Global Systems and Global Governance Flashcards
Define global village
A flat world where economic and information can flow freely. Proposed in late 1960s by Michael McLuhan. Gradually reflected by more nations over time.
Define global economy
Encompasses local and national economy which interlink a number of factors such as emergence and shift in markets, technology improvements.D
Define globalisation
Process by which national economies, societies, and cultures become integrated through global network of trade communications, transport, immigration.
What are the 4 sectors of economic activity?
Primary, secondary, tertiary, quaternary
What is the primary sector of economic activity?
Agriculture, mining, fishing. If resources decline, typically more rural.
What is the secondary sector of economic activity?
Construction worker, factory workers, machinist. Typically older industrial cities such as Sheffield and Manchester declining over time.
What is the tertiary sector of economic activity?
Insurance, education, providing services. Urban area concentrated. Salaries can vary significantly.
What is the quaternary sector of economic activity?
Research and development, computing. Focuses in high built up areas.
What are the advantages of globalisation?
Global consciousness causing environment problems to be addressed more.
Capitalisation leading to economic growth in NEEs.
TNCs generate new jobs.
Global technologies reigniting forgotten cultures.
Global cooperation to help address problems structurally.
What are the disadvantages of globalisation?
Competition leading to decline in resources.
LDCs often poorer, making escape from the poverty trap difficult.
Job security threatened as branches close.
Traditional cultures being lost, others accelerating e.g. Americanism.
Risk of diseases e.g. covid-19
What are some examples of significant impacts on globalisation
Telegrams/emergence of TNCs in 19th century
British empire in 19th century
Airplanes, global tourism, wireless communications 1920s.
Capitalism/communism 1940s-1990s
The internet 1989 and the metaverse 2020-present
Mainstream Artificial Intelligence 2023
What is the global shift and when did it happen?
1960s-1980s
NICs/LEDCs and RICs began to develop.
Communication Revolution during Phase 2 of globalisation.
Why did the global shift occur?
Outsourcing, cheaper labour overseas.
Cost of importing declined quickly.
Main drives from Asia and RICs followed by LEDCs in the early 2000s.
What is a core nation?
Typically a HIC, often distributes loans to the IMF and World Bank in return for labour and goods.
What is a periphery nation?
Typically an LIC, will often receive loans and tied aid, in return for labour. Often has to pay interest on loans.
What new type of nation has emerged in the global economy recently?
Semi-periphery nations - those that have some properties of both core and periphery nations e.g. China.
What are the seven dimensions of globalisation?
Flow of capital
Flows of labour
Flows of products
Flows of services
Flows of information
Global marketing
Patterns of production/distribution and consumption.
What is a flow of capital?
Money that moves between countries for investment, land, trade, usually by institutions that work over borders.
How have the flows of capital changed recently?
$5 trillion circulates daily as of 2013.
People and businesses selling shares.
Remittance payments from flows of labour.
How have flows of capital impacted HDEs and LDEs differently
Most models assume HICs have concentrated power and LDEs have been exploited of their resources and suffer from out-migration (‘brain drain’).
What are the four different types of capital?
Foreign Direct Investment (FDI)
Repatriation of Profits.
Aid / Official Development Assistance (ODA).
Remittance Payments.
What is Foreign Direct Investment (FDI)?
Investment mainly by TNCs, often based in one country.
Tied / Bilateral Aid.
Risen from $400 billion in 1996 to $1500 billion in 2016.
What is the repatriation of profits?
TNCs investing in overseas production.
Investment usually ends up in the core nation, majority of flows go into the origin country for the TNC.
What is aid and the Official Development Assistance (ODA)?
Financial support for LDEs.
Multilateral Aid - From World Bank or International Organisations.
Bilateral Aid - Cooperation between two countries for funding.
What are Remittance Payments?
Money that comes from migrant workers that goes back to the original country.
Accounts for $79 billion in flows in 2018.
What are flows of labour?
Movement of people, mostly from immigration.
Restrictions on immigration across international borders.
More people migrating from Asia to Europe / North America over the last 25 years.
Why do some people choose to migrate and what is the main consequence?
Conflict, unemployment, corruption.
‘Brain Drain’ - Loss of skilled workers in Periphery nations
What are the flows of products/goods?
Movement of manufactured goods from one place to another. Typically occur because of low production costs combined with high demand.
Define containerisation
The system of transport expected for these flows.
Often use large universal steel containers for cheaper, efficient transport.
Define protectionism
Policies made by government to restrict trade on goods to protect their own industries.
Reduces flows of goods globally and prevents international competition.
What are flows of service?
Two different types of service:
High level - Business, finance, usually concentrated in HDE cities.
Some NEEs are also financial hubs.
Low level - Consumer services, bankers, travel, tourism.
Decentralisation from HDEs to LDEs (call centres moving to India etc).
What are conglomerates?
Companies that report to one major company. Most TNCs work like this. Creates more connected service, increasing flow.
What are flows of information?
Movement / flow of people and the speed of data link / communications.
