4.1.3

• globalisation

  the growing connection between countries through easier movement of people, goods, services, money, and technology across borders
• factors contributing to increased globalisation

  1. political change
  2. reduced cost of transport and communication
  3. increase of transnational companies
  4. increased foreign investments (FDIs)
  5. increased migration between economies
  6. growth of global workforce
  7. structural change
• political change

  • following death of Chairman Mao, 1980-90s China saw a move from hard-line communism, with private ownership business allowed
  • joined WTO, accessing western markets and chance for export-led boom
  • britain leaving EU, along with US election 2016, such changes slow down globalisation
• reduced cost of transport & communication

  • stable oil prices or fallen contrary to fears of low supply, driving costs up
  • technologival advancement = more efficient engines, reducing fuel consumption + costs
  • technology enabled building bigger trains, boats and planes = allow for economies of scales
• increase of transnational companies

  • global giants in many markets, seek growth by entering new markets to boost sales yearly + keep shareholders happy
  • when TNC to new market, locals face new powerful competitors
  • are companies transforming resources + products between countries = boosting international trade
  • when TNCs sell in many markets, choice in nation declines: different national markets become less different
• increased foeign investments (FDIs)

  • financial markets willing to invest capital in businesses elsewhere = world is a smaller place
• increased migration between economies

  • proactive and determined workers, willing to move and work elsewhere
  • relatively educated
• growth of global workforce

  • companies managed to lower labour costs by seeking labour market as global father than local or national
  • many UK businesses offshored production in order to benefit from cheaper labour elsewhere
  • meanwhile other UK businesses face staff shortages, recognised benefits of recuiting from abroad to fill jobs, that otherwise have to be offshored or left undone - losing sales
• structural change

  • economic development = structural change = reduced reliance on agriculture + shift to manufacturing and services
  • major economies with rapid growth past 40 years have specialised to improve international competitiveness + find export markets = enable rapid development + sustain globalisation