3.3 switched on/off Flashcards
(22 cards)
how can u measure globalisation
-kof index
-AT Kearney index
what does the Kof index take into account
Economic – the flows of trade and FDI
Social – personal contact (telephone calls, tourism, foreign population), information flows (internet use, TV, radio, newspapers) and cultural proximity (no. of McDonalds, IKEA and trade in books)
Political – degree of political co-operation, no. of embassies, treaties signed, international memberships.
what does AT index take into account
Political engagement – membership of organisations, contributions to UN, treaties
Technological connectivity – internet use
Personal contact – travel and tourism, phone calls and remittances
Economic integration – trade, FDI
postives/negatives of both globalisation measures
p-trends can be identified
p-provides a rank so switched of and on places are identified
p-can compare changes and data in countries over time
n-subjective in weighting of some factors
n-illegal trade and connections are not included
n-questionable data for some countries
positives and negative fork of index
p-Allows for comparison over time and between countries,
p-Calculated for a number of countries and a number of variables
p-Readily available data
n-Technological developments mean that some indicators look dated, e.g. international mail, given the rise of email and social media, and trade of books given ebooks.
n-Choice and weighting of indicators is value of judgement, and may contain cultural bias (e.g. no. of McDonald’s restaurants)
n-Fewer missing or estimated data is increasing accuracy and comparability.
n-Large number of indicators incorporates wide range of international connections.
negatives of AT Kearney index
-Only includes 62 countries, though these include 84% of the world’s population and 96% of global GDP.
-Small European countries dominate the top 20, though the USA is 4th and Canada is 6th. Smaller countries have higher FDI indicators due to small domestic markets.
-Heavy weighting given to ICT connectivity enables the USA to gain a high index score despite low political engagement in terms of treaties signed.
what are TNCS
A company that has operations (e.g. production, headquarters, sales or customer services) in more than one country e.g. Unilever, Shell and Disney.
They can be described as architects of globalisation, helping to build bridges between nations.
why are tncs vital to the spread of globalisation
their expansion involves free flow of capital, labour, goods and services plus economic development in poorer nations through the positive multiplier effect (PME).
costs and benefits of TNCs
-raised higher standard of living = fyi investment leads to employment of higher paying wages which leads to higher standards of living
-unemployements for those of origin country = due to offsoring and outsourcing
-good growth in economy(wealth) through good connections
-help to unite the rich and poor that otherwise would have not been connected
negatives of being the host country
Profits go to the HQ country
Workers are paid low wages and may be exploited
Health and safety may be ignored
Environmental impacts may be large
positives of being host country
Job creation
Positive multiplier effect
Supplier companies and linked industries may grow
Creates connections with the rest of the world
negatives of being source country
Loss of jobs due to global shift
Derelict land due to factory closures
The costs of regeneration
positives of being source country
Dirty industries and pollution are ‘exported’
TNCs may generate greater profits and pay more taxes (although tax avoidance)
define glocalisation an d why would TNCs differentiate their product
adapting a global product or service to the specific requirements of local practices and cultural expectations.
eg.mcdonalds have different size menus in the us compared to uk
-profits,availbilty of materials, region and culture(halal), wealth of market
how can TNCs make more profit
outsourcing - passing some work onto another company
offshoring - moving operations to another country for lower labour costs
what are switched off and on places and what is an example of switched on places
Switched on: Places, nations, regions or cities that are strongly connected to other places through the production and consumption of goods/services and other elements of globalisation. These are often known as core regions.
Switched off: Places, nations, regions or cities that are poorly connected and isolated from global networks. These are often known as peripheral regions.
global hubs -are ‘switched on places’ that demonstrate a number of intense connections to the rest of the world. Places that others wish to connect to. For example, Europe, North America and SE Asia.
how does cumulative causation link to global hubs
flows of finances and other factors in core regions serve as an advantage as they can further stimulate economic growth = Wealth is circulating in that area
what are explamples of natural/Human Resources that will attract foreign/international migrants and flows of capital and TNC investment
n- oil reserves
n- location ideal for trading
h- large labour force
h-highly skilled workers
h-affleuence(money)attracts service providers
h-languages spoken eg Indian call centres
examples of major global hubs
London
- Population of approx. 9 million. Banking centre of the world - London foreign exchange market is the largest in the world, numerous universities. Migration hub, Heathrow is the largest transport hub in world. Population speak English so many foreign TNCs locate here.
Tokyo
- As a telecoms hub and as a gateway to Asia. It is home to astonishing modern architecture, advanced transportation systems, high-tech industries that are the envy of the world, and Asia’s fashion and entertainment centre.
why do some countries remain ‘switched off’
Poorest nations are relatively switched off. They may lack a global hub or any strong flows of trade and investment with other countries.
What integration with the rest of the world that does exist, tends to be shallow e.g. Overseas aid or providing agricultural products to TNCs (i.e. Will generate very little money and workers will have little spending power)
As a result there is no real market potential (people can’t afford products so there is no little business sense in trying to operate there)
what do you mean by exception to switched of places
a place can still be a global hub even if they don’t acquire much natural or Human Resources to attract investment
eg.las vegas is a big global hub but lacks natural resources and is well connected to the rest of the world
Case study: North Korea , example of a switched off country
hint- political factors explains north Koreas lack of connection to the global economy
North Korea is a hereditary autocracy ruled by Kim Jong-Un.
It’s run as a one-party system with a command economy organised on the communist system.
Since 1955 it has followed the policy of Junche ‘self-reliance’, minimising trade with other countries and outside influence.
Emigration and foreign tourism by ordinary North Koreans is prohibited.
Ordinary North Koreans have no access to internet or social media. There are no undersea data cable connections.
This is because there is a personality cult where all successes are attributed to the wide leadership of Kim, and the internet and foreign travel would not maintain this.
NK had GNI per capita (PPP) US$ 4,600 in 2014 & medium human development (no official UN HDI figure).
However, it does trade with China, and set up the Kaesong Special Economic Zone, employing 52,000 people on the border with South Korea.
