1974) found that as a result of this expansion, the transport sector has been absorbing a growing share of national resources, especially since the second World War. For example, in the U.S., Aldcroft, D.H. (1974) found that the transport sector’s share in personal consumption in the United States has grown less dramatically since the war probably because it was already fairly large at the beginning of this period. In 1971 it accounted for 13.55 percent of total personal consumption as against 12.93 per cent in 1950 (US Bureau of Census, 1973). Furthermore, expenditure on transport now forms one of the largest items in personal consumption after food, and in some cases probably exceeds that on housing. Moreover, the Bureau of Transportation Statistics that focused as well on the expenditure on transport in the U.S. from 1960 to 2020 has also shown the growing importance of transportation sector in the life of Americans. Globally and very recently as well, Hedges & Company (2023) finds that there are 1.474 billion cars in the world in 2023. Most are in Asia, followed by Europe and North America. 19 % of all vehicles are in the U.S. As a result, not only the U.S. Transportation sector is considered as the backbone of its prosperity, competitiveness and global leadership but also since the 80s to now, the Transportation Revolution has been strongly associated with the New Age of Trade, Mobility, Happiness and Prosperity. Furthermore, the Transportation sector did help the 20th century and the 21st century become an Era of a Hypermobility and Hyperconnectivity World Economy mainly driven by the growing importance of Automotive-centric, Plane-centric and Maritime-centric (Shipment-centric) Economy. However, of the above Transportation Mode, Air Transport has started to take the lead of transportation while becoming one of the key factors of the New Age of Trade, Mobility, Happiness and Prosperity. Firstly, Air Transport is playing an important role into global mobility. In fact, historically, air transport has doubled in size every fifteen years and has grown faster than most other industries. For example, in 2019 (one year before the COVID-19 pandemic), Air Transport Action Group (ATAG) (2018) found that 1,303 scheduled airlines operate over 31,717 aircraft, serving 3,759 airports thanks to the support of 170 air navigation services providers. Secondly, beyond the mobility, Air Transport is becoming one of the key factors of the current Trade Age and the Global Value Chains Revolution. In fact, while focusing on : « Value of Air Transport and Global Value Chains », IATA (2023) found that Air cargo is key in supporting the current global trading system, with an estimated 35 % of value of global trade carried by air cargo , even though it covers less than 1 % by volume. Furthermore, they found a strong association between better air cargo connectivity and higher total trade value. In fact, a 1 % increase in air cargo connectivity is associated with a 6.3 % increase in total exports and imports. This contribution to the GVCs is more pronounced for the most advanced countries of the North. Accordingly, IATA (2023) found that the role of air cargo is even greater for trade in advanced industrial, high value goods, and other sectors that rely on rapid, reliable and secure transport. In fact , countries such as the U.S. and EU that have well developed air cargo connections combined with good quality customs services and smart borders, are better at integrating into global value chains. Thirdly, the Air Transport also plays an important role into the e-trade as e-consumers and e-producers started to rely mainly on it for their consumption, production and their Just-in-Time Delivery System. Accordingly, Air Transport Action Group (ATAG) (2018) found that Air transport is a driver of global trade and e-commerce, allowing globalization of production. As a result, the Air Transport started to become key contributor to the global GDP. Accordingly, ATAG (2018) found that aviation’s global stature as an economic engine is evident in the statistics. If the global aviation sector were a country, its total contribution (direct, indirect, induced and catalytic) of USD 2.7 trillion to the gross domestic product (GDP) and the 65.5 million jobs it supports, would be comparable to the UK’s economic size and population which is about 3.6 % of global GDP. Furthermore, Aviation provides the only rapid worldwide transportation network, which makes it essential for global business. It generates economic growth, creates jobs, and facilitates international trade and tourism. Fortunately, the contribution of the air transport is called to amplify in the next decades. As a result, the U.S. Air Transport started to become the driving force of its 21st century ‘ Prosperity, Competitiveness and Leadership’. In fact, even when the maritime service continues to play an important role in the U.S. trade and GVC, International Trade Administration (2023) finds that commercial aviation is a critical economic jet engine for the U.S., accounting for 5 % of U.S. GDP and employing over 10 million American workers. The United States is the largest domestic air passenger and freight market in the world-every day, U.S. airlines transport more than 2.4 million passengers and more than 58, 000 tons of cargo. The total value of merchandise exported from or imported to the U.S. by air in 2018 was $1 trillion. Since then, the U.S. is determined to keep the path. In fact, International Trade Administration (2023) finds that to date, the United States has negotiated Open Skies agreements with more than 125 partners on every continent and every level of development. Doing so could strengthen the U.S. 21st Century Space Era. However, the predominance of the U.S. Air Transpoort won’t be enough to guarantee the sustained existence of its global leadership. In fact, China is now becoming the Superpower of EVs. This transformation could China become a global leader very soon. Key Words : Structural, Trade,Technological and Behavioral Changes ; Prosperity Opportunities ; Core-Periphery Configuration ; Gradual Polycentric Configuration ; Transportation Revolution ; New Age of Trade, Mobility, Happiness and Prosperity ; Hypermobility and Hyperconnectivity World Economy ; Automotive-centric, Plane-centric and Maritime-centric Economy ; Just-in-Time Delivery System ; The U.S. 21st Century Prosperity, Competitiveness and Leadership ; U.S. 21st Century Space Era.

