Globalisation Flashcards
Globalisation
The process of the word’s economies, political systems and cultures becoming more strongly interconnected.
Complete globalisation = “Global village” the world would be one single community.
Integrated and interdependent - countries work together to manage international issues.
Flows of information
Information such as financial data or news of current events can spread across the world very quickly and very easily due t the developments and rapid spread of email, the internet and social media. This allows people across the world to communicate and work together.
Flows of capital
Money that is invested and spent of something to produce an income or increased profit from it.
Historically, capital was mostly invested within a country and companies would expand by settling up new branches and building factories.
FDI
Capital invested in foreign countries is called foreign direct investment.
From 1996 to 2016, FDI increased from $400 billion to $1500 billion.
Changes in global patterns of capital
Global flows could triple in the next decade due to rising prosperity, the emerging world and the spread of technology.
Capital flow in 2002
The dominant flow was between North America and Western Europe.
There were also important flows, however less in terms of GDP between North East Asia and both North America and Western Europe.
Capital flow in 2012
By 2012, the dominance of North America and Western Europe had declined. Flows increased between Eastern and Western Europe.
The size and number of Chinese flows also increased.
Financial flows are becoming more connected.
Flows of products
Manufacturing industries were historically located in developed countries and products were manufactured and sold in the same countries.
Manufacturing has now decreased in developed countries due to low labour costs over seas.
Manufacturing in the UK
Between 1985 and 2014, the number of people employed in manufacturing fell from 5 million to 2.6 million.
UK imports went from £200 billion in 19990 to £550 billion in 2008.
Flows of labour
Movement of people who participate in a particular work force from one country to another.
International migration increased by over 40% between 2000 and 2015.
Migrants may be either skilled or unskilled workers.
The largest migrant flow is between Mexico and the USA at nearly 2 million.
Flows of services
Economic activities that aren’t based around producing any material goods, e.g. banking.
Improvements in ICT have allowed services to become global industries and they can be located anywhere in the world and still meet the needs of customers.
National finance markets
These were opened up in the 70s and 80s when there was deregulation of rules to increase competition, in the UK and USA in particular.
This made it easier for banks and financial institutions to do business with each other in our countries.
Low/high level services
Low level = customer services
They are being relocated to less developed places where labour is cheaper.
High level = financial services.
Global marketing
The process of promoting and selling products and services.
As products are sold all over the world, marketing must become more global.
Single market
In terms of marketing, treating the world as one single market means using one strategy to advertise a products to customers all over the world.
This is a cheaper approach.
