Globalisation Flashcards
Definition of globalisation
The ever increasing integration of the worlds local, regional and national economies into one market
What does it create between countries
Interdependence
Developing countries
Can gain from cheap labour costs - outsourcing where MNC’s will produce their goods in developing countries - builds relationships - help each other grow - however leakages can occur when profits return to hq overseas - may lead to over dependence - MNCS can pull out at anytime
WTO
Advocates feee trade - contributed to decline of trade barriers
MNCs
Organisations which control or own the production of goods and services in multiple countries - economies of scale - worldwide attention - lower cost of production - can influence countries - Amazon in Ireland
Communication and IT
Spread of IT - easier and cheaper to communicate - time space shrinkage - interconnected - however loss of culture
Containerisation
Resulted in cheaper shipping of goods across globe - causes price to fall - more competition - cargo moved 20X faster than before - greater EOS - mostly MNCs
Negatives of globalisation on individual countries (3)
Loss of culture - fast food in Great Wall of china
Multiplier from globalisation often specific areas - port areas etc
Trade imbalances*
Negative effects on governments
Some gov may lose sovereignty due to increase in international treaties - individual states find hard to resist - once member have to obey rules - if not will lose out on benefits
Positive effects of producers (3)
Can gain from specialisation and EOS
Competition increases - incentive to lower cost of production - more efficient
Producers can switch production to lower cost areas
Positive on consumers (2)
Increase world GDP - increase living standards - reduce poverty
Consumers take advantage of wider range of goods available
Evaluation of effects on consumers (3)
Hard to calculate proportion of global gdp from globalisation
Consumer income rises may offset cost of production - increase prices due to increase demand - increase price of raw materials
Spatial variation - lots of underdeveloped countries don’t benefit - more to AC - top 1% of world own more than the rest
Positives on workers (2)
Workers can take advantage of job opportunities around globe - less geo immobility
Multiplier in developing - creates jobs - reduce poverty
Evaluation of impacts on workers (2)
MNCs - exploit workers - sweatshops - suicides in apple factories - nets around
Global competition can cause structural unemployment - car industry Birmingham 1950 - Japan gained market share - cheaper production costs - unemployment
Benefits to environment
Increased knowledge of damage of pollution - due to increased tech and communication globally - increased gdp - greater living standards - consumption of normal goods