Journal of Transport Geography, 1997

This paper concentrates on the dualistic role of transportation as a pro-active agent of globalization and as a beneficiary of its development. Surprisingly, transportation is possibly the least researched element in the complex of factors that foster a changing world economy. The goal is to suggest areas that require an informed social science perspective based on research that will enhance theoretical understandings and policy formulations. Beginning with a focus on changes in the nature of demand for transportation and its supply, the discussion considers issues relating to regional inequalities in accessibility, standardization for multimodal transport, and governance of global transportation. The vulnerability of transport-dependent globalization, and the role of transportation in the dematerialization of society for sustainable development are also areas suggested for extended research. 0 1997 Elsevier Science Ltd. All rights reserved

2024

Structural, Behavioral, Trade and Technological Changes since the 18th century to now have accelerated the shift away of the Western’s and Asian’s Productive Structures from the Resource-driven Economy to the Material-intensive and Routinized Industrial Economy to the Material-intensive and Routinized Industrial Economy to the Material-intensive and Immaterial-intensive Routinized Industrial and Smart, Connected and Service-oriented and Knowledge-intensive Economy. However, the race to global leadership and the role transportation revolution plays into it have made it easier for it to become a matter of strategy. In fact, not only the U.S. Transportation sector is considered as the backbone of its prosperity, competitiveness and global leadership but also since the 80s to now, the Transportation Revolution has been strongly associated with the New Age of Trade, Mobility, Happiness and Prosperity. Furthermore, the Transportation sector did help the 20th century and the 21st century become an Era of a Hypermobility and Hyperconnectivity World Economy mainly driven by the growing importance of Automotive-centric, Plane-centric and Maritime-centric (Shipment-centric) Economy. Moreover, many experts believed that the Westernization of the Globalization (or the global leadership of the West) has been shaped, structured and supported by its global leadership in transportation sector. For example, for so long time, there has been a concentration of the production of the ‘ Oil-centric and Human’s drivers Cars’ inside of the G.7 (US-France-UK-Italy-Germany-Japan-Canada) that did offer significant jobs, investment, growth, income, wealth and productivity, income and specialization gains opportunities that in turn did help the West lead the world. Unfortunately, this era has started to belong to the past. In fact, according to IEA (2023), governments that have been active in the Electric Vehicles Initiative (EVI) in the 2022-23 period include Canada, Chile, People’s Republic of China (hereafter ‘ China’), Finland, France, Germany, India, Japan, the Netherlands, New Zealand, Norway, Poland, Portugal, Sweden, United Kingdom and the United States. Canada, China and the United States are the co-leads of the initiative. However and even more, China has started to lead the ' Electric Vehicle Market and Value Chains'. Doing so could help China lead the world very soon. Since then, it becomes relevant to analyze the driving factors of this transformation in order contain all the potential threats China could pose to the US global leadership. Several factors help understand the rapid transformation of China into a global superpower of EVs. Accordingly, Yang, Z. (2023) found that with generous subsidies, abundant engineering talent, a fair for innovaiton, a huge domestic market and public support for decarbonisation, China has become the dominant producer of low cost EVs. Furthermore, Cluster-oriented initiatives and programs are also playing an important role into the transformation of China as a Superpower of EVs. In fact, according to Yi Wu (2023), China has more than 600, 000 existing NEV-related enterprises. The year 2022 saw 239, 400 newly added enterprises, an increase of 40.34 percent year-on-year. China’s new energy vehicle market has been developing rapidly in recent years, with growing market participants and competition in the industry. Major industry players include BYD Auto, Tesla China, SAIC-GM-Wuling, Aion, and Changan Automobile. These five players have more than 50 percent market share combined. Chengyi Lin (2024) also finds that the transformation of China into the superpower of EVs could be driven by three major factors including : - Experimenting in adjacent industries. - Encouraging operational solutions. - Doubling down on core technology Fortunately, beside the above competitive advantages, Chengyi Lin (2024) finds that the Chinese EV industry enjoys a proximity to many critical raw material supplies. Unfortunately, this dominant position of China will accelerate the deindustrialization of the West and make it easier for the Globalization to driven by a Zero or Negative sum game at the expense of the US and the West. In fact, currently in the U.S., they ( the destructive effects) have accelerated the simultaneous Outsourcing and Offshoring of Downstream, Middlestream and Upstream Activities in the Low-cost Locations of the South. By so doing, they've accelerated the decline of the U.S. Middle Class while in the same time, there has been a decrease or the stagnation of the Highly-skilled and High-income Workforce. Furthermore, they've increased as well the share of the Low-wage Services Jobs in the U.S. economy. In fact, currently, the Low-wage Workers account for 44% of the U.S. Workforce. Unfortunately, doing so did lock the U.S. into a High-income Trap that has been associated with a New Form of Proletarianization and amplification of Socioeconomic Inequalities in Education, Health, Jobs, Income, Wealth and Residential Goods and Services. As a result, while the Capitalisation Effects Outsourcing and Offshoring did help the U.S. become the Most Powerful High-income and Upstream Economy of the World, their Destructive Effects have made it easier for the U.S. to become ' The Second Most Unequal Nation ' of the World behind China. Furthermore, like the U.S., China has also decided to boost its competitive advantage in Air Transport in order to achieve its goal of becoming the leading country soon. In fact, since the 70s, China became the factory of the world due to its competitive advantage in production and assembly mainly for the downstream and middlestream goods and services (James Michael Walker, 2018). However, even when China is the second largest economy, it remains an export-oriented economy with a relative high foreign value added in gross export. Meaning that China relies on the domestic market of its hubs including US, Europe and other regional hubs such as Japan. Fortunately, as second largest air freight market behind the US, China is now increasingly relying on air cargo to get its high tech goods to market (ABBB, 2024). However, the Chinese air transport does not support only its export of electronic goods. In fact, Wenyi Zhang (2024) finds that commercial aviation has been pivotal to China’s economic development in recent years. With a booming middle class, more and more Chinese nationals travel by air, making China’s airlines and airports some of the world’s busiest. As a result, Wenyi Zhang (2024) finds that China does not only have some of the world’s busiest airports. By so doing, the Chinese air transport is becoming the driving factor of its FDI, Trade, Jobs and Prosperity that did help accelerate its integration of China into the global production, distribution and consumption networks on the one hand and transform it into the superpower of the 21st century on the second hand. Furthermore, like the Electric Vehicles, China could massively invest in the Clean-Electric and Fully Autonomous Air Cargo soon in order to become the first largest air freight market of the world. Unfortunately, becoming the Top Low-cost Export-oriented Economy on the one hand and the superpower of EVs and Clean-Electric and Fully Autonomous Air Cargo on the second hand could help China become the Superpower of the 21st century while this transformation in the same time could accelerate the deindustrialization of the West and amplify the destructive effects of outsourcing and offshoring. Key Words : Structural, Behavioral, Trade and Technological Changes; Western’s Productive Structure; Asian's Productive Structure ; Material-intensive and Immaterial-intensive Economy; Transportation Revolution; Transportation Sector; Electric Vehicles Initiatives; Deindustrialization; Outsourcing; Offshoring; U.S. Middle Class; Low-wage Workers ; New Form of Proletarianization; Socioeconomic Inequalities; High-income Trap.

