3.2.1 global systems and global governance Flashcards
what is a global village?
no boundaries when there comes to communications and relationships
we can connect with anyone, anywhere in the world at any time
advancements of technology and social media will result in the global village growing
describe the concept of global villages
global village was coined by Marshal McLuhan in the early 1960s
he was a Canadian philosopher who studied media theory
refers to the way various media and technologies has accelerated social interaction and cultural change around the world.
rural villages are no longer separate entities but interconnected parts of a very large community where knowledge, culture and languages has merged into one
how did the internet and social media create a global village?
the WWB helped facilitate the world into a global village
social media allows you to connect with other people regardless of their geographical location and discuss various topics eg politics
what are the advantages of a global village?
- interconnectedness - possibilities are endless when we can connect with people around the world to find new ideas, new thoughts and new solutions to problems we’re trying to solve
- togetherness - basis for peace and prosperity for all nations around the world
- job opportunities - leads to an increase of cultural globalisation and communication
- business opportunities - able to build a network of support that will help you achieve your goals faster than if you tried to do it alone
what are the disadvantages of a global village?
- isolation - leads to focus on electronic communication and we miss out on everyday interactions
- stress - work stress, relationship stress, financial stress and fear of missing out
- lifestyle - technology has made us more interested in the virtual than the real. interactions are less profound than they used to be
- lack of privacy - large availability of wealth of data can be collected about us by various companies
give examples of a global village
Walking into a McDonalds in a place such as Egypt
Visiting a market and buying cashew nuts imported expressly from India
Being in the Caribbean and being able to make a phone call directly to Italy
what is globalisation?
the growing interdependence of countries increasing volume and a variety of trade and technology
process of the world’s economies, political systems and cultures becoming more strongly connected together
what are the 7 dimensions of globalisation?
- economic = TNCs have been instrumental in increasing economic interdependence. WTO has played a vital role in the increase of world trade
- urban = hierarchy of global cities have emerged with London, NYC and Tokyo at the top
- social/cultural = western culture has diffused to all parts of the world through the internet, TV, cinema ect. Branded clothes are becoming popular and cultural transmissions can move both ways
- Linguistic = English is very much the language of the global village
- political = more countries have organised themselves into trading blocs. UN is seen as the world government
- demographic = movement of people across international borders and development of multicultural societies
- environmental = global environmental problems such as climate change are a concern but there are now global attempts to tackle problems
what are the 4 types of globalisation?
- environmental = as the world integrates, global problems occur which require global solutions. need for developed global monitoring systems
- economic = results in the growth of MNC-led integrated global production systems, global markets and global finance aided by free flows of capital and trade. Encourages FDI, internationing investment flows
- political = financial systems interlock trade blocs such as the EU and evolve full unions
- cultural = made possible by communication technologies which circulate globalised news and media events. global migration encourages multi-cultural hybridisation producing diaspora (geographical and political boundaries sharing a common culture)
how is globalisation measured?
KDF index of globalisation introduced in 2002, measures three dimensions of globalisation
- economic dimension = long distance flow of goods, capital, services, as well as information that accompanies market exchange (37%)
- social dimension = speed of ideas, information, images and people (38%)
- political dimension = diffusion of government policies (26%)
what else does the KDF index measure?
- actual economic flows
- economic restrictions
- data on information flows
- data on personal contact
- data on cultural proximity
what are the top and bottom 5 countries in terms of globalisation?
top: Switzerland, Belgium, Netherlands, Sweden, Germany
bottom: Somalia, French Polynesia, Greenland, Guam, Puerto Rico
what makes countries more globalised?
high levels of imports + exports = influential role in the global finance sector
numerous international organisations + interconnectivity
what is the future of globalisation?
financial speed has caused a reduced speed of globalisation as it triggered more internal policies focusing on themselves
trade between America + China due to trump allegations about 5G and pandemic caused a rift in their trading relationship
wards eg Russia + Ukraine caused an effect on globalisation
social globalisation: international students, tourists and embassys
what was the remittance dilemma in Somalia, 2012?
