Globalisation Revision Flashcards
What is Globalisation?
It is defined as the increasing integration of economies, people and places around the world through the movement of goods, services and capital across borders. There are also further dimensions of globalisation such as cultural, political and environmental factors.
What is a Shrinking world?
This is when travel time between places decreases and distance declines in terms of its significance. Generally brought about by transport innovations and improvements.
What are the main global flows?
- Capital
- Commodities (materials)
- Information
- Tourists
- Migrant
What are Transnational Corporations (TNCS)?
Businesses that operate across the world. Both as the maker and sellers of goods and services. Many of the largest are instantly recogniseable ‘global brands’ that bring cultural change to places where products are consumed. E.G. Nike, Coke, McDonalds.
What does interdependent mean?
When two places become reliant on financial or political connections. For example, if an economic recession affects a host country for the worst, it will also impact migrant workers. The economy of the source country may shrink too due to falling remittances (money sent home from migrants).
What is the spatial division of labour?
The common practice among TNC’s of moving low - skilled work abroad/offshore to place where costs are low. Important skilled managerial roles tend to remain in the place of origin.
Innovations in transport
Steam power - Britain became the leading world power in the 1800’s using steam technology. Steam ships and trains moved goods and armies quickly along trade routes in Asia and Africa
Railways - in the 1800’s, railway networks expanded globally. By 1904, the 9000km Trans - Siberian railway connected Moscow with China and Japan. Today, railway construction remains a priority for governments across the world. The bullet train in Japan reachers speeds of 250mph
Jet aircraft - Early aircraft’s changed teh world socially, economically, and politically in a way that has never been done before. They generally cruise at 609mph cutting time massively.
Container ship - containerisation caused a revolution in the world of shipping, Otis introduction did not have an easy passage. Ports, railway companies, and shippers were concerned about the huge costs of developing the ports and railway infrastructure needed to handle container ships. Containerisation has lowered shipping expense and decreased shipping time, and this has in turn helped the growth of international trade. Cargo that once arrived in cartons, crates, bales, barrels or bags now comes in factory sealed containers, with no indication to the human eye of their contents, except for a product code that machines can scan and computers retrace. This system of tracking has been so exact that a two-week voyage can be timed for arrival with an accuracy of under fifteen minutes. It has resulted in such revolutions as on time guaranteed delivery.
Development of communication?
- Telephone
- The internet, social networks and Skype/face time
- Broadband amd fibre optic
- Telegraph
- GIS (Geographical information systems) GPS (Global positioning systems)
What are the different types of Globalisation?
- Economic - growth of TNC’s and trade of resources
- Social - international immigration, improvements in healthcare and education leading to higher literacy rates and life expectancy with declining birth rates
- Political - growth of trade blocs allows TNC’s to merge and make acquisition of firms in neighbouring countries, while reduced tariff makes it grow, the WTO, IMF and World Bank work internationally to harmonise national economies
- Cultural - successful western cultural traits come and dominate, old cultures merge and meld with influences, the circulation of ideas and info has accelerated thanks to 24-hour reporting: people also keep in touch using Facebook and twitter (social media)
Some global flows are seen as a threat due to:
- Importing of raw materials and commodities can threaten a nation’s own industy
- Migrants can bring cultural change and religious diversity = not everyone welcomes this
- Information can provide citizens with knowledge that their governments find threatening
- many examples of countries and national governments attempting to isolate or protect themselves from global financial and trade flows, including foreign direct investment organisation e.g The World Bank work hard to persuade countries to take a different approach
Types of FDI:
Offshoring - some TNC’s build their own new production facilities in ‘offshore’ low wage economies
Foreign mergers - two firms in different countries join forces to create a single entity
Foreign acquisitions - when a TNC launches a takeover of a company in another company = countries have different levels of restrictions on foreign takeovers (UK low restrictions, USA high)
Transfer pricing - Some TNC’s have sometimes channeled profits through a subsidiary company in a low tax country such as Ireland. The organisation for economic cooperation and development (OECD) is now attempting to limit this practice
Benefits of trade blocs:
- Remove barriers to trade, allowing companies/TNC’s/markets to grow
- Firms that can produce a lot of products gain a lot due to free distribution
- Smaller firms can merge with TNC’s making their operation more cost effective
Free Trade Blocs
Voluntary internaitonal organisations that exist for trade purposes, bringing greater economic strength and security to nations
Trickle-down
The positive impacts on outer regions caused by the creation of wealth in core regions
Glocalisation
- This refers to the changing design of products to meet the local/cultural tastes or laws
- very common strategy used by TNC’s to conquer new markets
- For example, McDonald’s launched the ‘Mccurry’ to cater to locals tastes and preferences, whereas companies such as Lego do not glocalise their products as they value genuine global appeal (do not take local tastes into account) by gradually creating more complex designs
However, not all companies need to glocalise products. For some TNC’s the ‘authentic’ brand is what generates sales.
