Globalisation

Question 1

Globalisation

Answer 1

is effectively making the world a smaller place and this affects UK labour markets

Question 2

Advantages of firms operating overseas

Answer 2

• Lower operating and labour costs
• Increased competitiveness
• Firms are nearer to markets and materials reducing transport costs
• Overcome exchange rate fluctuations if locate in Europe and use the Euro

Question 3

Disadvantages of operating overseas

Answer 3

• Jobs are lost in the UK
• Unfamiliar culture and language
• Transport costs to home markets
• Exchange rate changes may increase costs and reduce profits

Question 4

Why foreign firms locate in the UK?

Answer 4

• Highly skilled labour force
• Tariff- free access to the European market
• To buy existing UK owned brands and distribution networks
• English is the accepted language of business, science and technology

Question 5

open economy

Answer 5

one that trades with other countries

Question 6

Mobility of labour

Answer 6

the ability of labour to change jobs

Question 7

Benefits of globalisation for the UK labour

Answer 7

• Jobs are created in sectors where the UK does well e.g. finance and specialised manufacturing, aerospace.
• New migrant labour arriving into the UK lowers labour costs
• There are opportunities to increase sales in new export markets

Question 8

Drawbacks of globalisation for the UK labour market

Answer 8

• Low skilled jobs are lost, particularly affecting manufacturing areas of the UK
• Increasing immigration depresses wages
• Relocating production overseas can cause unemployment. E.g. Marks and Spencer’s sourcing its clothes from overseas