Globalisation KQ1 Flashcards
Define Globalisation?
A process by which national and regional economies, societies and cultures have become integrated through the global network of trade, communication, immigration and transportation
What are the 4 flows of globalisation?
Goods
Capital - between people, banks, TNCs and governments
Information - via the Internet
People - migrants and tourists
What is economic globalisation?
Involves growth of TNCs, spreading of investment and rapid growth in world trade
What is political globalisation?
Dominance of western democracies in political and economic decision making, spreading the view that democratic consumerist societies are the most successful
What is cultural globalisation?
People increasingly eating similar food, wearing similar clothes, liking similar music and sharing similar values which are western in origin
What is Demographic globalisation?
Occurs as a result of migration and tourism, populations become ever more fluid and mixed
What is the ‘shrinking world’ idea?
The idea that the world feels smaller because places are closer in terms of travel time due to advancements in technology making places evermore connected
What is containerisation?
Before containers, cargo was loaded in crates and sacks, manually into the hold. Now containers are loaded and unloaded by crane. Containers are intermodal and can be transported by ship, lorry or train. Each ship can carry up to 18,000 containers
What is space-time compression?
The cost, in terms of time and money, of communicating over distance has fallen rapidly. Distance is now largely irrelevant in terms of the ability to communicate with them.
What factors have contributed to space time compression?
Mobile phones - widespread from mid 1990s and are now common in many developing countries
Internet access - became common from mid 1990s followed by fast broadband. Almost 50% of the worlds population uses the Internet. Allows individuals at home to trade with other countries and carry out online banking.
What is the role of taxes and tariffs in trade?
Demanding payment of taxes and tariffs on imported goods makes them more expensive to buy than home produced goods thus protecting sales of goods.
What is the role of quotas in trade?
Limits the volume of imported goods thus protecting home producers from foreign competition which can undercut prices.
What is foreign direct investment?
A business from one country invests in another such as opening a chain of shops or building a factory.
What is the role of the world trade organisation?
Works to reduce trade barriers and create free trade. A series of global agreements has gradually reduced trade barriers and increased free trade.
What is the role of the IMF?
Encourages developing economies to accept FDI and open up their economy to free trade.
Promotes a western model of economic development that works in the interests of developed countries and their TNCs.
What is the role of the world bank?
Provides loans to developing countries to aid economic development and reduce poverty. Helps develop deeper ties to the global economy.
What is privatisation?
Governments sell off industries such as electricity, gas, and water which allows foreign investment creating competition within the market, driving down costs.
What is free market liberalisation?
Opening up markets to competition meaning you can chose your supplier based upon quality and price.
What are grants and loans?
Made to new businesses by the government in globally important growth areas such as IT and Pharmacy.
What are special economic zones?
Tariffs and quota free allowing goods to be exported at no cost.
Unions are banned so workers cannot strike.
Infrastructure is provided by the government.
All profits can be sent to headquarters over seas.
Taxes are usually very low.
Few environmental regulations.
Define transnational corporation.
A company that operates in more than one country.
Define outsourcing.
Moving parts of their business, usually administration, to third party companies.
e.g call centres in Bangalore, India
Define offshoring.
Moving parts of their business to cheaper foreign locations e.g Asian SEZs
Define Glocalisation.
TNCs adapting brands and products to suit local market tastes for example McDonalds in India.
What is exploitation?
TNCs outsource manufacturing to developing countries where the workers work long hours in poor conditions for low wages.
(Lower safety standards)
Switched off from globalisation
What is political isolation?
North Korea deliberately isolated itself from the rest of the world, shunning world trade and limiting the use of technologies such as mobile phones and the Internet in pursuit of its own state ideology.
What is physical isolation?
Himalayan mountain countries such as Nepal and Tibet are isolated by terrain and winter snow, limiting their connections.
What is economic isolation?
Rural parts of Sub-Saharan Africa, especially the Sahel, are dominated by a subsistence farming economy. These places are poor and their capacity to make connections is limited.
What are environmental barriers?
Harsh desert, polar, and tropical rainforests all limit development, transport and trade connections.
