Globalisation

Question 1

Globalisation

Answer 1

Process of the world’s economies, political systems and cultures becoming more strongly connected to each other

Question 2

What are the three main forms of globalisation

Answer 2

Economic
Political
Social

Question 3

Economic forms of globalisation

Answer 3

-long distance flows of capital, goods, services
-caused by growth of TNCs and international trade

Question 4

Social form of globalisation

Answer 4

-spread of ideas, information, images and people
-impact of western culture, art, media, sport and leisure

Question 5

Political forms of globalisation

Answer 5

-diffusion of government policies
-growth of western democracies and their influence on poor countries + decline of centralised economies

Question 6

Dimensions of globalisation

Answer 6

1. Flow of capital, labour, products, services and information
2. Global marketing
3. Patterns of production, distribution and consumption

Question 7

Flow of capital

Answer 7

-money that is invested and spent on something to produce an income or increased profit
-historically invested within a country eg. Companies expanding through construction of a new factory
-foreign direct investment (FDI) has increased

Question 8

How has FDI changed?

Answer 8

Global FDI increased from $400 billion in 1996 to nearly $1500 billion in 2016

Question 9

How have flows of capital, labour, products, services and information changed ?

Answer 9

Traditionally was from more developed to less developed countries however this is now less clear cut
Most countries economies are dependent upon flows of investment as the world is more interconnected

Question 10

Flows of information

Answer 10

-information such as financial data or news of current events can be spread across the world quickly and easily
-development and rapid spread of email, internet and social media allows large amounts of information to be exchanged instantly across the globe, allowing communication between countries
-world becomes more interconnected

Question 11

Flow of products

Answer 11

-historically manufacturing industries were located in more developed countries and products were sold in the countries they were made in
-in recent decades manufacturing has decreased in more developed countries
-lower labour costs overseas have caused companies to relocate abroad eg. Dyson moved its production to Malaysia in 2002 but still sells the vacuums in the UK
-international trade in manufacturing goods is increasing

Question 12

How has changes to flows of products impacted UK employment?

Answer 12

UK employment in manufacturing fell from over 5 million in 1985 to 2.6 million in 2014.

Question 13

Flows of services

Answer 13

-improvements to ICT mean that services can locate anywhere in the world and still be able to serve the needs of customers across the world
-deregulation during the 1970s and 1980s and opening up of financial markets meant it was easier for banks and other financial institutions to do business in other countries
-companies relocate low level services (customer services) to less developed countries due to cheaper labour

Question 14

Flows of labour

Answer 14

-more people are moving overseas due to factors such as employment or war
-some migrants are highly skilled workers moving to developed countries where wages and working conditions are better.
-some migrants are unskilled workers who move to developed countries to look for work because of unemployment or poor wages
-makes the world more interconnected as people bring their cultures with them (eg. Brick lane case study example)

Question 15

Global marketing

Answer 15

-promoting and selling products or services around the world as opposed to in one country
-the world is treated as one single market and one single marketing strategy is used to advertise a product across the world (due to lower costs)
-brand awareness from logo
-Marketing needs to be adapted to regional markets though – different populations still have different
laws and cultural attitudes – e.g., about consuming alcohol.

Question 16

Patterns of production, distribution and consumption

Answer 16

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.

Question 17

Factors in globalisation

Answer 17

the development of technologies, systems and relationships, including financial, transport, security, communications, management and information systems and trade agreements.

Question 18

Financial systems promote globalisation

Answer 18

-global financial system governs the flows of capital between countries
-financial systems are based on companies called investment banks, these help companies raise capital by selling shares on behalf of the companies.

Question 19

How did the financial system become more global?

Answer 19

1. Information technology- allowed investors greater access to information to help them decide whether to invest
2. New financial products make foreign investment less tricky
3. Financial deregulation undertaken by governments, rules were relaxed and barriers to capital coming in and out of a country removed
4. Commercial banks enabled exchanging currencies

Question 20

Trade agreements

Answer 20

• The global trade system governs the flows of products between countries
• trade controls by governments make it more expensive for companies to sell their products abroad
  -countries enter trade agreements to make trade cheaper eg. NAFTA (North American free trade agreement)
  -two counties trade agreement called bilateral, multiple countries multilateral
  -global trade system is governed by the World Trade Organisation (WTO)

Question 21

Trade controls

Answer 21

Controls include:
a. tariffs (taxes on products coming in)
b. non-tariff barriers (e.g. rules on the quality of products coming in)
c. banning products (e.g. illegal drugs.

Question 22

Transport and communication systems

Answer 22

-improved transport systems have allowed people and products to get to places more easily
-shipping containers allowed more goods to be loaded onto ships at once and transferred onto other forms of transport
-communication satellites were launched into earths orbit in the 1960s, allowed relatively cheap wireless communication between two devices
-optic fibre cables allow fast communication

Question 23

Management and information systems have increased companies’ efficiency

Answer 23

-companies supply chains have become global a company’s supplier, factory, research and development department may all be in different countries
-Outsourcing is when a company pays another company to do work that in the past would have been done in-house, usually to save costs. E.g. rather than developing its own call centre, a company might pay another company to take on these services. Cheap labour costs mean many companies choose to outsource abroad.
. Companies’ working practices have also changed. E.g. casual and temporary contracts allow companies to take on workers as they are required – not having to pay fixed yearly wages saves money.

Question 24

Security - Countries work together to prevent security threats

Answer 24

-globalisation creates new trading relations making trade war less likely
-North Atlantic Treaty Organisation (NATO) aims to improve security
-EU brings greater levels of peace to Europe