globalisation

• Globalisation


  The increasing interdependence between countries through flows of capital, trade, goods and services as well as culture and ideas
• The rate of globalisation is increasing, with LEDCs becoming more involved in global markets and forums, whilst MEDCs become increasingly interdependent on one another
• Causes of accelerating globalisation


  • Economic
  • Political
  • Migration
  • Cultural
  • Flow of Commodities
  • Technology
• Transnational companies (TNCs)


  • Many TNCs have incomes higher than GDPs of many countries
• Online purchasing


  • Becoming increasingly common between countries
• Stocks


  • Traded from across countries and countries invest in each other (Foreign Direct Investment)
  • Some financial businesses (pension funds and investment banks) trade large amounts of currencies in order to make profit
• Trade blocs


  • Become more influential and have reduced tariffs and other protectionist measures
• IGOs (e.g. IMF, WTO and the World Bank)


  • Work to harmonise economies, whilst promoting democratic ideology
• Worldwide media outlets (e.g. BBC, Fox, CNN)


  • Express political views and ideology
• International migration


  • Led to extensive family networks living across the globe, leading to the spread of culture and finance (through remittance)
• International tourism


  • Increased - more people can travel abroad for holidays due to lower transport costs
• Americanisation and Westernisation


  • Of other (often developing) parts of the world
• Imported goods


  • Increasing countries interdependence on one another (some UK bottled water is imported from Fiji, which is 10,000 miles away)
• Manufactured goods


  • The volume has increased rapidly due to low cost countries such as Bangladesh and Vietnam
• Internet


  • Rapidly allowed the spread of information and knowledge
• Social networking sites


  • Become very popular (Facebook had 1.5 billion users in 2015)
  • Networks can allow the spread of culture, ideology and opportunities for migration and tourism
• Server farms


  • Exist currently (e.g. Microsoft's data centre in Washington) which store substantial amounts of data
• Globalisation has led to


  • Lengthening of connections - people can now travel further afield and goods are brought in further away
  • Deepening of connections where connections are penetrating more in depth into most aspects of life
  • Faster speed of connections - people can now talk in real time from different parts of the world and you can travel much faster than previously between different countries etc.
• Important innovations in transport in the 19th and 20th centuries


  • Steam power - In the 1800s, Britain was leading the world in the use of steam technology
  • Jet aircraft - Newer and more efficient aircraft have allowed goods to be transported quickly between countries
  • Containerisation - There are more than 200 million container movements every year and this is extremely important to the global economy
• Technological advancements in the 19th and 20th centuries

  • Telegraph - The first telegraph cables were laid across the Atlantic in 1860s, which allowed for almost instantaneous communication and revolutionised how businesses operated
• Advancements in the 21st century


  • Telephones - Mobile phone use is very common across the world with smartphones becoming even more popular which has allowed better global communication
  • Broadband and fibre optics - Since the 1990s, large amounts of data can be transferred very quickly via cables laid out along the ocean floor
  • GPS - Satellites have allowed companies and people to track goods across the world
  • Internet - Approximately 40% of the world's population have access to it, social media is extremely influential and has led to the rapid spread of news, knowledge and opinions
• Dimensions of globalisation


  • Capital
  • Labour
  • Products
  • Services
  • Information
• Capital flows


  The movement of money for the purpose of investment, trade or business production
• Labour flows


  The movement of people who move to work in another country
• Product flows


  The movement of physical goods from one country to another
• Service flows


  Services are 'footloose' industries, meaning they can locate anywhere without constraints from resources or other obstacles. Services flow as they can be produced in a different country to where they are received (e.g. international call centres)
• Information flows


  Any type of information can flow from one place to another via the internet, SMS, phone calls etc. For example, international news
• Reasons why some countries are 'switched off' from globalisation


  • Environmental - Landlocked countries, poor fertility of land, mountainous or arid conditions, limited land space, vulnerable to climate change
  • Political - The political agenda and governance of a country may limit flows of people or culture, terrorism or active conflict, corruption
  • Economic - LEDCs with little finance extra cannot afford to invest, unstable markets or weak currencies
• IMF - International Monetary Fund


  • Loans money to poorer developing nations, with a key condition being that the country opens up its markets and industries from government control, leading to privatisation
• The IMF can be seen as more of a hindrance than help; LEDCs fall into debt with their industries privatised, which in turn could lead to profits leaving their country and potential environmental or workforce exploitation
• The World Bank


  • Loans money to developing nations with the aim of improving development, and so enabling globalisation
• The World Bank is also seen as controversial and many critics say both this and the IMF organisations don't benefit developing countries, instead they promote LEDCs to increase their debts and limit the government's sovereignty
• The WTO - World Trade Organisation


  • Aims to liberalise trade by removing tariffs, subsidies and quotas
• The WTO has been criticised because it has failed to prevent the EU and USA from implementing protectionist measures like subsidies, and so it has been unsuccessful from creating equal opportunities for all countries to trade
• Attitudes and actions of national governments that can enable or hinder globalisation


  • Free market liberalisation
  • Privatisation
  • Encouraging business start-ups
  • Foreign Direct Investment
  • Censorship
  • Limiting migration
  • Trade protectionism
• Free market liberalisation


  The belief that government interventions in markets would hinder economic growth and development in the long term
• Privatisation


  Private companies bought and ran important assets like railways and utilities that were previously owned and run by the government
• Foreign Direct Investment


  • Offshoring - TNCs set up production facilities in developing countries
  • Foreign mergers - TNCs from different countries join to form one larger company
  • Foreign acquisitions - A TNC acquires another company from abroad, often in a hostile way
  • Transfer pricing - TNCs sometimes channel their profits through subsidiaries in tax havens
• Censorship


  The government restricts the flow of information and knowledge through state-controlled media outlets and internet restrictions
• Limiting migration


  Most countries have some sort of border control and migration monitoring