GLOBALISATION Flashcards
Globalisation definition
A process by which national economies, societies and cultures have become increasingly integrated and connected through the global network of capital, labour, technology, transportation and trade.
Flows of Capital
- Capital includes all money that moves between countries which is used for investment, aid, trade or production.
- FDI, foreign direct investment is investment made mainly by TNCs and governments into the physical capital or the foreign enterprises.
- Aid, This is a important source of financial income for LICs, it can be provided through the UN or from contributions from other countries.
- Repatriation of profits, TNCS investing in overseas production will normally take any profit from that investment back to their homes country.
- Remittance payments, Transfers of money made by foreign workers in their homes country.
Flows of labour
- Labour flows is the movement of people from one country to another in search of work, this is essentially migration. It can include economic migrants, refugees and asylum seekers.
- Much of this movement is from developing countries such as South Asia, Africa and Latin America to the richer areas of North America and Europe.
- Another major destination of labour is the oil rich gulf states of Qatar, Saudi Arabia and UAE. Construction boom has provided plenty of opportunities.
- The largest Inter-regional flow of labour is in Asia, between 2010 and 2015 3 million people moved from south Asia to west Asia.
Flows of products
- Flows of manufactured goods have increased significantly in recent years. This has been stimulated by demand from affluent populations in developed countries, combined with low production costs and low wage economies in exporting regions.
- Global shift, Shift in manufacturing to NEEs and countries where labour and production costs are lower, and away from HICs.
- This is facilitated through transport and time…
- Transport and time costs have been reduced by containerisation, a system of standardised transport that uses large standard size steel containers to transport goods. Cheap and efficient.
Flows of services
- Services are economic activities that are traded without the production of material goods, for example financial services.
-High level services, services to businesses such as finance, investment and advertising. These have become increasingly concentrated in cities in the more developed world, such as London, New York and Tokyo. Major centres of financial control. Although empowerment of east Asian economies has risen, Singapore, Seoul and shanghai.
-Low level services, services to consumers such as banking, travels and tourism.
Flow of information
- Information flows are governed by the movement of people through migration and by the speed of data and communication transfers. This is responsible for the transfer of cultural ideas, language, industrial technology and design.
- Improvements to global telephone networks, making communications cheaper and easier.
- Email and the internet.
- Transport networks improvements.
Global marketing
- Marketing is the process of promoting, advertising and selling products or services.
- When a company becomes a global marketer they view the world as a single market and creates products that fit the various regional marketplaces.
- It is cheaper to have one marketing strategy for the whole world and can create brand awareness where people identifty a name or logo with a particular product or service.
E.G Coca-Cola, only minor elements are tweaked for different markets.
Patterns of production, distribution and consumption - Labour
- The highly skilled, highly paid, decision-making and managerial occupations which, on a global scale are largely concentrated in more developed countries.
- The unskilled, poorly paid assembly occupations, which tend to be located in developing countries that have labour costs.
Patterns of production, distribution and consumption - Production
- In 1954 around 95 percent of manufacturing was concentrated in the industrialised economies of Eastern Europe, north America, Japan. Products were largely consumed in the country of origin.
- FDI from TNCs into developing countries has allowed manufacturing tasks at competitive prices.
- More than 50% of all manufacturing jobs are located in developing countries.
- This resulted in global shift, manufacturing industries moved to LICs where labour and production costs were cheaper.
- Transfer of technology driven by TNCs in the developing world has allowed productivity to increase.
Patterns of production, distribution and consumption - Deindustialisation
- This is one of the consequences of global shift, in richer countries people have lost jobs in the manufacturing sector.
- Employment in the UK fell by around 50 percent in the 30 years from 1983 and 2013.
Patterns of production, distribution and consumption -Distribution and consumption
- Product consumption still lies predominantly in the richer countries of the developed world, products that are manufactured in NIC economies and are largely exported to countries in Europe, North America and Japan.
E.G Dyson, UK vacuum cleaner manufacturer moved most of its products to Malaysia but still sells a bulk in the UK.
FACTORS IN GLOBALISATION - Development of technology
Links between countries have significantly grown since the development of computer technology and particularly since the advent and the advancement of the internet. Which has enabled quick and speedy global communication.
This has allowed information, culture and societies to spread around the globe much faster, aeroplane technology has allowed for people and goods to be transported around the world swiftly and efficiently.
FACTORS IN GLOBALISATION - Financial
- Financial technology has made financial information and money easily accessible for people across the world, deepening the connections between countries…
- You can make informed decisions about investments.
- Transfer of money thanks to the internet has revolutionised global finance, allowing the world to be connected.
