Globalisation Flashcards
What is globalisation
The variety of ways in which a place becomes more interconnected socially, globally, politically and culturally to the wold it.
What is economic globalisation?
The growth of transnational corporations accelerates cross border exchanges of goods and materials as well as finished goods. The digital economy has acted to catalyse economic flows of both capital and commodities.
What is social globalisation?
International immigration has created extensive social networks that cross national borders. Global improvements in education and health can be seen over time with increasing life expectancy and literacy levels. Remittances.
Political globalisation
The growth of trading blocks like NAFTA and the EU and BRIC’s allows for TNC expansion, merging and acquisitions. Other political financial organisations like the world bank and IMF and WTO encourages political engagement.
Cultural globalisation
There has been an emergence of a global culture after mass migration with some cultural traits being preserved and some being adopted globally like technology ie I Phones.
Global capital flows
At a global scale major capital flows are routed daily though the worlds stock market. A range of businesses also move capital regularity. In 2019 global flows reached 6.6 trillion per day.
Commodity flows
Valuable raw materials such as oil and coal have always travelled between nations however recently these have increased..
Tourist flows
Many of the worlds air passengers are holiday makers using Budget airlines. In recent times developing countries have also began utilising airlines.
Information flows
The internet has catalysed the flow of information,
Migration
The permanent flow of people is one the most opposed flows with governments having a divided approach.
Development of railways
In the 1800’s railway networks expanded globally. By 1904 there was 9000 km of railways. Railway links connected Moscow with Japan. Today railway construction remains a priority for the government with China constructing over 35,000 km of rail since 2000.
Development of telegraph communications
This was the first major electronic method of communication and it allowed for central office to devolve from manufacturing and for easier communication between elements of an organisation. Instead of orders or information taking days to travel from America to Europe communications could be made faster. This encouraged the expansion of corporations across the Atlantic because of how communication became more continent.
The development in steamships contributing to the sinking world affect.
Britain became the leading power in the 1800s using steam technology to move goods and armies quickly along trade routes into Asia and Africa. This allowed for the global flow of goods to be more efficient and faster. This encouraged further globalisation by connecting more places which contributed to the shrinking world affect.
This paved the way for cheaper goods to be shipped from abroad and stimulated docklands in Liverpool and London.
Aviation
The invention of aviation was quickly developed and by 1995 easyJet began to run short flights. By 2020 the company brought in £6.4 billion pounds.
Aviation also encouraged shipping by flights.
This grew globalisation because people could now travel further and faster for less money which resulted in the shrinking world affect.
Containerisation as a factor causing the shrinking world affect
Containerisation was the process by which instead of different sized boxed being loaded miscellaneously onto a barge which then required a substantial amount of effort to sort at the docks- a slow and inefficient process. By loading products into a set sized unit, which can be loaded and unloaded in an organised manner with a set sized crane the process of shipping became cheaper, more efficient, and faster.
This led to the shrinking world effect because goods could move further and faster.
Mobile phones as a development in global communication
The first telegraph and telephone across the Atlantic in the 1860’s replaced a three weeklong journey for mail. This revolutionised how business was conducted. In parts of Africa where these lines have never been laid some countries are ‘leap frogging’ this technology and are going straight onto mobile phones.
The Internet and social networking as a factor causing the time space compression.
The internet and social networks are started as part of a scheme funded by the us department of defence after the second world war and they laid the key infrastructure. This was a way of linking important research computers in different locations. Since then connectivity
Time space compression
This is the perception that the size of the earth reduces as flows take less time.
Bretton woods organisations
These organisations were established after the second world war as a means of boosting the world economy.
World Bank
The world bank lends money on a global trade. With headquarters in Washington. An example includes a $470 million loan to the Philippines for the reduction of poverty. Loans are also given directly to countries. Distributed 64bn in loans in 2018 however strict conditions are imposed. All presidents have been USA citizens.
