Factors promoting globalisaiton Flashcards
What are the 5 factors promoting globalisation?
FLows of Information Flows of Capital Flows of Products Flows of Services Flows of Labour
FLOWS OF INVESTMENT: What does the rapid spread of email and social media allow?
Large amounts of data to be exchanged worldwide quicker and easier.
People living in different countries can communicate.
FLOWS OF INVESTMENT: What does the increase in flows of investment allow the world to become?
Interconnected (e.g. people can learn a lot about a different country and its culture without leaving their own country).
FLOWS OF CAPITAL: What is capital?
Capital is the money being invested - its spend on something to produce an income or increased profit from it.
FLOWS OF CAPITAL: In the past, what had capital been spend on?
Historically, capital was spent on mostly investing within a country (e.g. companies would expand by doing things like building new factories and setting up new branches within their country/origin.
FLOWS OF CAPITAL: Over time, how has the amount of money being spent on foreign countries changed?
It has increased - this is called foreign direct investment (FDI) e.g. global FDI increased from about $400 billion in 1996 to $1500 billion in 2016.
FLOWS OF CAPITAL: How have the improvements of information and communications technology helped promote globalisation?
Improvements in ICT have encouraged flows of capital around the world - it can be instantly moved around the world via the internet.
FLOWS OF CAPITAL: What are the flows of capital doing to the world?
Making the world more interconnected e.g. most countries’ economies are now dependent on flows of investment to and from other countries.
FLOWS OF PRODUCTS: In the past, where was manufacturing industries mainly found to take place? Where were the products usually sold?
In developed countries
The products being produced were also sold in the country where they were made.
FLOWS OF PRODUCTS: How had manufacturing changed in the more recent years?
In recent decades, manufacturing has decreased in more developed countries e.g. the number of people employed in manufacturing in the UK fell from more than 5 million in 1985 to around 2.6 million in 2014.
FLOWS OF PRODUCTS: How have lower labour costs caused problems?
Caused many countries to relocate the production side of their business abroad - they then import the products to the country where they are sold. E.g. vacuum manufacturer Dyson moved their production side of its business to Malaysia in 2002, but the vacuums are still sold in the UK.
FLOWS OF PRODUCTS: As a result in all the changes, how has international trade in manufactured goods changed?
International trade in manufactured goods is increasing, e.g. the UK imported £200 billion of manufactured goods in 1990, and £550 billion in 2008.
FLOWS OF SERVICES: What are services?
Services are economic activities that aren’t based around producing any material goods, e.g. banking.
FLOWS OF SERVICES: What effect did the improvement of ICT allow?
Improvements in ICT have allowed services to become global industries in recent decades. Things like banking and insurance depend on communication and transfer of information. Improvements in ICT mean that all services can locate anywhere in the world and are still able to communicate.
FLOWS OF SERVICES: What happened in 1970s and 1980s that allowed banks and other financial institutions to do businesses in other countries?
Deregulation and other opening up of national financial markets to the rest of the world e.g. UK & USA.
