3.2.1.1 Globalisation Flashcards
Define globalisation
A process where national economies, societies and cultures have become increasingly integrated through communities, trade and transportation
Define labour
The aggregate of all human physical and mental effort in production
Define foreign direct investment (FDI)
Net transfer of funds to acquire physical capital overseas
Give an example of FDI
Nissan building a car factory in the UK
Define diaspora
Group of people with similar heritage who have settled elsewhere
Define leakages
Loss of income from an economic system
Can include people
Define repatriation profit
TNCs sending profits back to country of origin
Define aid
Financial support for poor countries
Define remittance payments
Transfers of money by foreign workers back home
Define the BRIC acronym
Identify four countries who have rapidly advanced economically (Brazil, Russia, India and China)
Define the MINT acronym
Identifies recently emerging economies (Mexico, Indonesia, Nigeria and Turkey)
Outline the flows of capital
- money that moves
- deregulation of financial markets allows for financial institutions not to be confined to a single nation
What problems can occur with the flows of capital
- 40% of Somalians rely on remittance payments
- this promotes an informal economy
- this money could be going to terrorist group Al-Shabaab
Outline the flows of information
- boosted by the development of the internet
- cheap and easy communication
- quickly reaches a global audience
Define containerisation in terms of the flow of products
- standardised shipping containers
- makes transporting products cheap and efficient
Define protectionism
- attempts to restrict trade from overseas
- promotes home products
Define tariffs
Taxes on imported goods
Outline flows of labour
- the movement of people (harder)
- generally seen in outmigration of educated people from LICs to HICs
- largest flows are in Asia
Outline flows of services
- traded without any production
- high level services tend to be in world cities
- decentralised, low level services tend to be in LICs (call centres)
Define economies of scale
The cost advantages of having a larger operation
What are the 7 factors in globalisation
- development of technology
- financial systems
- transport systems
- communications
- trade agreements
- management and information systems
- security
How is the development of technology a factor in globalisation
- 3 billion internet users
- very few digital borders
- information can be shared easilyH
How are financial systems a factor in globalisation
- the deregulation of these systems allowed for more relaxed or removed barriers
- increased repatriation profits and remittance payments
How is transport a factor in globalisation
- products and commodities can be shipped more quickly and in larger quantities
- the growth of low cost airlines makes more areas accessible
- containerisation
How is security a factor in globalisation
- restricts more open trade
- anti terrorism and crime
- food and biological security
- anti smuggling laws
How are management and information systems a factor in globalisation
- large production and assembly plants accommodate for economies of scale
- different stages of the production line are situated in different countries
How is Boeing an example of a management and information system
Various parts to create the plane originate from 15 different places
Define marketing
Promoting, advertising and selling services
Define the patterns of production in the 1950s
95% of manufacturing concentrated in Western Europe, North America and Japan
Define the global shift
FDI from TNCs resulted in a shift in the manufacturing industry to LICs
What percentage of manufacturing jobs are in the developing nations
50%
Name an example of TNCs investing in deindustrialised areas
Smirnoff in Scotland
What are the patterns of consumption
Products are typically being consumed in the richer countries while being produced in poorer countries
Name an example of the patterns of consumption
Dyson is manufactured in Malaysia but sells in Europe
Define a free trade area
Reduce trade barriers to increase the trading of goods in a bloc
Define a customs union
Applying similar tariffs to external countries but maintaining free trade with the members
What is the Common Agricultural Policy (CAP)
Subsidies and support programs from the EU for agriculture.
Name 3 disadvantages for trade agreements
- loss of sovereignty
- some loss of financial controls
- pressure to adopt central legislation
What are the aims of NAFTA
- elimination of trade barriers
- increased investment opportunities
- improved co-operation between the three member states
Pros of NAFTA
- trade has tripled between 1993 and 2007
- manufacturing grew in USA
- FDI in Mexico (maquiladora)
Cons of NAFTA
- Canadian companies have closed down due to competition from lower cost US firms
- US firms moving to Mexico causes a loss of jobs
- food surpluses thrusted onto Mexico affecting agriculture
What are the dimensions of globalisation
- flows of services and products
- flows of capital
- flows of labour