Give examples of technology that has improved flows of information
Global telephone networks
Mobile technology
Emails and the internet
Live media coverage (news, livestreaming)
Define global marketing
Process of promoting / advertising and selling products.
What is a brand identity?
Unique marketing strategy employed by TNCs that sets it apart from others and makes it recognisable. Often a slogan (just do it - Nike).
This can promote clone towns because the same products are on every high street.
What is glocalisation?
Some brands will tailor products to specific populations for religious or cultural reasons.
E.g. McDonalds not selling beef burgers in certain countries.
What is the international division of labour?
Highly skilled labour often found in HDEs and unskilled labour usually found in LDEs.
One exception to this are NICs - Newly Industrialised Countries, that have TNCs and their own global influence while not being a HDE.
What are the patterns of production globally?
Manufacturing is decentralised from HDEs to LDEs over the last forty years. Because of:
Lower land costs
Deindustrialisation of HDEs
What are patterns of consumption globally?
Main demand still in HDEs. NICs are increasing demand to other areas of the world as they consume more affluent goods. Forecasts show a shift in demand from West to East as Asian countries develop.
What are the six key factors in globalisation?
Communication systems
Financial systems
Transport systems
Security systems
Management systems
Information systems
Trade agreements
How have communication systems contributed to globalisation?
Almost no barriers to data sharing.
Developments to communications have accelerated with the Internet in 1989 and mobile phones, especially in LDEs.
Potential for AI to contribute further after it went mainstream in 2023.
How have financial systems contributed to globalisation?
Increasing financial integrations.
Loss of deregulation to move money across borders.
However, deregulation can make markets volatile and vulnerable (2008 crash).
Give ways that transport systems have contributed to global systems
More efficient transport
Larger aircraft
Low cost/budget airlines
Universal containers (containerisation)
Distribution efficiency
High speed rail
Suez Canal (10% of global annual trade)
How have security systems contributed to globailsation?
National borders being relaxed, imposing risks.
International terrorism, requires anti-terrorist groups and monitoring.
Safety standards for food imports.
Biosecurity for new diseases.
Data breaches and cybercrime
Give some examples of management and information systems
Global integrated companies investing.
Large production plants.
Global marketing and distribution.
Increased quaternary sector.
What are trade agreements?
Formal agreement by two or more countries to remove barriers.
Not always formal agreements but there is interest in cooperation.
Give the names of four trade blocs and their scale
US Mexico Canada Agreement (Major).
Pacific Alliance (Major)
Organisation of Petroleum Exporting Countries (OPEC)
MERCOSUR (Major)
European Free Trade Association (STG Developed)
Caribbean Community (STG Developing)
South African Development Community (STG Developing)
South Asian Free Trade Area (STG Developing)
European Union (Major)
Association of South East Asia Nations (Major)
Group 77 + China
What are the four stages of trade agreements?
Free Trade Areas
Custom Unions
Common Market
Economic Union
What is free trade area?
An area where trade barriers between members are eliminated and tariffs are kept against external nations.
What is a common market?
Same as customs union, but also the agreement for free flow of goods, services and labour e.g. MERCOSUR
What is an economic union?
Same as common market but there is a common currency and taxes, as well as a set of economic policies. Sometimes there are laws and other policies as well, e.g. EU has euros
What are three advantages of being in an economic union?
Fair exchange rates and common currency simplifying transactions.
Faster transfers for technology.
International status and competition.
Pooling of resources for extreme events.
What are three disadvantages of being in an economic union?
Some countries become dependant on others.
Exploitation of resources (UK fishing waters for example).
Competition for jobs.
Pressure to adopt legislation.
Centralised decisions.
What are the social interactions to interdependence?
Health: World Health Organisation.
Education
Culture
How does health impact on social interdependence?
International institutions took charge of COVID pandemic. Countries providing aid to those who couldn’t afford the costs.
More confidence internationally form governments and improved relations. But periphery nations still missed out.
How does education impact on social interdependence?
Foreign exchange programs have increased, more students travelling to universities overseas.
Beneficial for involved universities and improved political relations, but does not benefit everyone at a global scale.
How does culture impact on social interdependence?
Social ties have been strengthened. For instance, a large Indian population has settled in the UK.
Political relations have improved and new culture improve mutual respect and tolerance, but there is often a loss of cultures long-term (americanism).
What are the economic interactions to interdependence?
Trade
Technology
Employment
Labour flows
TNCs and investment
Supply chains
Industrialisation
How does trade impact on economic interdependence?
Nations take part in international trade, with reliance on other countries to supply demands.
Countries can distribute goods and receive profits, but this has led to exploitation of LICs and lack of growth in these countries.
How does technology impact on economic interdependence?
Competition and cooperation improves, increasing quality of products and services.
Technology is also affordable but the gap is growing between HDEs and LDEs because of lack of funding.
How does employment impact on economic interdependence?
Jobs are being generated in new places, relocating workers.
NICs are able to get more secondary infrastructure, but there are job losses in MEDCs and HDEs in the secondary industry.