🌍 3.2.1.1 - Globalisation Flashcards
What is globalisation?
A process by which national economies, societies and culture have become increasingly integrated through the global network of trade, communications, transport and immigration
What is an economy of scale?
a proportionate saving in costs gained by an increased level of production.
What are international flows of capital?
All financial transfers between companies for investment, trade or production
What are remittances?
Transfers of money from migrants to relatives back home
What is migration?
Generally now the outmigration of labour from poorer to richer nations e.g Poland to England
What is FDI?
Foreign Direct Investment.
Money or assets invested by TNCs in overseas enterprises, Either by merging with another company, setting up subsidiary companies or through shares
What are BRIC countries?
Brazil
Russia
India
China
Rapid economic advanaces during 1990s
WHat are MINT countries?
MExico
Indonesia
Nigeria
Turkey
Recently emerging economies after year 2000
What is repatriation of profits?
Sometimes knows as economic leakage.
TNCs will extract profits from abroad and bring back to their HQ
What is aid?
Either from NGOs, as bilateral agreements between 2 governments or via multinational organisations such as the UN which puts aid from many nations together
What is the IMF?
International Monetary Fund - which aims to allow economic stability and foster international trade
What are the impacts of flows of labour?
- Most migrants have some level of education
- Can afford to move, therefore not the very poorest in giving nation
- Long term issues as people stop sending remittances after 2/3 generation s
Inter-continental as well as long distance
What are flows of services?
An economic activity which is traded without the production of material goods
WHat are high level services?
Services to businesses, such as finance, advertising
What are low level services?
Services to consumers, such as banking, travel, communication
What are the impacts of flows of services? (2)
- Easily traded in a globalised world, no location grounding, offices and call centres can be located anywhere
- Low level services may be outsources to developing nations e.g call centres in India
What are the impacts of flows of products? (4)
- Globalisation means more products need to be transported from place of manufacture and chosen market
- Conmtainerisation make as shipments quick, easy, cheap
- Removal of taxes and encouragement of global trade groups allows for greater levels of trade
- Some objections caused by protectionism’s
What are flows of information?
Both migrants and technology allow flows of information, recent and historic migrants for multiculturalism and information sharing
What are factors in globalisation?
- Communication development
- Transport development
- Financial development
- Information systems
- Security development
- Trade agreements
- Management systems
What are financial factors in globalisation?
Linked to technological developments as well as relaxed trade barriers allowed by governments, the movement of finances around them world has grown hugely
What is protectionism?
Putting barriers in place to prevent and reduce trade in order to maintain internal markets and own manufacturing industries
What is trade and finance liberalisation?
Groups such as WTO encouraging governments to remove tariffs and barriers to trade, to encourage free movement of goods
What is the world customs organisation?
An intergovernmental organisation noted for it work in areas covering the development of international conventions, instruments and tools on topics such as commodity classification, valuation, rules of origin etc
What is the EU secure operator initiative?
Set up and run by the EU in order to ensure secure and reliable end supply chain for all goods and services
HJow is air freight a factor in globalisation?
Faster, more places reached, fresh goods transported in large quantitates, anywhere in the world, cheap, ease of ordering goods
How are cargo ships a factor in globalisation?
Shipping containers are standardise so can be transported universally, large quantities of goods can be transported easily, takes long time but cheap and easy form of transport
How are warehouses and robotics a factor in globalisation?
Anything can be ordered from anywhere in the world and arrive potentially next day due to ease off robotics, less likely to make mistakes and very quick - robots run 24/7
How are budget airlines a factor in globalisation?
Makes more places accessible for normal people, travel on a budget, competition between airlines increases the no of destinations around the world, encourages travel
What are trade blocs?
A type of governmental agreement where regional barriers to (tariff + non-tariff) are reduced or eliminated among countries
What are the advantages of trade blocs?
- Allows trade between many countries
- One economy, one workforce
- Travel between countries is easy, free travel
- Encourages growth of economics., risk sharing
- Trade of services and people as well as goods
What are the disadvantages of trade blocs?
- Countries surrounded by trade blocs but not in them struggle to trade
- Hinders development of countries out inside the trade bloc
- Creates problems sharing, if one country suffers, all do
- Uneven reward for input
- Migration issues, often uncontrolled
- Lack of national control and identity
When did the volume of world trade first increase dramatically?
The late 19th century
What aided world trade to increase in the 19th century?
Multinational banks and global pricing systems, as well as the invention of the telegraph
By how much did global trade increase between 1870 and 1913?
It tripled
How has internal migration affected China?
China has opened to international trade, most factory employees are from China’s rural exterior, moving to the cities for low-grade service and construction jobs
How many rural migrants are there in China’s major cities?
150-200 million
5 dimensions of globalisation?
Flows of information
Flows of capital
Flows of products
Flows of services
Flows of labour
Flows of information 5 key points:
News, financial data
Email,internet, social media
People in different countires can communicate
Interconnected - learn about different cultures
Share ideas - development
Flows of capital 4 key points
Money invested, historically within a country
FDI increased by nearly 4x in last 20 years
Deregulation of financial services
ICT investments encourage flows of capital
Why was the Deregualtion of Financial Services a positive for flows of capital?
Money moved more easily across national boundaries for:
- Trade
- Investment
- Production
Flows of products 4 key points
Historically made and sold in same country
Now made in LIC’s - reliance
Containerisation
WTO removal of taxes and tariffs encouraged global trade
What reduces Flows of Products?
Protectionist economies
Flows of Services 5 key points
IT = global banking
Footloose companies e.g call centres
Deregualtion of financial services means access to large markets
Low level services to LIC’s, cheap labour
High level services to HIC’S
Flows of labour 4 key points
International - some level of wealth and education
Can lead to better working conditions
Can lead to worse conditions i.e Filipino builders in Saudi Arabia live in slums
Interconnected - mix of cultures, family all over the world
Importance of marketing for TNC’s
Promoting and selling products everywhere
1 single market = 1 strategy
Economies of scale - cheaper - increase product
Brand awareness
Why do TNCs marketing campaigns need regional adaptation? (2)
Different laws
Different cultural attitudes i.e alcohol
5 factors affecting globalisation
Transport
Financial
Management and Information Systems
Communications
Security
Factors affecting Globalisation : Transport
Containerisation
High speed rail and faster planes, people and products more around more quickly
Cars and infrastructure
Factors affect train globalisation: Financial
Links to technological advanaces and relaxed trade barriers
Internet means a potential investor can research a company - informed decisions
Factors affecting Globalisation: Management and Information Systems
Allowed companies to change how they manage themselves i.e R&D, manufacturing, sales rarely on same site
Instant communication
Global transfer of money
FActors affecting Globalisation: Communications
Satellites first launched 1960’s - cheap wireless communication
Optic fibres - fast, almost instant communication
Rise on social media and instant messaging
Factors affecting Globalisation: Security
Online security breaches cost £1.5 million each year in UK
Global trade increases global security as countries are less likley to go to war
World customs organisation - stays ahead of crime relating to movement of goods and services i.e illegal weapon trade, drug enforcement
EU secure operation initiative - important with the relaxed tariffs of the trade agreement, if too long movement of goods is slowed
How many people live outside the country they were born in?
216 million
Supply chain security
- Focuses on risk management
- Reduces risks of working with other organisations
- Focus on physical threats like theft and cyber threats
Bio security
- reducing disease outbreaks
- Controlling exports/ imports of animals
Flows of labour
Movement of people from one country to another
