**1. Preface**

Globalization means that world has been functioning as a single system, where any countryspecific fluctuations spread over the other countries and being substantial in scope and scale urge them to adjust, even through revision of the domestic policy. The increasing circulation of resources – labor, financial and physical among regions, countries and continents makes the "resource scarcity" senseless, thus impeding the overall technological development and on that way – the global economic growth. In terms of technological and local diversities, the world became more standardized and less unique, which, in turn, engenders its fragility. Undoubtedly, diversity makes the world stronger and, on the contrary, squeezing diversity makes the world weaker!

**2. Creating the global economy after the World War II**

The twentieth century historically is unprecedented in terms of economic growth, elevated by the growth in production output, trade, emergence of new business in services, tourism and information, spreading over the countries, involving their population into economic activities, therefore increasing personal incomes and consuming capabilities almost in all over the world. Peaking point in the global economic development after the World War II was reached in 2008, before the first sign of the incoming economic downturn has appeared. During the period 1950–2007 the Gross World Product has increased from \$5.3 trillion to \$65.6 trillion. – more than 12 times. During the same period the World export has increased from \$295 billion. to \$12 trillion. – more than 40 times. About the growing welfare has been witnessing the following fact: in 2007, at the eve of the world economic crisis the world car sales have reached its highest level of \$1183 billion (or 8.7% of the whole world export) or over 2 times higher than the trade in textile and clothes. The other spectacular fact – the pace of growth of the average income in China, one of the poorest countries in the twentieth century: in 1952 with only 445 CNY per year while in 2016 it amounted 67,569 CNY per year, increasing almost in 152 times! The explanation of that fabulous global economic growth would be inappropriate without mentioning the critically low level from which it originates. After the World War II, the manufacturing capacities, transportation systems, houses in many countries in Europe and Asia were almost totally destroyed. Margaret MacMillan writes: "In Germany, it has been estimated, 70% of housing had gone and, in the Soviet Union, 1700 towns and 70,000 villages. Factories and workshops were in ruins, fields, forests and vineyards ripped to pieces. Millions of acres in north China were flooded after the Japanese destroyed the dykes. Many Europeans were surviving on less than 1000 calories per day; in the Netherlands they were eating tulip bulbs. Apart from the United States and allies such as Canada and Australia, who were largely unscathed by the war's destruction, the European powers such as Britain and France had precious little to spare. Britain had largely bankrupted itself fighting the war and France had been stripped bare by the Germans" [1]. The twentieth century economic story is, the most probably, about the post war recovery, steady growth in production output, successive extension of trade and markets, appearance of new profitable business in services with the involvement of new countries and companies into the global trade. **Figure 1** shows the linkage between the World GDP and growth in manufacturing output, revealing the key role of industrial production in driving the economic growth, creation of new jobs and extension of markets, supplying producers with raw resources and materials and providing sales of final and semi-final goods. **Figure 2** displays the increasing role of trade in the development of global economy beginning from 1990. Elimination of trade barriers, pursued by the World Trade Organization (successor of the General Agreement on Tariffs and Trade, established in 1947 with the inclusion of 164 member states up to 2017 among 196 total number of states in the world2

Technological Reconstruction of the Global Economy http://dx.doi.org/10.5772/intechopen.75096 5

played significant role in developing the world trade and global economy in general.

Some controversy might happen here. The United Nations, for example, recognizes more than 240 countries and territories. The United States, however, officially recognizes fewer than 200 nations. Ultimately, the best answer is that there are 196 countries in the world. The number of the countries in the world. https://www.thoughtco.com/

2

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Scientists, monitoring the economic development, could be, probably, divided on those, who are formally or informally followers of the "steady-state growth" theory and denies the most evidently approaching destruction of the existing global economic system, and those, who recognizes the realities of the Schumpeterian "creative destruction" epoch, similar or even more profound that of the Great Depression in 1930. The different standpoints are reflected in the different insights into economic development and its prospects: "followers" preserve the existing order of things (through reallocation of financial and labor resources, application of the austerity measures, confronting the national identification processes) and "Schumpeterians", who recognize the cyclical mode of economic development, with its essential downturn stage and depression (leading further to the new highs in growth and prosperity, enforced by the application of technological innovations); the emergence of new innovative companies, replacing the "old champions"; and the new individuals-innovators coming to the scene and taking a lead over societies with their exceptional ability of taking a risk of novelty rather than exploiting the way things go on.

Among the multifaceted contradictions of our epoch, the profound transformation of global economic and technological system spurs any other political, ecological, social challenges confronting the global society. Probably the new and more sustainable global politicoeconomic system will originate from the technologically transformed local societies intersected in between and on that way establishing a new model of interregional and subsequently international division of labor as the core of the renovated market economy1 . This is our main standpoint underpinning our further insights into globalization.

<sup>1</sup> The market economy foundation is explicitly explained by A. Smith in his famous investigation "An Inquiry into the Nature and Causes of the Wealth of Nations". He starts his insights into the market economy with the analyses of the division of labor, which enforces gradual technological improvements, leading to the labor productivity growth and hereupon increasing the volume of tradable goods as contribution into the wealth of nations. In his first chapter, entitled "Of the Division of Labor" he writes: "This great increase of the quantity of work, which, in consequence of the division of labour, the same number of people are capable of performing, is owing to three different circumstances; - first, to the increase of dexterity in every particular workman;

<sup>-</sup> secondly, to the saving of the time which is commonly lost in passing from one species of work to another;

<sup>-</sup> and lastly, to the invention of a great number of machines which facilitate and abridge labour, and enable one man to do work of many". (A. [19]). Actually, A.Smith treats the division of labour and technological change as the market foundation in controversy with the "laissez faire, laissez passer" principle, which is usually refers to his name.
