Globalisation Flashcards
What is globalisation?
1) Globalisation is the process of the world’s economies, political systems and cultures becoming more strongly connected to each other.
2) If there was no globalisation, there wouldn’t be any interaction between countries. If there was complete globalisation, the world would act like a single community.
3) Globalisation is caused by the movement of information, capital, products, services and labour between different countries.
Flows of information (promote globalisation)
1) Information (such as financial data or news of current events) can be spread across the world very quickly and easily.
2) The development and rapid spread of email, the internet and social media mean that large amounts of information can be exchanged instantly across the globe. This allows people to communicate in different countries.
3) Increasing flows of information are making the world more interconnected e.g. people can learn a lot about different countries and cultures without leaving their own country.
Flows of capital (promote globalisation)
Capital is money invested- it’s spent on something to produce an income or increase it.
1) Historically, the capital was mostly invested within a country e.g. companies would expand by doing things like building new factories or setting up new branches within their county of origin.
2) Over time, the amount of capital invested in foreign countries has increased- this is a foreign direct investment (FDI)
3) improvements in information and communications technology (ICT) have encouraged flows of capital around the world- it can instantly be moved around the world via the internet.
4) Increasing flows of capital are making the world more interconnected e.g. most countries’ economies are now dependent on flows of investment to and from other countries.
Flows of the product (promote globalization)
1) Historically, manufacturing industries were found in more developed countries. However, manufacturing has decreased more in developed countries e.g the number of people employed in manufacturing in the UK fell from more than 5 million in 1985 to 2.6 million in 2014.
2) Lower labor costs overseas have caused many companies to relocate the production side of their business abroad- then import the products to the countries where they’re sold.
3) Aa a result of these changes, international trade in manufactured goods is increasing. e.g. the UK imported 200 billion of manufactured goods in 1990 and 550 billion in 2008.
4) Changing flows of products are making the world more interconnected e.g. many of the manufactured products bought in the UK have been produced in other countries and then imported.
Flows of services ( promote globalization)
Services are economic activities that aren’t based on producing any material goods e.g. banking.
1) Improvements in ICT have allowed services to become global industries in recent decades. Things like banking and insurance depend on communication and the transfer of information.
Improvements in ICT mean that services can locate anywhere in the world and still be able to serve the needs of customers anywhere else in the world.
2) Services can be split into low-level (customer service) and high-level ( financial services). High-level industries are located mostly in cities and more developed countries. Companies are relocating low-level services to less developed countries where labor is cheaper.
3) Increasing flows of services are making the world more interconnected, e.g. people are connected to other countries just through having a bank account- many banks are huge international organisation.
Flows of labour ( promote globalization)
Flows of labour are movements of people who participate in the workforce from one country to another.
1) More people are moving overseas- international migration increased by over 40% between 2000 and 2015.
2) Some migrants are highly skilled workers moving to more developed countries where wages and working conditions are better. Others are unskilled workers who move to more developed countries to look for work because of unemployment or poor wages in their own countries.
3) Increasing flows of people between different countries are making the world more interconnected e.g. people bring aspects of their culture with them, and countries are connected because people have family all over the world.
Marketing is becoming more global.
1) Marketing is the process of promoting and selling products or services.
2) Many products and services are sold all over the world, rather than just in the country where they are produced. This means that marketing has become more global.
3) Global marketing involves treating the world as a single market and using one marketing strategy to advertise one product to all customers around the world.
4) Global marketing gives economies of scale- it is cheaper to have one marketing campaign for the whole world, rather than having a different campaign for every country.
5) Global marketing can create global brand awareness- consumers around the world identify a name or logo with a particular product or service, so they will purchase that product rather than a lesser-known competitor.
