Concept:
- Distance used to impose three separate costs, the cost of moving goods, the cost of sending a message, and the delay before either arrived.
- New technology cut all three, and that is what connected the world.
Step 1: The cost of moving goods fell.
Improvements in transportation technology over the past fifty years made delivery over long distances both faster and cheaper. Goods that once could not survive the journey, or could not bear the freight charge, now travel easily.
Step 2: The cost of sending a message fell to almost nothing.
Electronic mail and voice mail cross the world at negligible cost, and the internet supplies information on almost anything within seconds. A firm no longer has to be near its supplier or its customer to deal with either.
Step 3: The delay disappeared.
Telecommunication facilities, supported by satellite communication devices, allow instant contact even from remote areas. An instruction given in one country can be acted upon the same day in another.
Step 4: What became possible once all three costs fell.
Production itself could be split between countries, with each stage carried out wherever it is cheapest. A news magazine for London readers is designed in Delhi, sent over the internet and printed in London, because design work costs less in India.
The same logic brought call centres, accounting work and software services to India.
Final Answer: Technology removed the cost of distance, the cost of communication and the delay between them. Once those three barriers fell, companies could spread a single job across continents, which is precisely what connecting the world means.