4.1.3 - Factors Contributing To Globalisation Flashcards
Reasons for Globalisation to increase
a) Reduction of international trade barriers/trade liberalisation b) Political change
c) Reduced cost of transport and communication
d) Increased significance of global (transnational) companies e) Increased investment flows (FDI)
f) Migration (within and between economies) g) Growth of the global labour force
h) Structural change
Reasons for Globalisation to increase
a) Reduction of international trade barriers/trade liberalisation b) Political change
c) Reduced cost of transport and communication
d) Increased significance of global (transnational) companies e) Increased investment flows (FDI)
f) Migration (within and between economies) g) Growth of the global labour force
h) Structural change
What is Globalisation ?
• Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange.
Benefits to Consumers of Reduced Trade Barriers
Help to Lower Price and broaden range of quality goods and services available - This is a result of being able to buy imported goods
Benefits to Businesses of Reduced Trade Barriers
Diversifies Risk and Channels resources to where it’s most needed
Competition, Investment and Increased Productivity
Drawbacks to Companies of Reduced Trade Barriers
Increased competition squeezes profit margins
Employment created as a result of the reduced trade barriers may only be temporary
Can mean increased pollution or over-cultivation
Can cause the developing country that’s being utilised to become over dependent on the developed country
How political change has led to increased globalisation of markets
• Politics used to be only carried out by individual governments who wanted to protect the interests of their country.
• Politics now happens on a global scale with regular meetings between heads of state, summits, where power devolved to governments in trading blocs such as the EU and organisations such as the WTO.
• This has led to less protectionist policies (tariffs quotas etc) and more open trade between nations. The planet is now one market.
Who are the G7 countries
The Group of 7 (G7) is a group consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States.
Globalisation caused by - reduction in costs
• Cost of transporting goods long distances between countries has been reduced by cargo containers
• Can gain a business EOS as they can ship huge quantities at once
• There are also cheaper air flights for business people needing to attend meetings in other countries
