I shall outline the nature of the globalisation, emphasising its economic and cultural dimensions. Yet, globalisation fails to explain the complexity of the new social economy. By criticising a similar term, namely the service economy, I implicitly challenge the useful of the concept of globalisation. Instead, I suggest that the new social economy be better characterised as the widening and deepening of the social and technical divisions of labour, part of a more general process of industrial evolution and capitalist development.

Globalisation is about growing mobility across frontiers – mobility of goods and commodities, mobility of information and communication and mobility of people.

With mobility comes encounters. Global encounters and interactions are producing inventive new cultural forms. In this sense, there emerges a ‘third culture’, ‘hybridisation of cultures’. However, encounters between cultures can produce tensions and friction. For example, the tension between the West and Islamic worlds, anxiety in Europe towards Americanisation of cultural life. Two qualifications:

• social innovation and change co-exist with continuities and tradition in social and cultural life.
• the processes of global change are multi-dimensional, complex and diverse.

Ulf Hannerz argues for two categories of global workers. Symbolic analysts (such as computers programmers, scientists, writers and bankers) occupy positions involving manipulation of symbolic information (data, words, oral and visual representations), and are highly mobile. Transnational organisation man (sic) possesses skills valuable to the corporation, and is dependent on the organisation. He/she can move to many locations in the world. Both categories of person are detached from their national culture. Contrast them with ‘placed-based occupations’ (routine and manual workers in offices and factories), who react to global change in a defensive and negative way.

Inequality is an inherent part of the globalisation process. On the one side, there are business elites, film producers and television actors. On the other side, there are, refugees, illegal migrant workers, and displaced and dislocated families suffering the effects of market forces and corporate decisions.

The global economy has several features:

• national economies are merely ‘units’, all closely bound together;
• the global economy combines instantaneous electronic transactions with the accelerated distribution of physical goods and through ‘just-in-time’ systems;
• the global transformation is closely linked to the growing significance of knowledge and information in the world economy. Information becomes the critical raw material of which all social processes and social organisations are made. What is critical in all economic activities is ‘the capacity to retrieve, store, process and generate information and knowledge;
• the global information economy is based less on the location of natural resources and cheap and abundant labour, and more on the capacity to create new knowledge and to apply it to a wide range of human activities.

Crucial to the development of the global information economy is the information and communication technology. There are predictions of a world characterised by networks of information and communication, involving ‘tele-activities’ (such as tele-work, tele-shopping, tele-education, tele-medicine and tele-viewing, etc.).

There are two approaches to globalisation. A pessimistic scenario: The global corporation develops a closer relationship with cities and regions rather than with nation-states. Cities emerges as an important driving force for wealth creation. In the global information economy, cities and regions are forced to compete to attract to mobile capital and global corporations.

An optimistic scenario: This approach to economic globalisation recognises that the global economy cannot simply override existing social and historical realities. Global entrepreneurs must negotiate local contexts, conditions and constraints. Globalisation is about the creation of new ‘global-local linkage’, establishing new and complex relations global spaces and local spaces. There are two aspects of this global-local linkage:

• corporate firms have to alter and adapt their global products for local markets.
• cities have to exploit local assets and resources to attract industrial and business investment, and other ventures such as sporting events and conferences. Cities must adapt their culture to attract and accommodate the various types of international economic activities. Competitive advantage will be gained through exploitation of local sites, culture and heritage.

In one aspect, cultural globalisation is bringing about convergence and ‘homogenisation’ in world culture. In the case of the media industry, the logic of profit and competition have driven media corporations to enlarge media space and markets, and to break down the old boundaries and frontiers of national communities.

Yet, media corporations have recognised that global reality is more complex. The tension between global and local dynamics concerns corporate marketing strategies and local interests. Globalisation give rise to active cultural campaigning to defend local identities. For example, European countries have campaigned against the threat of Americanisation (or standardisation), and have defended the diversity and difference of European cultures.

Broadcasting has been seen as a major resource to sustain and conserve variety of cultural heritages. Economic Union gives economic support to small producers.

