Globalisation Flashcards
Define globalisation
The growing interdependence of countries worldwide through increasing the volume + variety of cross-border transactions in goods and services, freer international capital flows, and more rapid and widespread diffusion of technology
What is economic globalisation
Development of economies and wealth
Largely caused by the growth of TNC’s
What is social globalisation
Development of income, welfare, migration and reduction in inequality.
‘Americanisation’ + ‘McDonaldisation’ etc.
What is political globalisation
Growth and spread of western democracies and their influence on poor and developing countries.
The decline of centralised economies, so more open to the outside world (China)
What is cultural globalisation
Impact of western culture, art, media, sport and leisure pursuits on the world
Awareness of different culture and norms due to increased globalisation
What is the KOF index
Leading Swiss economic think tank also releases a yearly globalisation index
A ranking of the most global countries based on three dimensions of globalisation: economic, social and political
How many countries does the KOF index cover and who ranks the highest
122 countries
Singapore significantly higher than any other nation - huge economic integration
What did the KOF index of 2011 show
Globalisation is still on the rise, driven by increased economic and political globalisation, whilst social globalisation stagnates
Give 4 advantages of the KOF index
- Allows a comparing degree and changes in globalisation over a large number of countries over 30 years
- Index 2009 is available for 158 countries over the period 1970-2006
- Calculates on the basis of 24 variables
- Uses weighted individual data (a country can enter the high levels of the index, even if a value of the sub-index is not reported due to missing data)
Give 4 disadvantages of the KOF index
- The results sometimes were driven by extreme outlying observations and missing values
- Cultural globalisation mostly refers to the domination of US cultural products
- Anything to do with trade is hard to measure as many countries don’t know the size of their informal economy (black market).
- Some countries remain neutral and do not join international organisations (Switzerland) - this does not mean they are any less globalised
Define flows of capital
Refers to the movement of money for the purpose of investments, trade or business production, including the flow of capital within corporations in the form of investment capital - capital spending on operations and research development.
What is FDI
Foreign Direct Investment
An investment in the form of controlling ownership of a business in one country by an entity in another
Give 5 ways capital is transferred around the world
FDI Repatriation of profits Aid Migration Remittance payments
What is repatriation of profits
Companies with profits made in foreign countries under a different currency periodically repatriate their profits into the company’s home currency
Define flows of labour
The number of people moving in/out of jobs and into/out of being employed
Why have flows of labour increased over time
Social Media/Internet TNC's Overcrowding Transport Advertisement
Despite increases in cross-border movements, most migrants move over……distances within the……region or between neighbouring regions
Short
Same
Give the largest regional flow of labour in the world
Asia
Between 2005-10, 5 million workers moved from SOuth to West Asia
Define flows of Products
FLows of manufactured goods
Why have flows of products increased over time (5)
1) DEMAND
- Better connections so more accessible to increase demand
- Advertising
2) COSTS
- Increase in products produced, lower prices
- Increased competition will drive costs down
- Cheaper flights and transport
3) TRANSPORT
- Development in planes and transport
- Freezer can keep food ripe
- 200 million container movements each year
4) TIME
- Less time to ship products
- Wider communication (telephone)
5) TRADE + TARIFFS
- Tariffs reduced for countries in trade blocs
- Leads to overall decrease in flow of productivity as trade blocs don’t include poorer countries
Define Flows of Information
The complex and extensive flows of information used for communication, power exchange (online order) and symbolic change (education)
Give 3 different ways information flows worldwide
Communication, power exchanges, symbolic exchanges
Telecommunication systems (postal, internet, radio)
Global cities as main hubs
Define global marketing
Process of promoting, advertising and selling products or services.
Views the world as a single market and creates products that fit the various regional marketplaces.
Ideal - sell one product across the world, generating economies of scale for the organisation, reducing their costs and increasing profits
Define glocalisation
ANd give 4 examples for McDonald’s
The production of a global good that is adapted to the local market
- Fish burgers for Catholics in the 1970’s, so they could still eat there on Fridays
- No beef products in India as cows are sacred
- Introduction of salads and wraps as a healthy option
- Beer in Germany
How does the glocalisation of products contribute to globalisation
Allows the companies to operate on a wider scale on the world
Give the timeline of key events in globalisation
Smoke signals - Stone Age
Letters - Ancient Egypt
Carrier Pigeons - Ancient Rome
Telephone - 1876
Wireless - 1896
Satelite - 1929
Fibre Optics - 1966
Worldwide Web - 1989
Give some positive impacts of globalisation on social
- Local societies have gained enormously in cultural diversity
- Global retail change and new types of modern architecture
The Internet allows some local cultures to survive and strengthen, musicians from Mali use YoTube to keep mali’s tradition alive
Give some negative impacts of globalisation on social
Globalisation has sometimes led to conflict between different cultures
Sweatshops
Some traditions have struggled to survive, with some languages becoming extinct as more young people speak English or Spanish
Give some positive impacts of globalisation on economic
McDonald’s use a joint venture, half local stores are Indian owned, so half the profits stay in India
China and India sometimes pay their workers as much as £500 a month for producing App;e phones and other goods
Over half a billion people in China have escaped poverty, following their leader’s decision to embrace globalisation
Many African countries like Nigeria are finally achieving strong economic growth
Give some negative impacts of globalisation on economic
Outsourcing takes traditional factory jobs away from cities like Sheffield and Detroit
Sweatshops may earn less than £2 per day
The proportion of people living in poverty in Sub-saharan Africa has not changed
What is a Trade Bloc
A type of intergovernmental agreement, often part of a regional intergovernmental organisation where international barriers to trade are reduced or eliminated among participating states
Give 5 Trade Blocs
EU - most powerful in the world, GDP nearly as large as the USA
APEC - Asian pacific Economic Corporation, its 21 members account for 45% world trade
CAIRNS - Group of agricultural exporting nations
G20 - rapidly growing companies powerful enough to challenge the EU and USA
NAFTA
What is Economies of Scale (from Trade blocs)
The advantage companies gain because of increased sales
There’s a larger market for all companies within the trade bloc because its easier to trade with other members
More sales mean more products need to be made, so companies buy the raw materials for their product in greater quantities, saving money - making more profit
What is a Comparative Advantage (from Trade Blocs)
Countries can concentrate on developing specific industries
being in a trade bloc means its easier to trade for all the different goods and services a country needs, as trade is less restricted
So countries can specialise in producing things they’re good at making and trade for the things they can’t make
Production will increase in each member country because they’re concentrating on what they do best, increasing production in the trade bloc as a whole
if you had to evaluate the role of technology on globalisation give 5 points
Joined the world as one single global system - railways and telegraph
Container vessels and networks crucial for China to emerge as ‘workshop of the world’
Migration - 250 million people living in countries they were not born in - remittance flows = $500 billion annually
Migrants implementing own culture - mosques and shrines
The spread of information - 15 zettabytes of data transferred through global trade systems
When was the golden era of globalisation
last few decades
