CGP Globalisation

• Globalisation

  The process of countries becoming more connected
• If there was complete globalisation, the whole world would act as a single community
• The world is becoming more and more closely integrated through the movement of information, capital, products, services and labour between countries
• Globalisation as we know it today started to accelerate in the 1500s
• Five factors that promote globalisation

  • Spread of information and communication technology
  • Development and rapid spread of email, internet and social media
  • Increasing flows of information
  • Increasing flows of capital
  • Increasing flows of products and services
• Capital


  Money that's invested to produce an income or increased profit
• Historically, capital was mostly invested within a country, but the amount of capital invested in foreign countries has increased (foreign direct investment)
• Improvements in information and communications technology have encouraged flows of capital around the world
• Increasing flows of capital are making the world more interconnected, as most countries' economies are now dependent on flows of investment to and from other countries
• Flows of products

  The movement of manufactured goods between countries
• Historically, manufacturing industries were located in more developed countries and the products were sold in the same country
• In recent decades, manufacturing has decreased in more developed countries as companies have relocated production to countries with lower labour costs
• As a result, international trade in manufactured goods is increasing
• Changing flows of products are making the world more interconnected, as many manufactured products bought in one country are produced in other countries
• Flows of services


  The movement of services between countries
• Improvements to ICT mean services can be located anywhere in the world and serve customers anywhere
• There has been deregulation and opening up of national financial markets to increase competition and allow financial institutions to do business in other countries
• High-level services tend to be concentrated in cities in more developed countries, while low-level services are increasingly being relocated to less developed countries with cheaper labour
• Increasing flows of services are making the world more interconnected, as people are connected to other countries through services like banking
• Flows of labour


  The movement of people who participate in the workforce from one country to another
• International migration increased by over 40% between 2000 and 2015
• Some migrants are highly skilled workers moving to more developed countries, while others are unskilled workers moving to find better work
• Increasing flows of people between countries are making the world more interconnected, as people bring aspects of their culture with them
• Global marketing

  Treating the world as one single market and using one marketing strategy to advertise a product globally
• Global marketing gives economies of scale and can create global brand awareness
• Marketing needs to be adapted to regional markets though, as different populations have different laws and cultural attitudes