Globalisation Flashcards
Define capital flows
The movement of money for investment, trade, producing goods and providing services
Define globalisation
National economies, societies and cultures becoming increasingly integrated through global trade, transport and immigration
Define international trade
Exchange of capital, goods and services across international borders
Define labour
Factor of production - physical and mental effort used to create goods or provide services
Foreign direct investment
Net transfer of funds to purchase physical capital (e.g. factories and machines)
Name the 4 factors of production
- Land
- Labour
- Capital
- Enterprise
Describe land as a factor of production
All natural resources provided by the earth
Describe labour as a factor of production
Human resource available
Describe capital as a factor of production
Any physical resource which is regarded as a man made aid to production
Describe enterprise as a factor of production
Human capital - establishing businesses and organising the production of goods and provision of services
Define BRIC
Brazil, Russia, India, China - economies have advanced rapidly since the 1990s
Define Mint
Mexico, Indonesia, Nigeria, Turkey - more recently emerging economies
Define diaspora
A large group of people with similar heritage who have moved to places across the world
Define leakages
Loss of income - often resulting from a profit setback
Define repatriation profit
TNC’s investing in overseas production, taking profit made back to the richer countries
Define aid
Financial support for poor countries:
- contributions made by a number of richer countries (UN)
- bilaterally from one government to another
Describe the pattern of flows of labour
People move less easily than capital due to restrictions on immigration.
In recent years there has been a major rise in the number of migrants crossing international borders seeking better employment.
Describe the movement of migrants
From developing countries to richer areas (e.g. South Asia, Africa to North America)
Movement to the oil-rich gulf states where the construction boom has provided many jobs (e.g. Qatar, UAE, Saudi Arabia)
How has the movement of products been facilitated, specifically for developing countries
Reductions in costs of trade:
- Transactions
- Tariffs
- Transport and time costs
How has reducing transaction costs helped flows of products?
Improvements in flows of data and ease with which capital can be transferred
How has reducing transport and time costs helped flows of products?
Containerisation has enabled more long-distance flows of products
Air transport provides speedy transport and reduces waste of perishable goods.
How has reducing transport and time costs helped flows of products?
Containerisation has enabled more long-distance flows of products
Air transport provides speedy transport and reduces waste of perishable goods.
Define containerisation
System of transport which uses large steel containers which can be transferred between ships, trains and lorries.
Cheap and efficient transport.
Define protectionism
Policies imposed by the government placing restrictions on international trade of goods and services, with the intention to protect home-based industries.
Define tariff taxes
Placed on imported goods with the intention of making them more expensive so they do not sell for less than home-based goods.
List the key factors which drive the process of globalisation
- Travel, Trade, TNC’s, Transport
- Communication, Collapse of communism, Containerisation, Capital investment
- Global marketing
How has government support aided globalisation?
Increasing exports from the country
What financial methods have been put in place to aid globalisation?
- Deregulation of financial markets
- Advances in technology has made international trading easier and faster
What transport methods have been implemented to aid globalisation?
- Larger aircrafts, integrated ATC networks
- Use of standardised containers
- High speed rail networks
Describe the JIT approach
Just In Time
System of individual components from different suppliers arriving when they are needed. Cutting the quantity of goods needed to be stored.
What are the negatives of the JIT system?
- If one station in production stops the whole assembly stops
- Suppliers must be constantly supplying
How has technology aided globalisation + give examples?
Making financial information and money easily accessible across the world - deepening connections between countries
- Swift: People can buy and sell things globally without having to meet the buyer
- Somalians in USA: Remittances can be sent home quickly and easily
How has transport aided globalisation + give examples?
Transportation improvements have reduced the cost of production and distribution - process is now cheaper and faster
- Faster and bigger planes
- Containerisation: Universal container size makes transportation easier as less trips are needed to transport the same amount
How has security aided globalisation + give examples?
Global systems in place to limit disagreements and wars
- The UN Security Council: Ivory Coast peace keeping increased social cohesion leading to an 80% reduction in social conflict
- Use of CCTV and security devices
How has communications aided globalisation + give examples?
- Satellites and fibre optic cables have enables the growth of internet and mobile phone systems
How has management and information systems aided globalisation + give examples?
The process of globalisation has been massively accelerated by the way companies managed flows; labour, products, services, information and capital
- Outsourcing (Indian call centres): Hiring other companies to complete tasks that are essential but not necessary for the company to complete themselves
How have trade agreements aided globalisation + give examples?
Make international trading less expensive and easier
- Trade agreements: Restrictions can be removed or lessened to benefit the parties involved. All trade agreements are overlooked by WTO to ensure they are fair
What are the risks of globalisation?
Standardisation of goods and cultures - leads to cultural homogeny
Distinction between countries is diminishing
Risk of interdependence between countries failing