lo Squaderno, 2019

Global infrastructures and logistical networks are being deployed as technologies of geopolitical intent and territorial ambition. Airports, free-trade zones, logistics warehouses and data centers, port expansions and shipping canal upgrades, continent-spanning road, rail and fuel transport projects have all become hallmarks of an infrastructure-led attempt to secure competing national visions of capitalist growth. We offer an illustrative case of the rise of the Belt and Road Initiative, through which China is reshaping the world economy, delineating new political and economic relationships that sidestep established patterns of trade, and signalling a new era where ‘the West’ is no longer the centre of connection, logistical circulation, and political power. Amid the uncertainty of a multi-polar world economy, examining global infrastructure offers a means of tracing out the contours of renewed political and economic turbulence.

Growth and Change, 2006

Just as the replacement of the steamship by container shipping slashed the cost of moving goods across borders, so the information and technology revolution has facilitated the moving of ideas around the globe, while advances in telerobotics will eventually cause geographical barriers to disintegrate. This will create a powerful force that will affect not only the behavior of humans but that of entire states. What we are witnessing now is nothing short of the coming of a new world order. Interconnectedness The quick sharing of knowledge and information in recent times has allowed many emerging countries to become a part of the "global supply chain" phenomenon, in which everything from tiny smartphone components to large industrial components is created. The global supply chain has produced an integrated world network of ports and inland cities across Asia, Europe, Australia, both Americas, and even the deepest reaches of the African continent. China and other Asia-Pacific countries such as Thailand, South Korea, and Vietnam have been at the forefront this phenomenon. This interconnectedness is now so extreme that economic ripples in, say, China can have effects on economies around the world, particularly in developing countries. This development is nothing short of extraordinary given that a mere fifty years ago, far-flung peoples and governments did not have to worry about the economies of China, the US, or any other country. The world was simply not interconnected enough.

Scientific American, 1997

One belt, one road: The shaping of the contemporary world, 2015

Elsevier eBooks, 2021

The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies.