Globalisation Flashcards
capital flows
the movement of money for the purpose of investment, trade or to produce goods/services. usually regarded as investment into a production operation.
globalisation
a process by which national economies, societies and cultures have become increasingly integrated through the global network of trade, communication, transportation and immigration.
international trade
the exchange of capital, goods and services across international borders. inbound trade is defined as imports and outbound trade as exports.
what are the origins of globalisation?
- Silk road (1st century BC-onwards) - luxury products from china started to appear in Europe.
- British industrial revolution - the expansion of the British empire and innovations in technology led to an increase in global trade.
- neo-liberalism (1980s) - the establishment of free trade agreements and expansion of the private sector led to growth in globalisation we see today.
what are the dimensions of globalisation?
- economic
- social/cultural
- political
what have we seen take place in the economic dimension of globalisation?
- increase in fair trade
- growth of TNCs
- faster, cheaper transport
- long distance flows of goods, capital and services as well as information and market exchanges
what have we seen take place in the social/cultural dimension of globalisation?
- migration
- global communication networks
- media, sport, leisure
- spread of ideas, images and information
what have we seen take place in the political dimension of globalisation?
- influence of ‘western’ democracies on less developed countries
- decline of centralised (communist) economies
- diffusion of government policy and development of market economies in former communist states
what are the flows around the world?
- flows of technology, information and capital
- flows of products and labour
- flows of services and global marketing
- patterns of production, distribution and consumption
BRIC
an acronym used to identify a groups of four countries - Brazil, Russia, India, China - whose economies have advanced rapidly since the 1990s.
diaspora
a large group of people with a similar heritage or homeland who have moved and settled in places all over the world.
economic leakages
refers to a loss of income from an economic system. it usually refers to profits sent back to their base country by TNCs - also known as profit repatriation.
MINT
an acronym referring to the more recently emerging economies o Mexico, Indonesia, Nigeria and Turkey.
containerisation
a system of standardised transportation that uses standard-sized steel containers to transport goods. the containers can be transferred between ships, trains and lorries enabling cheaper, efficient transport.
what are our globalisation flow?
- flows of labour
- flows of products
- flows of services
- flows of information
flow of labour
- not as free-flowing as flow of capital due to restrictions of immigration
- huge rise in migration rates in recent years
- most commonly flows from LICs (e.g. South Asia, Africa and Latin America) to HICs (North America and Europe)
- lots of movement within the middle east around oil-rich countries of Kuwait, Qatar, Saudi Arabia and UAE.
what are some key facts about the movement of labour?
- most migrants move over short distances within the same regions
- North America, Europe and the gulf countries in western Asia attracts migrants from further afield
- most economic migrants moving between continents are not the poorest, but those with some financial and educational means
- the largest regional low of labour in the world is in Asia (from south to west)
flow of products
the international movement f products is facilitated, especially or developing countries, by the reduction in costs of trade.
what are some positives about the flow of products?
- reduced transaction costs due to improvements in ease of capital transfers
- transport and time costs reduced by containerisation
- world trade organisation works to reduce tariffs (regulatory barriers to trade)
international capital flows
all money that moves between countries which is used for investment, trade or production
deregulation of financial markets
late twentieth century, money no longer held within national boundaries
what is the world system model?
world systems theory was developed by Immanuel Wallerstein in the late 1970s. he argued that a global economic system had developed consisting of three zones: core, semi-periphery and periphery and that core countries (mainly those in the west) exploited peripheral countries (mainly those in the global south) working with international institutions such as the World Bank and IMF to do so.
flow of services
services are economic activities that are traded without the production of material goods
what are high level services
services to businesses
- finance
- investment
- advertising
what are low level services
services to consumers
- banking
- travel and tourism
- customers call centres
- communication services
flow of information
information flows are governed by the movement of people through migration and by the speed of data and communication transfers
what is flow of information responsible for the transfer of?
- cultural ideas
- language
- industrial technology
- business management support
what has the low of information been transformed by?