IMF (International monetary fund)
The imf channels loans from wealthy countries to poorer ones. In return recipients must agree to run free market economies that are open to FDI. This allows TNC’s to easily invest in the emerging economy. USA exerts significant pressure over this organisation despite the fact there has only ever been a European President.IMF rules are strict and controversial, especially the strict financial conditions imposed on borrowing governments. This can lead to the IMF forcing governments to cut funds to health, education, sanitation, and housing programs.
WTO (World trade organisation)
Based in Switzerland the WTO advocates for trade liberalism especially for manufactured goods. It asks counties to abandon protectionist attitudes in favour of untaxed trade. The two has failed to stop the UK and the USA from subsidising its own farming industries. This is harmful to farmers in developing countries as they cannot trade on a level playing field.
Free market liberalism
The process by which the government does not involve itself in trade and leaves markets to determine supply and demand. This is a right wing economic policy.
Definition and explanation of trade blocks.
Voluntary international organisations that exist for trading purposes bringing greater economic strength and security to the nations that join.
Free trade is encouraged between these blocks.
As a country joins a firm that operates in that country now has access to every citizen of that trade block. This enlarged market increases demand for a product and globalisation.
The EU, ASEAN (association of southeast Asian nations), BRICS and NAFTA.
For example, with NAFTA US firms can take advantage of cheaper manufacturing in Mexico.
Special economic zones
Areas of a country which has different economic policy to other areas.
Chinas open door policy 1978 to date.
Prior to 78 China was poor and politically isolates country. China was ‘switched off’ to global flows. Millions had died from famine in rural areas. The earliest reforms began in rural areas, Agri communities were dismantled, and farmers were allowed to profit for the first time. Strict controls on the number of children were introduced to curb growth. Chinas transformation into an urban nation gained rapid momentum. 300 million people moved into special economic zones in search of a better life. Only strict regulation prevented the complete emptying of cities. This initial surge of low wage migrants gave China the nickname ‘workshop of the world’ and large tnc’s were quick to set up locations. By the 90’s over 50% of Chinas GDP is created in these zones. 400 million people have escaped poverty.
Chinas open door approach to global flows
- Fdi from China and its TNC’s is predicted to total over 1.25 trillion- 100bn of this is to the UK.
- China agreed to export more rare earth metals.
- Foreign tnc’s are allowed to invest in some sectors including its rail freight and chemical industries.
Chinas closed door approach to global flows.
- Technology companies like google and Facebook have little to no access in China.
- Chinas government sets a strict quota of 34 foreign films to be shown/yr.
- There are strict controls on tnc’s in some areas. For example, coca colas acquisition of Haiyan juice in 2008.
KOF Index
An index for measuring the level of social, economic, cultural globalisation. according to this index in 2018 Switzerland and the Netherlands are the most globalised. Validity of criteria such as participation in UN peacekeeping missions and TV ownership. GDP ranking sees china as the largest economy however it ranks China 80th because it’s less political engaged.
A.T Kearney index
An index ranking global cities New York, London, Paris, Tokyo, and Hong Kong as the most globalised cities. The measure ranks political engagement, business activity and cultural experience. Data counts can include number of embassies, museums and TNC headquarters.
Offshoring
Moving production overseas to reduce labour or other costs.
Outsourcing
Contracting another company to preform a duty the firm was originally doing. this allows the firm to benefit from the economies of scale of other firms. This results in a global production network. For example, 2500 suppliers provide elements for minis mini cooper.
GPN Growth owes much to trade liberalism expansion efforts. However, this brings risks because natural hazards such as the 2011 tsunami can disrupt global supply chains. Horsemeat entered supermarket supply in 2013.
To tackle this some TNC’s are re-shoring to bring their manufacturing closer to home.
Reshoreing
Bringing production back into the home county of a TNC to ensure that production networks maintain security.
Switched off places
Places that are unconnected to global flows and are ungloabalsied. IE North Korea
Case study for switched off places
The Sahel- poverty affects most people in this region. LDC’s lacking a coastline may struggle to attract FDI
Subsistence farmers
Farmers which farm for themselves as well as their families but are not cash croppers.