40% of somalin’s rely on remittances to meet their own needs
they account for 50% of GNI + 80% of all investment in the country
in 2012, concern was that remittances were falling into the hands of terrorist groups
US + Uk withdrew money transfer services
how is the flow of electronic waste similar to other flows eg capital?
mainly sourced from HICs such as USA, Japan and imported to LICs
raw materials are sourced from LICs to HICs
major source regions all corresponds to HICs with destination countries being LICs due to low labour costs
waste is sent to LICs for recycling and more lienant environmental laws
describe flows of labour
labour markets are not as free flowing as financial markets. people move less easily around the world rather than money because of restrictions on immigrations
phenomenal rise in the number of migrants crossing international borders, mainly seek better employment opportunities
movement
from developing countries eg south Asia, Africa
major destination for movement of labour has been around the oil rich gulf states of Qatar
most migrants move over short distances within the same region or between neighbouring regions
Latest inter regional flows of labour is in Asia. In 2010-2015 around 3 million workers moved from south to west Asia.
describe flows of product
flows of manufactured goods has increased significantly in recent years. stimulated by demand from affluent populations in developed countries, combined with production costs because of mass production and low wage economies
international movement of products is facilitated by the reduction in costs and by the creation of regional trading blocs of nation
translation costs have been reduced by the improvements in flows of data and the ease in which capital can be transferred to pay for transactions
transport and time costs have been reduced by the process of containerisation which has enabled more complex and long distance flows of products can speed delivery and reduce costs of more valuable cargo
describe the flows of service
services are economic activities that are traded without the production of material goods
- high level services = services to businesses eg finance, investment and advertising
- low level services = services to consumers such as banking, travel and tourism
dependant on communication and the transfer of information. can locate anywhere, advancing technology enables services to customers worldwide
name two trends in the flows of service
- high level services are concentrated in cities in the more developed world such as London
emergence of east Asian economies such as Hong Kong they have become major global financial centres - decentralisation of low level services from the developed to the developing world. call centre operations have moved from the UK to India. Call centre operations have moved from the UK to India due to labour costs being 20% lower in the UK. India’s economic success can be attributed to its growing service sector
describe flows of information
governed by the movement of people through migration and by speed of data and communication transfers. both are responsible for the transfer of cultural ideas, language, industrial technology, design and business management support
- improvements to global telephone networks, making communications easier and cheaper
- mobile telecommunications technology
- email and the internet - enables large amounts to be exchanged instantly across the globe
- live media coverage available on a global scale because of satellite technology
what is the importance of information flows?
contributes massively to the expansion of knowledge in intensive goods and services
these skills are included in intensive research and development components and use highly skilled and educated labour
industries need the exchange of ideas and flows of expertise to flourish
what is global marketing?
process of promoting, advertising, selling products or services
companies become more global + view the world as a single market
fits the various regional marketplaces with same product
develops a recognisable brand
having one marketing campaign generates economies of scale for the organisation, which reduces costs
what are the patterns of production, distribution and consumption?
globalisation created a fairly simple division between:
- highly skilled, highly paid, decision makers largely concentrated in developed countries
- unskilled poorly paid assembly occupations located in developing countries
radical changes with LICS undergoing rapid economic development
what factors have accelerated the pace of globalisation since the 1990s?
trade: role of WTO, more free trade and trading groups
communications: ICT/mobile phones + internet revolution
transport: faster transport by air, road and rail
increased size of aircraft and integrated air traffic networks
collapse of communism: make countries develop market economies
transnational corporations: growth of TNCs through mergers and expansion eg Microsoft
capital/investment: increasing capital mobility
global marketing: rise in significance of global brands eg McDonalds
containerisation: vast quantities can be shipped globally at low cost
break bull shipping - unloading and loading cargo into ships from trucks
migration: role of WTO; more free trade, trading groups
security: traditional security measures have reduced, more mobile and better informed populations
what are international financial institutions?
governments have trade departments whose aims will be to facilitate trade and encourage exports
UK trade and investment departments offer support and advice on all aspects of trade to encourage business and help export countries
customs is completed before they reach the docks
deregulation of financial markets has allowed arrangements for the removal of government barriers to movement of finance
international trading is easier and faster
how do financial systems promote globalisation?
global financial system governs the flow of capital between countries
financial systems are based on companies called investment banks - aim to help companies raise capital by selling shares on behalf of those companies
people buy shares which are called investors and they receive a small proportion of profits
- information technology = allows investors greater access to information. Investors and investment banks could easily find out whether a company was doing well or struggling and make an informed decision on whether to invest
- investment banks created new financial products that made foreign investments are less risky
- financial deregulation = relaxed regulation on what banks are allowed to do, charge for their services as well as allowing banks to invest in their businesses
Also involves removing barriers to capital coming in and out of a country - greater range of companies involved in finance - commercial banks also began selling shares. Enabled investment banks to take on a greater number of services eg exchanging currencies between countries to allow them to trade across national borders
describe the management of information systems
- companies supply chains have become global - a companies supplier may be in a different country to their factory - which is in a different country to their research and development department
ALLOWS COMPANIES TO MINIMISE COSTS - large companies can benefit from economies of scale - average cost to a firm of making an item is usually high if not many is made. Large companies can reduce the average cost by PURCHASING SPECIALISED EQUIPMENT AND USING PRODUCTION LINE.
May be able to buy raw materials in bulk for cheaper. GIVES ADVANTAGE OVER SMALLER COMPANIES - outsourcing - company pays another company to do work to save costs. CHEAP LABOUR MEANS COMPANIES CHOOSE TO OUTSOURCE ABROAD.
- companies working practices have changed - casual and temporary contracts to take on workers and when they are required
NO FIXED WAGES PER YEAR, SO THEY SAVE MONEY
how have transport and communication systems improved global business ?
- improved transportation systems eg high speed rail networks have allowed people and products to get to places around the world more easily
- uniform metal containers were introduced in the 1950s - this allowed more goods to be loaded onto ships at once and transferred straight onto other transport methods
made it easier for goods to be moved quickly and cheaply around the world - communication satellites were first launched into orbit in the 1960s - allow relatively cheap wireless communication between two devices. Companies based in rural/remote areas can access the Internet and communicate with others
- optic fibre cables - use signals of light to transmit more information than any other cable. Fast communication that is almost instant
- significant growth in free communication eg text messages
how to trade agreements remove barriers to trade?
global trade system
- trade is primarily regulated by countries governments - they control which products are let into the country and the prices they are sold at. Controls include tariffs, non-tariff barriers and banning products
- controls make it more expensive for companies to sell their products above, as well as for consumers to buy them
- trade agreements - contracts in order to remove barriers in both countries. BENEFITS BOTH COUNTRIES COMPANIES AND CONSUMERS
bilateral trade agreements = trade agreements between two countries - multilateral trade agreements = trade agreements between several countries
multilateral and bilateral agreements make up the global trade system - global trade system is governed by the World Trade Organisation (WTO). Established in 1995, the WHO sets rules on how countries can trade with each other
FORUM FOR COUNTRIES TO NEGOTIATE TRADE DEALS AND SETTLE TRADE DISPUTES
list some advantages of trade blocks
- improves peace and security
- increases global trade and cooperation
- helps increase and develop their economies
- allows entry into the global trading competition
- increases representation in world affairs
- allows people seek work to move easily
- spreads democracy and human rights
list some disadvantages of trade blocks
- loss of sovientry and decisions are centralised
- loss of financial control to central legislation
- pressures to adopt central legislation
- certain economic sectors
what is the international monetary fund (IMF)?
- oversees the global financial system
- offers financial and technical assistance to members
- only provides loans if it will prevent a global economic crisis
- draws its financial resources from the subscriptions of countries
- employs 2,300 staff from 185 member countries and ejects a European MD
what is the world bank?
- promotes economic development in LICs
- provides long term investment to reduce poverty
- provides interest free loans
- gets resources from borrowing on the international bond market
- employs 7,000 staff from 185 countries and American president
what is the world trade organisation?
founded in 1995, has over 160 members and deals with the global rules of trade between nations
supervises and liberise trade by removing barriers
act as a arbitrator sorting out trade problems between member governments
negotiate agreements that become legal ground rules
provide stability by giving trading nations
what are transnational corporations?
companies that operate in two or more countries with headquarters based in one country but business operates in others
- to escape trade barriers eg Nissan’s decision to produce cars in Sunderland to gain access to the EU market
- to find the lowest cost location for their production
- to reach foreign markets more effectively
- to exploit minerals available in other countries eg BP
describe some characteristics of TNCs
maximising global economies of scale by organising production to lower costs
sourcing raw materials/components at the lowest cost
controlling key supplies
control of processing at each stage
branding of products
outsourcing of products
what is a spatial organisation?
TNC’s become easily flexible in the global location of their assets
HQs are based in the home country but TNC’s may have subsidiary HQ in other countries
TNCs will engage in research and develop
what is the primary sector of TNC’s?
production of TNC’s will be baed whether there are unexploded resources, moved to developing regions
however due to a combination of rising world prices and new technologies, access to raw materials may also be viable in the home country
USA + UK = fracking
what is the secondary sector of TNC’s?
production has largely occurred in the manufacturing regions of developing countries, especially in South East + South Asia
