lecture 1 & 2 Flashcards
understanding globalisation
hisotory of globalisation
when was the first wave of globalisation
1870 - ended with ww1
history of globalisation
what was in the first wave of globalisation
- Development of steam power, iron making and textile manufacture - reduction in transportation costs and trade barriers - productivity, specialisation - lower unit costs of production and the development of world trade
- World bank; trade nearly doubled and foreign investment into developing countries tripled - africa, asia and latin american
- Migration across the world;
- 60 million from europe to the new world - USA, canada, austrialia and new zealand
- Within asia ; from china and india to sri lanka and south east asia
= total migrant nearly 10% of the worlds population
history of globalisation
what was global stagnation
Protectionism as dominant economic policy - USA, germany, UK,, franc, italy, japan
Raising tariffs - restricting imports - decreasing world trade
Deepening depression - raising unemployment, decreasing social stability
Globalisation is not an irreversible process; economic integration (trade) took several steps backwards in this period
history of globalisation
when was
(global stagnation)
1914 - 1945
history of globalisation
whe was the second wave of globalisation
1950 - 80
history of globalisation
what happened in the second wave of globalisation
- Integration among the industrial countires - incl geramny and japan
- Multilateral trade liberalisation negotations - the general agreement on trade and tariffs eg WTO
- Economic growth
- Social stability and trend towards greater income equality aided by social welfare policies and programmes eg NHS IN UK
- Most developing economies still isloated, concentrated on exporting primary commodities and pursing inward oriented polcies
- The gap between the rich developed and the poor developiung econoies widened
history of globalisation
when was the third wave of globalisation
since the 1980s
history of globalisation
what happened in the third wave
- Technological advances in computing, telecommunications and transportation and internationalisation of corporations in search for new customers, cheaper resources and skilled labour
- The golden ear for developing coutires:
- Share in global exports of manufactured goods; from less than 25% in 1980 to 80% in 1998
- Economic growth per capita eg china, india, brazil, malalysia and indonesia - exceeding developed economies since 1990
Narrowing the gap between the developed and the developing economies
defining globalisation
rough defintion
the declie in costs or barriers to doing business or otherwise interacting with other nations - integration of markets for goods, ideas, capital and labour
defining globalisation
what are 4 areas of globalisation
- economic - global presence of business intergration of financial insitutions, emergence of international competition
- political - distribution of politico-eco power, loss of national sov, presence of global institutions
- cultural - more frequent exchange of culture through cheap travel, tv, networks, communications, increase trade of culutral goods
- tech - global commuication tech, global transportation tech, speed ad frequency of tech changes
opp and threats of globalisation
what are the 4 opportunities of globalisation
- market access
- financial intergration
- reductio in commuication and transportation costs
- global sourcing, purchasing, production
opps of globalisation
what is market access
- trade liberalisation by GATT (2/3 tariffs reduced) WTO (tariffs 40 to 5% plus non tariff barriers) , ETA
- many countries joining world trade after political changes
- new opps for consumers, businesses, govt
- increasing competition, productiivty and quality of goods - reduced prices
opps of globalis
financial integration
free movement of capital to support exchanges
- portfolio capital - short term loans eg between banks in diff countires
- foreign direct investment FDIs - long term holding to est influence on local firms eg east eu, east asia
opps of globalisation
reduction in communication and transportation costs
- increasing integration ands interdependence of countries, influencing businessa and daily lives
opp of globalisation
global sourcing, purchasing and production
- caused by increasing complexity in product design, production and logistics
- outsourcing production to target national market or regional block
example of global sourcing
- the boeing dreamliner; japan, italy, south korea, france, sweden, india, USA, UK
- ikea - sourcing products from the low cost local suppliers
- toyota can be designed in japan, components sourced in se asia then shipped to Kolinin the crezch republic for assembly before shipping to the us for sale
threats of globalisation
- macroeconomic volatility
- globalisation of competition
- the growing anti-globalisation sentiments
threats of globalisation
macroeconomic volatility
- volatility of short term capital; flows large fluctuations in foreign exchange and interest rates; difficulties to manage long term borrowing, fincial risks and market expansion
- erratic speculations - sudden shifts of investor sentiments and of capital app 95% of international capitial flows are speculative
- increased vulnerability of national economies to global macroeconomic volatility
- eg financial crisses with catastrophic economic repercussions eg 1973 OPEC crisis, 2008-10 crisis)
threats of globalisation
globalisation of competition
- dominance of global brands in some industries eg retail
- intensification of competition in others
- response; leverage core competence in responding to consumer needs ;
- speed of repsonse is crucial in knowledge -based competition
- each part of supply chain needs to add value
threats of globalisation
growing anit globalisation sentiments
- anti globalisation demonstration at international meeting
- globalisation seeen as mis used to justify and legitimise free market capitalism that benefits rich MNCs and TNCs example lobbying of car manufacturers or pharmaceutical companies
globalisation has been blamed for intensifying
- global poverty and economic disparities
- environmental problems
globalisation blamed for intensifying
global poverty and economic disparities
- systematic exploitation of cheap labour
- protectionism of rich countires eg non tariffs barriers
glob blamed for intensifying
environmental problems
- climate change, resource depletion, food and energy insecurity
global environmental problems examples
- environmental pollution and climate change acceleration (dirty production)
- inducing overconsumption and creating waste management problems (disposed products and packaging)
- resource depletion and loss of biodiversity
other global environemntal problems
- climate change;
- most discussed but least quantitatively understood global issue
- economic perspective; related costs make 2% of GDP in developed and 9% in developing countries (reliance on natural resources)
- additonally damages from potential large scale catastophes, loss of biodiversity, impact on human health
climate change and food security
- hunger and malnutrition remain widespread and persistent in developing countries, esp sub saharan africa
- progressive loss of cultivable lands, degradation of coastal areas and shortage of fresh water - affecting livelihood and increase possibilties for conflicts over scarce reosurces
