Factors of production

• Dimensions of glob:

  • Globalisation is caused by the movement or flow of people, information, money, goods and services between countries
  • even our env are globalised as pollutants from other countries can affect our climate
  • laws and regulations put in place by international organisations (IGOs) which affect what we can do to our env e.g. Montreal Protocol (1987) which called for reductions in CFCs internationally
• Connections between people and places > changes over time due to glob:

  • Connections has lengthened in distance over time (products and services are sourced routinely from distant places)
  • connections have deepened (a sense of feeling 'globally' connected now extends into many different areas of modern life ranging from imported food and TV programmes to our use of global social media)
  • connections become faster e.g. talk in real time through Zoom etc
• Factors of production:

  • Inbound trade = imports
  • outbound trade = exports
• Productive resources combined to produce goods and services:

  1. Land > natural resources e.g. minerals, soils, water
  2. Labour > human resources available > quality and quantity are key
  3. Capital > any physical resource that can be regarded a man-made air for production e.g. buildings and machinery
  4. Enterprise > human capital > the ppl who take the risk to produce goods and services
• Types of flow:

  1. Capital flow
  2. Labour flow
  3. Product flow
  4. Service flow
  5. Information flow
• Types of flow > capital flow:

  • every day, enormous flows of money pass through the world's stock markets
  • investment banks, pension funds and private citizens buy and sell shares and money in diff currencies to make profit
  • 2013 > daily volume of foreign exchange transactions reached $5 trillion
  • money invested by companies overseas is the Foreign Direct Investment (FDI)
• Types of flow > labour flow:

  • despite restrictions imposed by govs, record migrations have bee recorded recently
  • soon there will be half a billion economic migrants in the world e.g. Qatar reliant on Indian construction workers
  • can be highly skilled or upskills migrant workers who bring aspects of their culture with them
• Types of flow > product flow:

  • flows of manufactured goods are increasing due to low production costs in China and even-lower waged economies e.g. Vietnam
  • 2015 > global GDP just below $80 trillion, of this 1/4 was generated by trade flows in agri and industrial commodities
  • produced in LICs due to outsourcing and exported for sale in HICs
• Types of flow > service flow:

  • customer services provided in LICs to serve the needs of customers in HICs
  • by 2040, India expected to be second largest economy in the world and some of its econ success due to the call centres which Indian workers provide to the US and EU
• Types of flows > information flow:

  • news and info spreads quickly and easier online with real-time comms between far away places
  • email, internet, social media, online commerce e.g. Amazon etc
  • Facebook had 1.5 bn users in 2015
  • on-demand Tv increased info flows in recent years
• What is the KOF index?

  • an annual index of glob
  • measures social, econ and pol aspects of glob
  • uses a wide range of data such as participations in UN peace-keeping missions to TV ownerships
  • countries are scored out of 100 and the higher the number the more globalised it is
• How is the KOF measured?

  1. econ > econ flows, restrictions on trade and capital
  2. social > personal contacts, tourism, internet users, TV subs, radios, no. of international newspapers sold
  3. political > no. embassies and high commissions, memberships of inter organisations and participation in UN peacekeeping missions