2.1.1 Globalisation Flashcards
What is globalisation?
The process of the world’s economies, political systems and cultures becoming more strongly connected to each other.
What would happen if there was no globalisation?
There wouldn’t be any interaction between different countries.
What would happen if there was complete globalisation?
The whole world would act like a single community.
What is globalisation caused by?
Movement of information, capital, products, services and labour between different countries
When did globalisation start to accelerate?
During the 1980s
What has globalisation caused?
Interdependence between countries
What five factors promote globalisation?
Flows of information, flows of capital, flows of products, flows of services, flows of labour
How do flows of information promote globalisation?
- Information (such as financial data or news of current events) can be spread across the world very quickly and easily.
- The development and rapid spread of e-mail, the internet and social media mean that large amounts of information can be exchanged instantly across the globe. This allows people living in different countries to communicate and work together.
- Increasing flows of information are making the world more interconnected, e.g. people can learn a lot about different countries and cultures without leaving their own country.
How do flows of capital promote globalisation?
Capital is money that is invested - it is spent on something to produce an income or increased profit from it.
- Historically, capital was mostly invested within a country, e.g. companies would expand by building new factories or setting up new branches within their country of origin.
- Over time though, the amount of capital invested in foreign countries has increased - this is foreign direct investment (FDI) which increased from $400 billion to $1500 billion between 1996 and 2006.
- Improvements in information and communications technology (ICT) have encouraged flows of capital around the world - it can instantly be moved around the world via the internet.
- Increasing flows of capital are making the world more interconnected, e.g. most countries’ economies are now dependent on flows of investment to or from other countries.
How do flows of products promote globalisation?
- Historically, manufacturing industries were located in more developed countries. The products were also sold in the country in which they were made.
- In recent decades, manufacturing has decreased in more developed countries, e.g. the number of people employed in manufacturing in the UK nearly halved between 1985 and 2014.
- Lower labour costs overseas have caused many companies to relocate the production side of their business abroad - then they import the products to the countries where they are sold.
- As a result of these changes, international trade in manufactured goods is increasing, e.g. the UK imported £200 billion manufactured goods in 1990, and £550 billion in 2008.
- Changing flows of products are making the world more interconnected, e.g. many of the manufactured products bought in the UK have been produced in other countries and then imported.
How do flows of services promote globalisation?
Services are economic activities that aren’t based around producing any material goods, e.g. banking.
- Improvements in ICT have allowed services to become global industries in recent decades. Banking and insurance, for example, depend on communication and transfer of information. Improvements to ICT mean that services can locate anywhere in the world and still be able to serve the needs of customers anywhere in the world.
- During the 1970s and 1980s there was also deregulation and opening up of national financial markets to the rest of the world, meaning it was made easier for banks and other financial institutions to do business in other countries.
- Services can be split into low level (e.g. customer service) and high level (e.g. financial services). High-level services tend to be concentrated in more developed countries. Companies are increasingly locating low-level services to less developed countries where labour is cheaper.
- Increasing flows of services are making the world more interconnected, e.g. people are connected to other countries just through having a bank account - many banks are huge international organisations.
How do flows of labour promote globalisation?
Flows of labour are movements of people who participate in the workforce from one country to another.
- More people are moving overseas - international migration increased by over 40% between 2000 and 2015. Some people move because they have to (e.g. to escape conflict zones), but many people choose to move for work.
- Some migrants are highly skilled workers moving to more developed countries where wages and working conditions are better. Others are unskilled workers who move to look for work because of unemployment or poor wages in their own countries.
- Increasing flows of people between countries are making the world more interconnected, e.g. people bring aspects of their culture with them, and countries are connected because people have family all over the world.
What is marketing?
The process of promoting and selling products or services.
Why has marketing had to become global?
Many products and services are sold all over the world, rather just in the country where they are produced.
What does global marketing involve?
Treating the world as one single market and using one marketing strategy to advertise a product to customers all over the world.
Why does global marketing give economies of scale?
It is cheaper to have one marketing campaign for the whole world, rather than having a different campaign for every country.
Why can global marketing create a global brand awareness?
Consumers around the world identify a name or logo with a particular product or service, so they will purchase that product, rather than a lesser-known competitor.
Why does marketing need to be adapted to regional markets though?
Different populations have different laws and cultural attitudes, e.g. different countries have different laws and attitudes about consuming alcohol.
What has been the driving force behind globalisation?
The development of new systems, technology and relationships in a range of sectors including finance, transport and management.
What do systems include?
Ways of working, procedures and methods of organisation that allow a particular function to be carried out.
What has happened to technology used for information, communications and transport?
It has advanced rapidly - the internet allows people from all over the world to access information, and aeroplanes allow people and goods to be transported around the world swiftly and efficiently.
