✅3.2.1.1 - Globalisation

Question 1

What is globalisation?

Answer 1

A process by which national economies, societies and cultures have become increasing integrated through the global network of trade, communications, transport and immigration.

Question 2

What is an economy of scale?

Answer 2

Cost advantage of large scale output of a product as savings are made by spreading out the cost over more units- buying parts in bulk is cheap- partly enabled by containerisation

Question 3

What are international flows of capital?

Answer 3

All financial transfer between companies for investment, trade or production

Question 4

What are remittances?

Answer 4

Transfers of money from migrants to relatives back home

Question 5

What is migration?

Answer 5

Generally now the outmigration of labour from poorer to richer nations.
Can also be a refugee fleeing conflict, granted temporary or permanent residency. Asylum seeker, refugee waiting for residency

Question 6

Trends/ stats in migration

Answer 6

average of 14.1% of HICs population are migrants, while only 1.6% in LICs.
Increased since deregulation of travel markets: 1990 to 2014 risen 500m to 3.2b passenger trips.
Plus from 2 of 25 biggest airports being outside of N. America to 16.

Question 7

What is FDI?

Answer 7

Foreign Direct Investments. Money or assets invested by TNCs in overseas enterprises. Either by merging with another company, setting up subsidiary companies or through shares.
In 1990, under 1/5 went into developing countries, now 3/5, + as development slows in HICs.

Question 8

What are BRIC countries?

Answer 8

Brazil, Russia, India and China. Rapid economic advances during 1990s

Question 9

What are MINT countries?

Answer 9

Mexico, Indonesia, Nigeria, Turkey. Recently emerging economies after the year 2000.

Question 10

What is aid?

Answer 10

Either from NGOs, as bilateral agreements between 2 governments or via multinational organisations such as the UN which puts aid from many nations together

Question 11

What is the IMF?

Answer 11

International Monetary Fund which aims to allow economic stability and foster international trade.

Question 12

What are the impacts of flows of labour?

Answer 12

• Most migrants have some level of education
• Can afford to move, therefore not very poorest in giving nation
• Long term issue as people stop sending remittances after 2/3 generations
• Inter-continental as well as long distance

Question 13

What are flows of services?

Answer 13

An economic activity which is traded without the production of material goods

Question 14

What are high level services?

Answer 14

Services to business, such as finance, advertising

Question 15

What are low level services?

Answer 15

Services to consumers, such as travel, communication

Question 16

What are the impacts of flows on services?

Answer 16

• Easily traded in a globalised world, no locational grounding, offices and call centres can be located anywhere due to internet/ networks
• Low level services may be outsourced to developing nations, eg call centres in India

Question 17

What are the impacts of flows of products?

Answer 17

• Globalisation means more products need to be transported from place of manufacture to chosen market (has caused slight push back to more local manufacturing)
• Containerisation makes shipments quick, easy, cheap
• Removal of taxes and encouragement of global trade groups allow for greater levels of trade
  -Growth in cross-border trade in areas with fewer barriers like EU
  -Manufacturing of products decaresing in HICs due to cheaper outsourcing/ offshoring in LICs or industrial countries. 3.4m industrial jobs lost since 1985 in UK.

Question 18

What are flows of information?

Answer 18

Both migrants and technology allow flows of information, recent and historic migrants allow for multiculturalism and information sharing.
Social media has lead to greater cultural homogenisation, education and communication
Largest flow, least limited by place.

Question 19

What are factors in globalisation?

Answer 19

• Communication development
• Transport development
• Financial development
• Information Systems
• Security development
• Trade agreements
• Management systems

Question 20

2 examples of Management and Information Systems

Answer 20

Economies of Scale
Global Supply chains

Question 21

What are global supply chains

Answer 21

A supply chain is the organised management of product flows, from manufacture to delivery
Due to the ability to communicate info & transport products , companies can now have different stages of production in different countries.
This overall minimises costs because each stage of production is specialised rather than having one factory that has to
control every aspect of production, saving time and money.

