Global Systems and Global Governance Flashcards
What are some of the many dimensions of globalisation?
- Flows of capital
- Labour
- Products
- Services and information
- Global marketing
- Patterns of production
- Distribution
- Consumption
What is Globalisation?
Globalisation is the process in which national and regional economies, societies and cultures have become integrated through the global network of trade, communication, immigration and transportation
What are the 5 flows of globalisation?
- Flow of capital
- Flow of Labour
- Flow of goods and services
- Flow of information and marketing
- Patterns of production, consumption and distribution
What is the flow of capital?
The movement of money between countries for investments, trade or production.
List an example of the increasing flow of capital through globalisation?
Margaret Thatcher’s deregulation of the London stock exchange and the ensuing ‘big bang’ of 1986 which meant nations were no longer restricted by international boundaries
Explain Frank and Wallerstein’s core-periphery model?
Frank and Wallerstein’s core-periphery model distinguishes between a global core and global periphery, wherein the global core is where power in concentrated in a area of relatively powerful and developed nations. Periphery nations are less developed and have suffered from a lack of investment, exploitation which have been worsened by leakages and outwards migration
What is the drawback of Frank and Wallerstein’s core-periphery model?
The model has become largely outdated, with the rapid growth of BRICs and MINT nations.
What are all the flows of capital?
Foreign direct investment (FDI)
Repatriation of profits
Aid
Migration
Remittances
What is FDI?
investment made by TNCs or government into the physical capital or assets of another country
What is the repatriation of profits?
TNCs investing in overseas production will take back any profits to the country of their headquarters, called an economic leakage
What is aid?
Can be the multilateral (UN) or by a number of richer countries ODA (official development assistance) or bilaterally from one nation to another. This aid can come in the form of food, relief or capital in times of disaster by NGOs
What is migration as a flow of capital?
Outmigration happens from poorer -> Richer countries. This can exacerbate inequalities as poor nations lose their skilled labour and pay money into their destination countries.
Although they may send back remittances.
What are remittances?
Transfers of money made by foreign workers in their families back to their home countries. These can often be the second most important source of finance in developing countries, with FDI being the most notable)
What is happening to flows of Labour?
Labour flows are not as free flowing as other flows due to immigration controls. However numbers of international migrants are increasing as they seek better employment prospects for cheaper travel prices. This is an issue because international migrants are often not the poorest within a society, but those with some education.
What are the main/general migrant flows?
- Developing countries in south Asia, Africa, Latin America and war torn nations are travelling to richer areas like the EU or US
- Migration to oil rich gulf states are increasing where the construction boom has provided plentiful employment opportunities.
Explain current developments of the flows of products?
- Transportation costs have reduced by investments in flows of data and increased ease of capital transfers
- Transport times and costs reduced by containerization and increasing efficiency of air travel
- development of WTO has meant less tariffs have greatly improved the flow of trade.
What is the difference between high level and low level services?
High level services = Services to businesses like finances, investments and marketing - this is often concentrated in hubs like London and Tokyo, with growing trans national conglomerates emerging globally e.g. HSBC
Low level services = Services to consumers such as bankers, travel and tourism, customer call centers or communication services - These are moving from developed to developing countries. Many of these services are footloose and can be served to anyone, anywhere, anytime
How has digitisation and satellite technology impacted the flows of information and marketing?
- Improvements to global telephone networks
- Mobile communication technology
- Email and the internet
- Live media coverage on a global on a scale because of satellite technology
What is the emergence of global marketing?
When a company becomes a global marketer, it views the world as a single market and creates products that fit various regional differences, generating marketing economies of scale.
What are the 4 TIGER economies?
Taiwan
Singapore
South Korea
Hong Kong
Why has the decentralization of production occurred?
95% of manufacturing was concentrated in EU, US and Japan in 1954, but due to FDI, TNC’s and lower land and labour costs in conjunction with governmental incentives, there has been a global shift of production and manufacturing abroad
What is the consequence of the decentralization of production on the developing world?
- Manufacturing has fallen by 50% in the developed world since 1983, but this decline has steadied and productivity is increasing again
- More than 50% of manufacturing jobs are located in developing countries
What are the factors (other than lower costs) that affect the location choice of a business?
- Availability of skilled workforce
- Government incentives
- Access to large markets
- Access to most modern plants and most productive technologies
What are forecasts suggesting will happen to distribution and consumption?
- Consumption will drive trade patterns more than production to grow trade routes in India and China
- Asia becoming more competitive with a greater share of their exports going to other Asian nations
- Western companies specializing in finance will benefit from the development of financial services in the east Asian region.