eqi2 & 3 Flashcards
what is outsourcing?
the movement of administrative and office work to an overseas country which was formerly done at home to take advantage of lower costs
why do companies outsource?
- shares the risk
- maximise profit
- huge workforce
- pressure off system
- better quality
why did England outsource to india?
- commonwealth links
- english is spoken and well taught
- IT is taught in schools
- low wages
- specialist companies are starting to appear
- 3.5 million uni graduates per year `
how does the UK benefit from outsourcing to India?
- labour costs in call centres in the UK range from £18 -£20,000 and in India they are 2,500
- companies claim they operate more efficiently
- outsourcing reduces costs which leads to greater profits
- up to 40% cost saving
how does India benefit from being outsourced to?
- provides 3-4 million jobs
- gender inequality is reduced
- more jobs made in LEDCs than lost in MEDCs
- younger people have high incomes to support the aged
- outsourced jobs have above average salaries
how does UK lose out because of outsourcing to India?
- may contribute to negative multiplier effect
- most jobs are lost from areas which have already been de-industrialised
- 200,000 jobs lost
- mainly women who lose their jobs
- some skilled jobs are leave the NICs as well - job insecurity
how will India lose out because of being outsourced to?
- abuse from customers may create anti-western feelings
- job titles makes workers feel smaller
- the economy may become reliant on unskilled work
- learning english accents may lead to westernisation
- exploitation of child labour
what is a switched on country?
nations, regions or cities that are strongly connected to other places through the production and consumption of goods, services and culture
what is switched off?
countries which are poorly connected
what are physical reasons why a country switched off?
- cold/icy or difficult to access
- inhabitable
- poor
- warzone
- underpopulated
- desert
- vulnerability to climate change
- lack of natural resources
what are human reasons why a country is switched off?
- resources controlled by socially elite
- lack of education deters investors
- ethnic and religious tensions
- political isolation
- civil war
- poor agricultural resources
what is the KOF index?
created by Swiss economic institute and it measures:
- economic
- social
- political globalisation
how does KOF meaure economic globalisation?
cross border transactions and the volume of FDI
how does KOF measure social globalisation?
cross border contacts and information flows (e.g. social media)
presence of ikeas and mcdonalds
how does KOF measure political globalisation?
number of foreign embasises in the country
countries membership of different international organisations
what are issues with the KOF index?
- it does not deal with domestic variation in globalisation
- some of its 24 variables are outdated such as newspaper sales per capita
- it fails to take into account the black market e.g. drugs
- fewer missing or estimated data is increasing accuracy and commparability
- domestic markets are ignored
what is the AT Kearney index?
the AT Kearney indices are created by the carnegie endowment for international peace think tank and it uses indicators spread across 4 categories:
- economic intergration
- technological connectivity
- political engagement
- personal contact
what are problems with AT Kearney index?
- only includes 62 countries though these include 84% of the world’s pop and 96% of global GDP
- small european countries dominate the top 20 as they have more FDI indicators
what is global shift?
the global shift refers to the major shift in the locatio of manufacturing industries as a result of globalisation
why did global shift occur?
FDI flows as a result of TNC movement into these nations:
- better transport
- better communication
- better ICT
- increased access to markets
- improved cultural awareness
what are the positive local impacts of globalisation?
- different cultures mix bringing new ideas
- greater variation of shops and restaurants on the high street to cater for different cultures
what are the negative local effects of globalisation?
- big supermarkets put community services such as milk deliveries out of service - impacts the elderly
- high streets become clone towns as the same chain shops open in every town
- local farmers can’t compete with cheap food imports
what are the positive national impacts of globalisation?
- open door policies such as China’s and UK’s attract FDI that brings money and jobs to countries
- immigrants increase the economically active age group and reduce dependency ratios
what are the negative national impacts of globalisation?
- 70% of deforestation in the Amazon is to clear forest for cattle ranching to supply the world’s increasing demand for cheap supply
- loss of sovereinty