Question 22

How technology leads to globalisation

Answer 22

Financial systems deepen economic relations
Communications
Travel + Containerisation
Information available on stocks, means investments
Security- cyber security, travel laws- can prevent flows of people but regulation makes it safer, more travel in long term

Question 23

How trade agreements lead to globalisation

Answer 23

Makes international trading less expensive- fewer tariffs
NAFTA lowered/ removed tariffs between USA, Canada and Mexico

Question 24

What are financial factors in globalisation?

Answer 24

Linked to technological developments as well as relaxed trade barriers allowed by governments, the movement of finances around the world has grown hugely.

Question 25

What is protectionism?

Answer 25

Putting barriers in place to prevent and reduce trade in order to maintain internal markets and own manufacturing industries. Can reduce globalisation flows

Question 26

What is trade and finance liberalisation?

Answer 26

Groups such as the WTO encouraging governments to remove tariffs and barriers to trade, to encourage free movement of goods

Question 27

What is the world customs organisation?

Answer 27

An intergovernmental organisation noted for its work in areas covering the development of international conventions, instruments and tools on topics such as commodity classification, valuation, rules of origin etc.

Question 28

What is the EU secure operator initiative?

Answer 28

Set up and run by the EU in order to ensure a secure and reliable end to end supply chain for all goods and services.

Question 29

How is air freight a factor in globalisation?

Answer 29

Faster, more places reached, fresh goods transported in large quantities, anywhere in the world, cheap, ease of ordering goods

Question 30

How are cargo ships a factor in globalisation?

Answer 30

Shipping containers are standardised so can be transported universally, large quantities of goods can be transported easily, takes a long time but cheap and easy form of transport.

Question 31

How are warehouses and robotics a factor in globalisation?

Answer 31

Anything can be ordered from anywhere in the world and arrive potentially next day due to ease of robotics, less likely to make mistakes and very quick. Robots run 24/7

Question 32

How are budget airlines a factor in globalisation?

Answer 32

Makes more places accessible for normal people, travel on a budget, competition between airlines increases the number of destinations around the world, encourages travel.

Question 33

What are trade blocs?

Answer 33

A type of intergovernmental agreement where regional barriers to trade (tariff + non-tariff) are reduced or eliminated among countries

Question 34

What are the advantages of trade blocs?

Answer 34

Allows trade between many countries
One economy, one workforce
Travel between countries is easy, free travel
Encourages growth of economies, risk sharing
Trade of services and people as well as goods

Question 35

What are the disadvantages of trade blocs?

Answer 35

Countries surrounded by trade blocs but not in them struggle to trade
Hinders development of countries outside the trade bloc
Creates problem sharing, if one country suffers, all do
Uneven reward for input
Migration issues, often uncontrolled
Lack of national control and identity

Question 36

What aided world trade to increase in the 19th century?

Answer 36

Multinational banks and global pricing systems, as well as the invention of the telegraph

Question 37

By how much did global trade increase between 1870 and 1913?

Answer 37

It tripled

Question 38

How has internal migration affected China?

Answer 38

As it has opened to international trade, most factory employees are from China’s rural interior, moving to the cities for low-grade service and construction jobs
Plus due to implementation of high speed rail

Question 39

How many rural migrants are there in China’s major cities?

Answer 39

150-200 million

Question 40

Economic flows in core-periphery model

Answer 40

To Periphery:
loans, aid, remittances
To Core:
debt repayments, migration/ jobs

Question 41

How can globalisation be measured

Answer 41

DHL produces annual reports measuring globalisation based on information, people, capital, trade flows. Considers breadth and depth of flows.

Question 42

Glocalisation in marketing, examples

Answer 42

Kit Kat in Japan, British company- sells 100s of unusual flavours to appeal to Japan’s collectable culture, very successful
McDonald’s in India- McAloo Tiki Burger- patty is potato as no beef or pork on menu

Question 43

Patterns of consumption

Answer 43

HICs consume many more manufactured products
Less demand for goods in LICs- more for fuels and minerals to industrialise

Question 44

Outsourcing definition

Answer 44

The hiring of other companies to do tasks, often in LICs

Question 45

Offshoring definition

Answer 45

Relocating a companies process abroad. To minimise costs.

Question 46

Changes in globalisation

Answer 46

Proportion of goods traded nationally rather than internationally is rising as many countries grow to be self-sufficient like China, consuming more of what they produce. Exported goods dropped from 28% to 22% from 2007-17 globally.