causes of globalisation and why it has increased in recent decades

Question 1

what does globalisation mean?

Answer 1

the process by which national and regional economies, societies and cultures have become integrated through the global network of trade, communication, immigration and transportation.

Question 2

what is interdependence

Answer 2

• the success of one place depending on the success of other places.
• countries which rely on each other to trade goods and services

Question 3

what are flows and what are some examples?

Answer 3

flows are a pattern of movement

• goods: products and commodities
• capital: money (between banks, people, businesses and government)
• information: data transferred between business and people (often involving the internet)
• People: the flow of migrants and tourists from one part of the world to another

Question 4

what are some forms of globalisation?

Answer 4

Economic globalisation: involves the growth of global TNC’s.
Cultural globalisation: involves people increasingly doing similar things globally (food, style, music, values)
Political globalisation: dominance of western democracies in political and economic decision making
Demographic globalisation: occurs as migration and tourism increases: populations become more fluid and mixed
environmental globalisation: the realisation that global environmental threats require global solutions.

Question 5

How have the key factors ‘Transport and trade developments’ helped to drive and accelerate globalisation.

Answer 5

They’ve encouraged growth in trade, as transporting goods and people around the world has become cheaper over time

Question 6

what does trade mean?

Answer 6

the exchange of goods and services between people and companies (usually across borders)

Question 7

what is meant by a shrinking world?

Answer 7

the idea that the world is so interconnected, that we feel closer in terms of travel time.

Question 8

what is arguably the most important development in transportation?

Answer 8

shipping containers.

efficient and cheap ways of transporting consumer goods across the world.

Question 9

how has communication revolutionised?

Answer 9

• the late 20th century and early 21st century have been dominated by developments in ICT (ie information and communication technologies- landline telephones and electric telegraph)
  
  • mobile phones (mid-1990’s)
  • interent access (mid 1990’s)- now 50% of population have interent access

Question 10

what is time-space compression

Answer 10

the idea that the cost, in terms of time or money, of communication over distance has fallen rapidly.

Question 11

what technology carries internet data across oceans?

Answer 11

subsea fibre optic cables

Question 12

why is revolutionised mobile and internet communication important for businesses?

Answer 12

• keep in touch with all parts of their production
• transfer money and investments instantly
• instantly analyse data on sales, employees, or orders

Question 13

what is a consequence of internet use in business mainly?

Answer 13

many interactions that were once ‘face to face’ or ‘voice to voice’ are now done without person to person interaction (i.e banking or shopping- moved online) putting skilled people out of jobs.

Question 14

how has the pattern of global flows of exports and goods influenced globalisation

Answer 14

• increased trade (in late 70’s and mid 90’s)
• a huge growth in export trade after 2002
• a sharp dip in 2008-09 (global financial crisis
• return to normal export levels by 2011 but slow growth since.

Question 15

In the past, how have countries protected their own industries and businesses?

Answer 15

• demanding payments of taxes and tariffs on imported goods, so making them more expensive than home-produced products
• setting quotas to limit the volume of imports, protecting home producers from foreign competition
• banning foreign firms operating services like banking
• restricting or banning foreign companies (FDI’s or TNC’s) from investing in their country

Question 16

what is ‘free trade’?

Answer 16

Trade that’s free of taxes, tariffs and quotas)

Question 17

what are FDI’s

Answer 17

Foreign Direct Investments

when a business from one country invests in another such as opening a chain of shops or building factories.

Question 18

what are the three main global organisations?

Answer 18

World trade organisation
international monetary funds
world bank

Question 19

what does the world trade organisation do?

Answer 19

it is an international organisation that works to reduce trade barriers and create free trade. A series of global agreements have gradually reduced trade barriers and increased free trade.

Question 20

what does the international monetary fund do?

Answer 20

since 1945, the IMF has worked to promote global economic and financial stability, and encouraging more open economies. part of this means encouraging developing countries to accept FDI and open up their economies to free trade. The IMF has been criticised for promoting a ‘western’ model of economic development that works in the interest of developed countries and their TNC’S.

Question 21

What does the World Bank do?

Answer 21

the WB’s role since 1944 has been to lend money to the developing world to fund economic development and reduce poverty. It has helped developing countries develop deeper ties to the global economy but has been criticised for having policies that out economic development before social development.

Question 22

what are some ways governments can promote globalisation?

Answer 22

• joining free trade blocs such as the EU; allow free movement of people between countries
• open up market competition; moves towards free market liberations.
• privatisation; sold of industries (nationalised them)
• grants and loans made to new businesses.

Question 23

what are free trade blocs?

Answer 23

an agreement between a group of countries to remove all barriers to trade e.g import/export taxes, tariffs and quotas

Question 24

what is free market liberation?

Answer 24

refers to the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities

Question 25

what are special economic zones?

Answer 25

A special economic zone is an area in which business and trade laws are different from the rest of the country so aim to attract foreign investment.

Question 26

how to special economic zones attract FDI?

Answer 26

• they’re tariff and quota free, manufactured goods can be exported no cost
• unions are usually banned so workers cannot strike or complain
• infrastructure is provided by government, so allow a subsidy for investors thus lowering their cost.
• environmental regulations are usually limited.

Question 27

where’s an example of special economic zones contributing hugely?

Answer 27

CHINA over the last 30 years

western consumers benefit from low-cost goods, however questions are raised on pay and working conditions.

Question 28

what does the KOF index measure?

Answer 28

the degree of globalisation of countries on an annual basis. 
measures 3 aspects of globalisation
Economic- trade and money flows
social- calls, tourist flows, media
political- embassies, number of IO's.

Question 29

what does the AT Kearney index measure?

Answer 29

how economically successful a city is.

Question 30

what are TNC’s?

Answer 30

trans-national corporations

companies that operate in more that one country

Question 31

what are two of some the largest TNC’s?

Answer 31

Toyota

was-mart stores

Question 32

how have TNC’s contributed to globalisation?

Answer 32

out-sourcing some parts of their business
offshoring some of their business
developing new markets (factories in Asia etc.)
glocalisation- adapting brands and products to suit local market tastes.

Question 33

what are the downsides of TNC’s?

Answer 33

• accuses of exploiting workers by paying low wages
• local cultures and traditions can be eroded by westernised ideas brought by TNC’s.
• outsourcing jobs may lead to job loss in the developed world

Question 34

what is the difference between offshoring and outsourcing?

Answer 34

outsourcing refers to an agreement in which one company hires another company to be responsible for an existing internal activity.
offshoring is the practice of basing some of a companies service or processes overseas, so as to take advantage of lower costs

Question 35

why are some places switched off from globalisation?

Answer 35

political isolation- North Korea (limited access to media etc.)
economic isolation- rural Africa like Sahel are poorer so connections are limited
physical isolation- Himalayas isolated from outside contact (tourism is changing this)
environmental barriers- harsh climates like deserts and rainforests means limited transport and connection to outside influence.