Globalisation

Question 1

What is Globalisation?

Answer 1

The process of becoming more globally connected and integration of markets on an economical, political, cultural and social scale.

Question 2

5 dimensions (flows) in globalisation?

Answer 2

Flows of capital, labour, products, services and information.

Question 3

What are flows of capital?

Answer 3

Movements of money between countries for the purpose of investment, trade or business production.

Question 4

What regions are the major flows between?

Answer 4

Core regions - The wealthier and more developed countries that tend to have more power that could be used to exploit the less powerful nations.

Periphery regions - The less wealthy and less developed countries that tend to have less power and so could be exploited by the more powerful nations.

IMF - An international corporation that aims to ‘foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and
reduce poverty around the world.’

The World Bank - A global financial institution that gives loans to LICs to help development or relief.

Question 5

What are flows of Labour?

Answer 5

The movement of people between countries that move with the aim of working in the new country.

Question 6

What percentage of the worlds population are international migrants?

Answer 6

3-4%

Question 7

What type of country did the majority of these international migrants move to?

Answer 7

HICs with only 1.6% of LICs populations being made up of international migrants

Question 8

3 highest movements of labour within a continent.

Answer 8

Asia
Europe
Africa

Question 9

3 highest movements of labour between continents.

Answer 9

Latin America to North America
Asia to Europe
Asia to North America

Question 10

What are the 2 types of workers?

Answer 10

Highly skilled - high levels of skills and qualifications and often move to HICs where they an be paid appropriately for the high skills they have acquired.

Unskilled - lack of skills and qualifications, often move to HICs to get better wages or high unemployment in home country. However, large numbers of unskilled migrants could cause overpopulation and exploitation as firms can charge a low wage due to the large labour pool.

Question 11

What are flows of products?

Answer 11

Flows of physical goods from one country to another.

Question 12

What were the flows of products like in the past?

Answer 12

Production and consumption used to mainly be in HICs as they had the money, technology and infrastructure to make and transport the products.

Question 13

What are the flows of products like now?

Answer 13

Due to technological advancements such as improved transport and communication, products are now traded internationally.

Lower labour costs in LICs creates offshoring in which firms move production into LICs where they have lower costs for labour. HICs then import these to make profit for the firm but at a lower cost than if the good was produced domestically.

Question 14

What are flows of services?

Answer 14

Flows of non-physical products that can be produced anywhere and provided over the internet.

Question 15

What are the 2 types of services?

Answer 15

High level services - require a higher level of skills and qualifications such as financial services. These are usually located in HICs, often in hubs in major cities.

Low level services - require a lower level of skills and qualifications that are often consumer based such as call centres. These types of services are often offshored to take advantage of lower labour costs.

Question 16

How has offshoring accelerated globalisation?

Answer 16

Investment and communication between the countries where the firm is based increases globalisation by forcing the interaction and interconnectedness of the economies.

Question 17

What are flows of information?

Answer 17

Flows of information such as knowledge or data between countries over the internet.

Question 18

Examples of flows of information

Answer 18

Fast broadband and connections allows instantaneous transfer of current global events.
Social media increases the flows of information between countries, largely creating an increasing interconnectedness of world cultures.
Real time data such as data on financial markets (stock markets) or just current data used in agriculture and education.
Large databases can be accessed and used over the internet for scientific research or education purposes.

Question 19

What is global marketing?

Answer 19

Marketing products on an international scale due to globalisation and an increase in the flows of information and products/services.

Question 20

2 global marketing strategies:

Answer 20

Raising brand awareness by creating a well known brand and trademark to be easily recognised by consumers. People often trust recognised brands and assume that their popularity and success correlates to a good product so purchase their product over a less well known brand.

Keeping the same strategy to lower costs and keep a working strategy rather than risking a new approach.

The strategy sometimes has to be changed to respect large cultural or religious differences.

Question 21

Summarisation of global pattens of production

Answer 21

HICs dominate automotive products with some exports of steel and agriculture.

Middle eastern economies dominate the oil and fuel industries.

Textile and clothing industries mainly occur in NEEs and LICs due to lower labour costs (offshoring)

China makes up 1/3 of the office/telecom equipment industry.

Question 22

Summarisation of global pattens of consumption

Answer 22

HICs tend to consume more products than LICs due to high demand and incomes in HICs.

Large demand for fuel and minerals in developing economies due to rapid industrialisation.

In very underdeveloped countries such as Chad, the DR of Congo, Georgia and Uzbekistan the levels of imports are so low that their largest is import medical supplies.

Question 23

6 factors affecting globalisation

Answer 23

Financial technologies and systems
Transport technologies and systems
Security technologies and systems
Communication technologies
Management and information systems
Trade agreements

Question 24

How have financial technologies and systems increased globalisation?

Answer 24

A global financial system that incorporates thousands of institutions and banks who lend and borrow internationally has helped accelerate globalisation due to increased connections.

Improvements in communication and the internet has allowed for internet banking and the movement of money all over the world. Also many large banks have branches in other major cities to connect to customers globally.

Question 25

How have transport technologies and systems increased globalisation?

Answer 25

Improvements in transport and its infrastructure has enabled goods to be transported faster and in larger quantities at a lower cost. Large planes, boats and trains has increased globalisation through the connections themselves as well as through trade. Containerisation is where shipping containers are unified and all made with the exact same dimensions and carry the exact same weight, making transporting large quantities of goods easier and more efficient.

Question 26

How have security technologies and systems increased globalisation?

Answer 26

Globalisation leads to increased risks from other countries so improving security has allowed globalisation to increase at lower risks. Stricter regulations when entering a country such as international customs and automatic x-ray analysis has helped control the flow of people and prevent dangers from entering a country. Increases in cybersecurity technology to both track and attempt to prevent cyber security attacks helps to reduce the likelihood of these dangers and further increase globalisation

Question 27

How have communication technologies increased globalisation?

Answer 27

The ability and speed of communications globally helps to increase globalisation by improving connections between countries and freeing the flow of trade and information globally. Satellites and fibre-optic communication has increased the use of the internet and communication via mobile phone systems. In turn this has allowed corporations to communicate overseas, reducing the negatives of offshoring to a LIC, and produce services that move primarily over the internet.

Question 28

How have management and information systems increased globalisation?

Answer 28

Many commons systems in global companies to make them more efficient include: Economies of scale, lowering average costs as firms produce more to a global market. Global supply chains allow companies to lower costs by producing in multiple countries at different stages of their supply chain. Outsourcing by hiring other companies to complete essential tasks that don't need to be done by the firm itself. Can help to lower prices if done in LICs. Offshoring into LICs to lower costs primarily of labour or other factors such as material prices.

Question 29

How have trade agreements increased globalisation?

Answer 29

Trading products internationally can be expensive due to traded barriers such as tariffs, bans and non-tariff barriers such as quotas or bureaucracy. Trade agreements remove or lower trade barriers to enhance free trade, benefitting all within the trade agreement.