Global Systems 1 Flashcards
Globalisation
The process by which the world becomes more interconnected on an economic, social and political scale
Concept of globalisation
- world has always been interconnected
- concept only developed in 1960s
Forms of globalisation
- Economic
- Social
- Political
KOF globalisation index
Measures the economic, social and political dimensions of globalisation
Most globalised nations
- Switzerland
- Netherlands
- Belgium
Worlds major economies on globalisation index
Major economies (US, China, Germany) tend to be more inward looking and less globalised
Factors that affect how globalised a country is 4
- Ease of trade
- Foreign investment
- Presence of TNC’s
- Stability
5 major areas of globalisation
- Economic
- Social
- Political
- Flows of capital
- Flows of labour
Economic globalisation is made up of what
- Actual economic relations and flows
- Restrictions to trade and capital
Social globalisation is made up of… (3)
- Personal connections across the world
- Information flows
- Cultural proximity (International influence)
Distance decay
Process by which actual geographic distance symbolic feels smaller
Largest migrant flow
- Mexico to US
- 2 million annually
Information flows
- Quantitative data on how well a country is connected
- based on internet infrastructure, TV viewership and other tech
Political globalisation is made up of… (2)
- Membership of international organisations
- Diplomatic relations
Flows of capital is made up of…
- International transactions between countries
- Previously restricted domestically
Global FDI difference
- $400 billion (1990)
- $1500 billion
What drives further capital movement?
- Improvements in access to technology
- Interconnected nature of world
Value of global financial flows
$5.1 trillion
Trends of capital flows 3
- US highly involved in capital flows
- NA and Europe largest
- Growing significance in Asia
Flows of labour is made up of…
- Labour increasingly moving internationally
- Generally poor to richer
Number of International workers
170 million
HIC facts in comparison to the world
- Purchasing power = 50%
- Population = 14.7%
- Exports = 61%
Factors promoting globalisation 5 (PLSCI Please Slowly Look In Cod)
- Flows of PRODUCT
- Flows of SERVICES
- Flows of LABOUR
- Flows of INFORMATION
- Flows of CAPITAL
Flows of information
- Can be spread faster than ever
- Makes the world more interconnected
What is Foreign Direct Investment (FDI)
Investment made by a foreign company in the economy of another country
Largest receivers of FDI
- Germany, US and UK accounted for 27%
- India and China 7%
Flows of product 4
- Changing balance of economies based on global demand
- LIC = Raw material
- MIC = Manufacturing
- HIC = Services
Drivers of outsourcing and product flows 3
- Cost savings
- Service quality
- Strategic position
UK value of imports change
- £200 billion 1990
- £682 billion 2021
UK economy sectors change
- 60% tertiary 1900
- 81% tertiary, 1% primary 2000
Flows of services 3
- Financial or insurance services
- Low level services outsourced (Callcenters)
- High level services (Financial)
What is a growing trend in outsourcing?
- High level services are also being outsourced to where it is cheaper
- KPMG outsourcing accountancy
What does the flow of services rely upon?
Depends on the flow of information and capital
Flows of labour
Movement of people from one country to another to work
How much has international migration increased since 2000?
40% in 15 years
Containerisation
System of standardised transport enabling goods to be transferred anywhere in the world