Globalisation Flashcards
What is globalisation?
Globalisation is the process of the Wolrd’s economies, political systems and other cultures becoming more strongly connected to each other.
Why is globalisation important?
There would be no interaction between countries.
What would be the issues of complete globalisation?
The world would act as an entire global community; aspects such as culture and individual customs would be lost as different countries likely integrate and assimilate, or fight to be different. Globalisation in reality is a balance between different countries becoming less individual, whilst still being their own countries and holding their cultures and ideals for the most part.
What forces cause globalisation?
The movement of information, capital, products, services and labour between different countries. People have been moving between countries and international trade has occurred for a long time, however most people beleive globalisation exacerbated this process around the 1980s with mass technological advancements.
What are the five factors that promote globalisation?
Flows of info, capital, products, labour and services.
How do increased flows of info promote globalisation?
Information, such as financial data or news of current events can be spread globally very quickly, facilitated by a majority global access to the internet, where information can be accessed.
- The development and rapid spread of email, the internet and social media mean that large amounts of information can be exchanged rapidly across the globe. This allows people in different countries to communicate and work together, without barriers of location.
Increasing flows of information are making the world more interconnected i.e. people can learn a lot about different countries and cultures without even leaving their own country.
How do increased flows of capital promote globalisation?
Capital is money that is invested - it’s spent on something to produce an income or increased profit from it.
Historically, capital was mostly invested within a country, for example, countries would expand domestic businesses internally. However, the amount of capital invested in foreign countries has increased (FDI). It has increased from $400 billion in 1996 to $1500 billion in 2016 - this could be businesses, institutions or organisations and governments; all of which have invested capital into various countries through FDI.
Improvements in ICT have increased capital flows globally; capital can be instantly transferred globally via the internet making investment easier.
Increasing flows of capital are making the world more interconnected as the majority of countries economies are depended on flows of investment to and from other countries.
How have increased flows of products promoted globalisation?
Historically, manufacturing industry existed in HICs and the produce was sold internally. However recently, manufacturing of goods has occurred less in HICs as people are better educated and can access better paying employment options in different sectors. UK manufacuring jobs fallen by 50% from 1985-2014.
Conversely, less developed countries abroad, with less educated populations who are more demanding for any work mean labour costs are lower overseas; many businesses have thus relocated their production to these countries and import their products to the countries where the product is sold. Many companies based in HICs outsource to LICs/ NEEs where there are large, cheap labour supply’s. (Dyson - Malaysia 2002)
As a result, international trade in manufactured goods is increasing; UK value of imported goods rose by 275% from 1990-2008.
This is making the world more interconnected as it is developing more global trade links through outsourcing and importing.
How are increased flows of services promoting globalisation?
Services are economic activities that are not based around the production of a material good e.g. banking.
Improvements to ICT have allowed services to become global industries in recent decades. Things like banking and insurance can be serviced globally due to ICT improvements, thus service providers can be based anywhere globally and still help customers anywhere in the world.
- During the 1970s and 1980s there was a deregulation and opening up of national financial markets to the globe, making it easier for banks and other financial institutions to do business with more countries.
Services can be divided into low level (customer service) and high level (banking), high level services tend to be based in urban areas in HICs; companies are increasingly relocating low level services to LICs where labour costs are cheaper.
These increased flows are making the world more interconnected as more people can connect to more countries through easy means such as banking; additionally many large banks are international organisations, operating globally.
How are increased flows of labour promoting globalisation?
Flows of labour are the movement of working people from one country to another.
More people are moving overseas and international migration has increased by over 40% between 2000 and 2015.
Some migrants are highly skilled and are moving to HICs with better wages and working conditions as they require more skilled employees.
Additionally, many HICs have allowed increased labour flows to their countries as there may be a shortage of people willing to work less desirable jobs that migrants will do for better pay.
Increasing flows of people have increased globalisation as people are spreading cultures more across the world, and countries are more connected as people may have family all over the world.
How is marketing becoming more global?
Marketing is the process of promoting and selling products or services.
Due to globalisation, products are sold globally means products need to be marketed on global scales. Which usually involves treating the world as a single market and using one marketing strategy to advertise products globally.
How does global marketing give marketing EOS? How can it benefit a business?
It’s cheaper to have one marketing campaign than one for each country.
It can create global brand awareness and consumers over the world can identify a name or logo with a particular product or service, so are more likely to purchase that over competition
- However marketing needs to be adapted to regional markets where there are different cultures and customs.