- improvements to global telephone networks
- mobile telecommunication technology
- email and the internet
- live media coverage due to satellite technology
economies of scale
the cost advantages that result from the larger size, output or scale of an operation as savings are made by spreading the costs or by rationalising operations
what is global marketing?
when a company becomes a global marketeer, it views the world as one single market and create products that it various regional marketplaces.
it will develop a recognisable ‘brand’ and employ one marketing strategy to advertise the product to customers all over the world.
having one marketing strategy to advertise on a global scale generates economies of scale which reduces cost.
conglomerates
a collection of different companies or organisations which may be involved in different business activities but all report to one parent company - most transnational corporations are conglomerates.
maquiladora
a manufacturing operation (plant or factory) located in free trade zones in Mexico. they import materials or assembly and then export the final product without any trade barriers.
what is the stage of production?
the stage at which goods are manufactured from raw materials to the point at which they are ready for delivery.
what is the stage of distribution?
the movement of goods and services from the source through a distribution channel, right up to the final consumer.
what is the stage of consumption?
the act of purchasing goods for final/end use.
what has globalisation done to labour?
created a new international division of labour (NIDL)
- countries specialise in the production of various goods and services, enabling them to enjoy comparative advantage.
what are the two main groups in the division of labour?
group 1:
- highly skilled, highly paid, decision-making, research and managerial occupations
- in developed economies
- jobs categorised in the tertiary (marketing/selling) and quaternary sectors (research/IT)
group 2:
- ‘unskilled’, poorly paid assembly occupations
- in developing economies with lower labour costs
- jobs categorised in the primary (extraction) or secondary sector (manufacturing/assembly)
how has the labour division changes in the last 40 years?
- many LICs have become NICs (newly industrialised countries), developing their own industrial bases and their own TNCs. these were know as the ‘four Asian tiger’ economies (Hong Kong, Singapore, south Korea and Taiwan).
- next the BRIC economies (Brazil, Russia, India, China), with the most rapidly growing and prominent being China.
- more recently MINT (Mexico, Indonesia, Nigeria, Turkey).
what was manufacturing like in 1954?
In 1954, 95% of manufacturing was concentrated in western Europe, north America and Japan. for example, ford in Detroit.
global shift
an increase in proportion of global manufacturing carried out in NICs in the last 30 years. the majority of this happening in Asia.
what has global shift led to?
global shift has led to deindustrialisation in key industrial areas in the UK (south wales, for example) and has has a profound effect on the demographic, cultural and socio-economic character of these areas.
what factors affect the location choice of manufacturing companies?
- availability of skilled and educated workforce
- opportunity to build a new plant with the latest and most productive technology
- government incentives in the form of tax breaks or enterprise zones (EPZs) to entice companies to invest and relocate (e.g. maquiladoras)
- access to large markets without tariff barriers, enabled through trade agreements
pattern of consumption
the pattern of consumption is changing rom the traditional LIC/NIC to HIC. instead, as emerging NICs develop, there will be a greater demand for similar consumer products to those being exported from their own countries.
forecasts suggest that consumption will drive trade patterns more than production location decisions and so the fastest growing trade route will be between India and China.
dimensions of globalisation
things which have been impacted by globalisation, changes which have happened to modern society.
factors of globalisation
things that have driven these changes
new technology, communications and information systems
- information can now be shared easily, cheaply and instantly with an audience of billions
- mobile phones are one of the most important technologies or LDEs (less developed economies), connecting people with markets and trading oppurtunities
global financial systems
- banks ad financial services operate across the word, linked together by vital transmission systems hat allow lending and flows of capital
- the 2007 collapse of the US house prices led to a credit squeeze (when banks no longer wished to lend money) and then a global banking crisis in 2008. this impacted flows of capital across the globe
transport systems
- a global transport network allows flow of people and flows of products across vast distances
- without the ‘friction’ of time and space, there are both new opportunities and new threats (e.g. spread of disease)
security
- as national boundaries have become less of a barrier to more mobile and better informed populations, traditional security measures have become less significant and increased flows of people
- cybersecurity is for increasing importance to protect against leaks of information
trade agreements
- without a system of global trading rules, countries would resist some foreign imports whilst possibly favouring others
- the world trade organisation (1994) oversees over 97% of world trade. it provides a forum for negotiations and ensures that trade agreements are followed. the WTO agreement is over 26,000 pages, which hints at the complexity of world trade today
