Globalization is one of the most important themes in history. A world that was once totally fragmented by geography, culture, language, and politics has become deeply interconnected. Although this process occurred over a very long time period, it accelerated radically from the nineteenth century. While governments provided the legal and administrative framework and technology defined the parameters of strategic and organizational options, business enterprises were the principal orchestrators of the flows of trade, capital, and knowledge across borders.
The nineteenth century saw the creation of the first real global economy. It was firms rather than markets or governments that drove the enormous cross-border flows of capital and trade. International investment was spurred by the spread of imperialism, which reduced the risks of multinational investment in many regions, and by the emergence of modern industrial growth, which encouraged firms to cross borders in search for markets, raw materials, and foodstuffs. The submarine telegraph cable made transcontinental business organization a feasible proposition, and firms developed new competences to sustain cross-border organizations. Legal and other reforms created more stable corporate structures and widened the possibilities of capital-raising. As firms grew, they became multifunctional and multiproduct, both domestically and internationally.
The role of firms in building the first global economy was remarkable. Multinationals developed new supplies of minerals and oil, and built rubber, tea, and tropical fruit plantations. By 1914 the production or the marketing of most of the world's resources outside the United States was controlled by multinationals, in some instances by only a handful of firms. The global reach of service multinationals was also striking. During the nineteenth century, business enterprises put in place the banking, trading, and informational infrastructure of the first global economy. A global transportation and communications network was built by cable and later wireless telegraph companies. Shipping companies cut the costs and speed of oceanic transport by building global networks of steamship lines which handled the exchange of commodities for manufactured goods which characterized the first global economy, and they transported the millions of emigrants which were such a distinctive feature of it.