- People can now buy and sell things globally.
- Remittances can be sent back home with speed and ease.
- International trading is easier and faster due to advancements in tech, financial transactions between importers and exporters are quick and secure.
FACTORS IN GLOBALISATION - Transport
- Innovations in transport have meant products and commodities can be shipped more quickly and in larger quantities as a result.
- These technologies for example…
- Increase size of aircraft, integrated air traffic networks. Planes are built with the intention of carrying goods.
- Growth of low cost, budget air lines increases and increase travel links, facilitates the movement of people. In 2018 the first non-stop flight between Australia and the UK
- Use of standard containers through sea, rail, road and air. Cheaper as less trips need to be made.
- Computerized logistics systems
- High speed rail networks, increase global flows of labour.
FACTORS IN GLOBALISATION - security
- Trading security is a issue, this includes supply chain security, crime and anti-terrorism, food and smuggling.
- WCO, world customs organisation control the flow of goods and people in and out of countries and have introduced measures to prevent this, for example the EU initiative to introduce a ‘secure operator’ quality label, awarded to operators who are meeting EU minimum standards of security.
- Introduction of X-ray tech at airports allows for suspicious objects to be traced.
FACTORS IN GLOBALISATION - Trade agreements
- The purpose of these is for countries to join together and form blocks in order to stimulate and create trade opportunities. Gaining economic benefits from cooperation.
- Makes international trade less expensive and easier. Facilitating the movement of goods and capital between countries.
- Trading goods is expensive due to controls and restrictions…
- Tariffs
- Quotas
- Bans
- Trade agreement remove these barriers and restrictions, making trade easier and less expensive.
- Deals between rich and emerging economies had lifted the number of goods that are traded duty-free from 68% to 87% over the previous ten years.
- Duty free deals between emerging countries has advanced from 28% to 92%, demonstrating a increase in regional trade.
E.G NAFTA, EU
Pros of trade agreements
Global scale
- To improve global peace and security and reduce conflict.
- To increase global trade and co-operation on trade issues.
- Helps members develop their economies and standard of living.
- Manufacturing grew in USA after NAFTA, increasing standards of living.
Regionally
- To compete on a global level with other trading entities.
- Increase free trade. Trade between the three members of NAFTA between 1993 and 2015 quadrupled, rising from 297B USD to 1.14T USD.
- Allow freedom of movement
- Allow labour and people seeking work to move between countries more easily
- Eliminate trade barriers such as tariffs and making it easier for smaller LICs to become involved in trade. AFTA Asian free trade area, Indonesia, singapore and malaysia
- E.G The G7 is represented by 7 member countries that account for 27% of Global GDP. They dominate world trade.
- Raise standards of education and spread human rights.
Cons of trade agreements
- Some loss of sovereignty, decisions are centralised by what some see as undemocratic bureaucracy.
- Certain economic sectors are damaged by having to share resources, E.G the UK sharing its traditional fishing grounds with other EU nations such as France.
NAFTA, some Canadian companies have closed due to low cost US competition. - Reliance on others for certain products, Austria inported 80% of its gas from Russia before the war.
Independence definition
This is the theory that nations depend on each other economically, politically, socially and environmentally. Many countries rely heavily on the decisions of other countries, meaning they would struggle without them.
Political independance
- International political issues require countries working together In order to sole them. Issues raised must have unanimous decisions from nations.
- Countries rely on others to intervene if there is political unrest. Many nations intervened to help the 2016 european migrant crisis, supporting refugees from syria together.
Economic independence
- Countries are dependant on the flows of labour, products and services entering the country in order for the economy to grow. Labour provides a workforce and products and services mean countries can develop and undergo growth.
Oil is produced by one group of countries and consumed by another, they relu on each other to buy and sell the oil and therefore to grow and develop.
Social independance
- Migration has caused social interdependence as there are now groups of the same origin living in another country living all over the world and are dependant on where they live.
- Rely on each other for leisure activities, TV programmes, music and other culture.
In 2015 there were 244 million migrants worldwide, migrants build new relationships and become interndependant with people from others coutnries.
Enviromental independance
All nations are affected by other nations greenhouse gas emissions, nuclear waster emissions etc. meaning all countries rely on each other to protect the environment.
Unequal flows of people
Majority of migration moves from low income countries to high income countries, this is because there are more opportunities to work in high income countries. More people therefore enter high income countries then low income countries.
It is easier for people in developed countries to travel to less developed countries.
In 2017 UK citizens could travel to 173 countries without a Visa, while for citizens of afghanistan it was only 24.
