Global Systems and Global Governance Flashcards
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globalisation
the process by which the world is becoming increasingly interconnected through money, culture, people, ideas and goods
globalisation dimensions
flows of labour, services, capital and information
patterns of production, consumption and distribution
the flows of labour
international migration increased by 40% 2000-15
voluntary vs non-voluntary
high skilled vs low skilled - high wages, better working conditions, employment
interconnections - diverse culture + families worldwide
less mobile than capital
main flows: S.Asia + Africa + L. America to N.America + Europe + gulf nations in W Asia
mostly between neighbouring nations
higher skilled + wealthier travel further
the flows of services
ICT improvements: globalised industries, communication dependent, location anywhere in the world to serve customers - footloose services
Growing fin servs: Toronto and Zürich
1970-80s deregulation opened financial markets e.g UK and USA - allowed easier business across seas
Low level services e.g customer service - LICs due to cheap labour costs
High level services e.g fin servs - HICs e.g NY
International banks connect people globally
The flows of information
Quick and easy
E.g financial data or news
Emails, internet, social media
People communicate across seas - enhances business communication
Learn about different cultures, languages, ideas, technology, design etc
Digitisation + satellite tech + mobile tele tech
The flows of capital
Investments to produce income or profits
FDI increased: $400 bil 1996 to $1500 bil 2016
ICT encourages flows due to instantaneous movements via internet
Many nations depend on FDI
Deregulation - removal of restrictions on capital movement: FDI, repatriation of profits, aid and remittance payments
FDI: dominated by EU & N.America HICs
Rep profits - leakage back to host, usually HIC TNC
Aid - bilateral or multilateral agreement, emergency aid via NGO or Red Cross, development aid
Humanitarian relief Vs dependency
Remittance - 2nd most important income in LICs, cash boosts economy + provides hard currency - largest US to Mex 22.2% of GDP
The flows of products
Historically produced and sold domestically
Recently manu decreased in HICs e.g UK 5 mil 1985 to 2.6 mil 2014
LIC low costs encourages production side of business to relocate, then import to where sold e.g Dyson relocated manu side to Malaysia 2002, yet still sold in UK
Specialisation
International trade increased: UK imported £200bil manu goods in 1990, £550 2008
Containerisation - system of standardisation using large packing boxes - long ship journeys
Reduction in transactions costs via improved flows of data + payments
WTO free trade through reducing protectionism
Global marketing
Operating across one single market
Recognisable brand - identify logo or name
Fast food chains e.g McDonald’s with adapted menus in China + India - glocalisation, laws + cultures
Eos - cheaper to have one marketing campaign
Global patterns
Production - TNCs tend to relocate overseas, deindustrialization in HICs e.g UK coal mining, government incentives
Distribution - improved transport times + costs dropped, communication improved too
Consumption - mainly developed econs, NEEs e.g BRIC have growing spending power, demanding more
Factors in globalisation
Development of tech, systems and relationships: financial, transport, security, communications, management + information, trade agreements
Factors in globalisation: financial - global financial system
Electronic trading systems - rapid and secure
Deregulation of fin servs - removal of barriers to allow overseas + relaxed rules for banks
Investment banks create new financial products - less risky FDI
Increased range of company involvement e.g commercial banks now sell shares
Increased range of investment bank services e.g currency exchange to allow trade across borders
Factors in globalisation: Transport
1950s Containerisation - cost reductions + improved efficiency
Cheaper and more efficient computerised logistic systems + data analysis
High speed rail, larger and faster ships and planes - movement of people and goods
Factors of globalisation: communication
1960s satellites launched - cheap wireless communication - rural or remote areas accessable
Optic fibre cables using light to transmit more info than other cables - instantaneous communication
Software developments allow free communication, e.g email hosts, text services
Business and individuals benefit
Factors of globalisation: security
Increased threats
- organised crime
- terrorism
- bio security
- fiscal security
- smuggling - World’s Custom Organisation
Solutions
- trade etc increases interdependency, reduces urge for war
- working together to tackle security breaches e.g NATO 1949 aim to provide security post Cold War - grouping together deters common threats
HICs intervene in conflicts with LICs securing resources like oil
Factors of globalisation: management + info
Global value chains
Global production network involves complex system of flows of info, fin, cap and con goods
Costs vary across different companies
JIT allowed costs reductions e.g car manu + computer industry
Eos - large bulk buying etc to provide for larger market maybe across the world
Outsourcing - paying another company, usually saves costs e.g cheap labour, call center abroad