Some broader aspects of globalisation:

• For some, the expansion of shared or common cultural references across the worlds evokes cosmopolitan ideals. Cultural encounters can create new and productive kinds of cultural fusion and hybridity.
• For some, there is a cultural homogenisation and erosion of cultural distinctiveness.
• For a few, globalisation is linked to revalidation of particular cultures and identities.
• Most agree that old certainties and hierarchies of identities are called into question in a world of dissolving boundaries and disrupted continuities.

Three dimensions of global cultural change worth noting:

• it has sought to dissolve the frontiers and divisions between different cultures.
• it involves openness to global dynamics and an acceptance of cultural diversity.
• it rejects global integration, as people remain loyal to local histories, identities and traditions (e.g. resurgence of nationalism and fundamentalism)

It has become a fashionable thesis to argue that the advanced industrial economies are moving from industrial capitalism to service economy (or informational economy or post-industrial economy). Its advocates claim that services are everywhere – transportation and distributive services, business services, consumer services, personal services, repair services and financial services. The service theorists claim that services constitute over 50% of the national income. Aside, ‘the service thesis’ is linked to a political theory of social change, in which the natural forces of the economy lead the way, capitalist social relations are an afterthought, and notions of class struggle and social rupture are banished from consideration.

However, the service economy is better characterised as a widening and deepening of social and technical divisions of labour, part of a more general process of industrial evolution and capitalist development. We shall explore the elements of the service economy into production, labour process, circulation, personal consumption, social consumption and surplus value.

Production: The service theorists fail to adequately distinguish between good and labour-services, arguing that labour-services render a service to the consumer. In fact, all useful goods provide a service – it’s their use-value. To capture the distinction, we say that a good is a material object – tangible and mobile. In contrast, a labour-service is irreproducible and involves a unique transaction between producer and consumer.

Labour Process: The service theorists emphasise the increase in service occupations, stressing the importance of knowledge and mental work in the modern economy. Yet, this simple reduction to service work, conflates three different aspects of the division of labour: extended, hierarchical and mental. Extended division of labour refers to work that takes place before and after products are actually formed by direct, hands-on labour, as well as referring to work complementary to the immediate labour process. For example, the direct labour of car manufacturing requires workers (such as researchers) before the production of cars. Also after the production, workers (such as marketing and advertising agents) are needed. Hierarchical division of labour refers to the work of management: the labour of information gathering, storage and communication as well as supervision and control. For example, a car company has several levels of management to coordinate work. Mental division of labour refers how knowledge and the powers of human intelligence are carried out and by whom. For example, some parts of the production of the car require design and planning, communication and cooperation, evaluation, teaching and learning. To put this simply, in the process of revolutionising the labour process, the technical division of labour has shifted from direct to indirect labour (i.e. hands-on work of processing, assembling and moving materials to regulating, administering, organising and improving production systems.

Circulation: The service theorists lack an overarching concept to explain the different types of services. Instead, we suggest that circulation is a fundamental complement to production in industrial capitalism. Circulation activities pertains to the handling and movement of commodities, money, property, property and information. Circulation is not just an exchange between buyers and sellers: it involves the return of profits on invested capital and accumulation of capital.

Personal Consumption: A consideration portion of final consumption is in the form of personal labour services rather than goods. However, there is no evidence for a significant shift towards personal services. Indeed, the C20th is characterised by mass consumption.

Social Consumption: Three of the most striking areas of expansion in the division of labour in the C20th are health, education and general government. Each involves huge number of workers, great deal of machinery and enormous workplaces. Their outputs are not so much as consumed as ends in themselves, but as essential means of social life.

Surplus Value: Most service theorists do not adequately inquire as the origins of an expanding division of labour, merely crediting it to scientific and technical advance. Yet, the bulk of the service jobs are low-paying, monotonous and low status. At the same time, a select group of skilled workers prosper. The capitalist character of division of labour has not been transcended, but extended and deepened.

Conclusion: After examining the claim that the service economy is the new dominant system, we have revealed the familiar face of industrial capitalism. The capitalist industrialisation has widened, expanded and deepened the division of labour as the locus of social labour has shifted from production to circulation, and from direct to indirect labour.

Far from liberating the powers of humankind from class domination, the new social economy (whether termed as the service or the global economy) remains within the regime of capital accumulation, and the struggle for an alternative persists.