Globalisation Flashcards
Globalisation
the process of the world’s economies, political systems and cultures becoming more strongly connected to each other.
3 main forms of globalisation
Economic
Social
Politicalm
Economic globalisation
Largely caused by growth of TNCs and by growth in international trade
Social globalisation
Impact of Western culture, art, media, sport and leisure pursuits in the world
Political globalisation
Growth of Western democracies and their influence on poor countries and the decline of
centralised economies
KOF index of globalisation
was introduced in 2002 and covers the economic, social and political
forms of globalisation
Scores each country
Most globalised - Canada, Australia, New Zealand
Not as globalised - china, USA, Russia
Least globalised - Afghanistan, Nepal, Myanmar.
Global systems
refers to any organisations, groupings or activities that link different parts of the world. TNCs, for example, operate in 2 or more countries, therefore linking their economies.
Dimensions of globalisation
Flows - capital, labour, services, information, products
Global marketing
Patterns of production and consumption
Flows of information
Information, such as financial data or news of current events can be spread across the world very quickly and easily.
email, internet and social media mean large amounts of information can be exchanged instantly across the globe.
Flows of capital
Global FDI increased from about $400 billion in 1996 to nearly $1500 billion in 2016.
Improvements in information and communications technology (ICT) have encouraged flows of capital round the world
most countries’ economies are now dependent of flows of investment to and from other countries.
Movement of Flows of products
a movement of high value manufactures from the more developed countries to the less developed countries, and of low value manufactures from the less developed countries to the more developed
Flows of services
Improvements to 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
High level services tend to be concentrated in cities in more developed countries (e.g. in London and New York and vise versa
Flows of labour
international migration increased by over 40% between 2000 and 2015.
Global marketing
Global marketing involves treating the world as one single market and using one marketing strategy to advertise a product to customers all over the world.
Patterns of production, distribution and consumption
TNCs dictate where products are made – generally where labour costs are lower in LICs.
Products are distributed around the world to meet the demands of consumers in HICs.
Systems
include ways of working, procedures and methods of organisation that allow a particular function to be carried out
Opportunities of advanced tech
the Internet allows people from all over the world to access information, aeroplanes allow people and goods to be transported across the world swiftly and efficiently.
Role of investment banks
is to help companies raise capital by selling shares on behalf of those companies
Example of financial deregulation
barriers to capital coming in and out of a country were removed, so it became easier for
investment banks to buy and sell shares and other products across the world.
Controls
make it more expensive for companies to sell their products abroad, as well as for consumers to buy them.
Trade agreements
To make trade cheaper, countries can enter into a trade agreement. These are formed by countries joining together to form a trade bloc that encourages trade between themselves and promotes
What makes up a trade system
Multilateral and bilateral agreements
Who governs the global trade system
the WTO (World Trade Organisation)
Improved transportation
high sped rail network, larger and faster ships and faster planes have allowed people and products to get to places around the world more easily than ever before.
Containerisation
Improved communication systems
people / companies in rural or remote areas can access the Internet and communicate with others.
Globalised company supply chains
a company’s supplier, factory, research and development department may all be in different countries. This allows companies to minimise costs.
Economies of scale
Large companies can reduce the average cost per item by purchasing specialised equipment and using production lines.
Safety
Trade reduces chances of conflict between countries
