✅3.2.1.1 - Globalisation Flashcards
What is globalisation?
A process by which national economies, societies and cultures have become increasing integrated through the global network of trade, communications, transport and immigration.
What is an economy of scale?
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
What are international flows of capital?
All financial transfer 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.
Can also be a refugee fleeing conflict, granted temporary or permanent residency. Asylum seeker, refugee waiting for residency
Trends/ stats in migration
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.
What is FDI?
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.
What are BRIC countries?
Brazil, Russia, India and China. Rapid economic advances during 1990s
What are MINT countries?
Mexico, Indonesia, Nigeria, Turkey. Recently emerging economies after the year 2000.
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 very poorest in giving nation
- Long term issue as people stop sending remittances after 2/3 generations
- 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 business, such as finance, advertising
What are low level services?
Services to consumers, such as travel, communication
What are the impacts of flows on services?
- 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
What are the impacts of flows of products?
- 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.
What are flows of information?
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.
What are factors in globalisation?
- Communication development
- Transport development
- Financial development
- Information Systems
- Security development
- Trade agreements
- Management systems
2 examples of Management and Information Systems
Economies of Scale
Global Supply chains
What are global supply chains
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.
How technology leads to globalisation
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
How trade agreements lead to globalisation
Makes international trading less expensive- fewer tariffs
NAFTA lowered/ removed tariffs between USA, Canada and Mexico
What are financial factors in globalisation?
Linked to technological developments as well as relaxed trade barriers allowed by governments, the movement of finances around the 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. Can reduce globalisation flows
What is trade and finance liberalisation?
Groups such as the 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 its 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 a secure and reliable end to end supply chain for all goods and services.
How is air freight a factor in globalisation?
Faster, more places reached, fresh goods transported in large quantities, anywhere in the world, cheap, ease of ordering goods
How are cargo ships a factor in globalisation?
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.
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 of 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 number of destinations around the world, encourages travel.
What are trade blocs?
A type of intergovernmental agreement where regional barriers to trade (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 economies, 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 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
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?
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
How many rural migrants are there in China’s major cities?
150-200 million
Economic flows in core-periphery model
To Periphery:
loans, aid, remittances
To Core:
debt repayments, migration/ jobs
How can globalisation be measured
DHL produces annual reports measuring globalisation based on information, people, capital, trade flows. Considers breadth and depth of flows.
Glocalisation in marketing, examples
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
Patterns of consumption
HICs consume many more manufactured products
Less demand for goods in LICs- more for fuels and minerals to industrialise
Outsourcing definition
The hiring of other companies to do tasks, often in LICs
Offshoring definition
Relocating a companies process abroad. To minimise costs.
Changes in globalisation
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.
