Globalisation

• Globalisation def


  ~ the increasing connectedness of countries around the world - through movement of goods, services, capital and ideas across borders
• 4 types of globalisation

  ~ Economic - the increase of TNCs (transnational corporations) & information and communications technology (ITC)

  ~ Social - international migration, improvements in education and healthcare, and social interconnectivity

  ~ Cultural - through western cultural characteristics dominating in some areas. also glocalisation and hybridisation, and the increasing speed at which the ideas and information are circling

  ~ Political - increase in trade blocs, free trade agreements and global organisations (e.g. the world bank, the IMF, and WTO)
• TNC def


  companies who operate in many countries producing and selling goods & services
• Glocalisation


  changing the design of products to meet local tastes or laws

  ~ e.g. changing the macdonalds menu in Arab countries to be halal
• Trade blocs def 


  a group of countries and / organisations that work together for trading purposes
• How were past global connections made

  through colonialism (obtaining control over another area through the occupation of the land and exploitation), trade, and co-operation between countries through international organisations
• Points about modern globalisation

  ~ its about:

  > the lengthening of connections between people and places, with products obtained from further away than ever before

  > the deepening of connections with the feeling of being deeply connected to other people and places in every aspect of life

  > the faster speed of connections with the ability to communicate with others in real time using new technologies or travelling quickly between continents
• Types of flows of movement

  ~ capital - money flows through the world's stock markets

  ~ commodities - valuable raw materials (e.g. fossil fuels, food, minerals)

  ~ information - internet allowing real-time communications between countries globally

  ~ migrants - movement of people still face challenges due to border controls and immigration laws

  ~ tourists - budget airlines have made it possible for people to travel further more easily

  * these flows have increased the interconnectedness of places, increasing the interdependence of places
• Transport technologies in the 19th and 20th century

  ~ steam power --> steam ships & trains moved goods and armies along trade routes quickly in the 1800s

  ~ railways --> railway networks expanded globally in the 1800s - remains important e.g. HS2 railway links London to Northern England - reduces journey times by a half

  ~ jet aircraft --> intercontinental jet aircraft - makes international travel easier

  ~ container shipping (containerisation) --> vital to the global economy since the 1950s (largest container ships nowadays carry 24,000 containers)
• Shrinking world effect 


  ~ this is when places around the world take less time to reach --> this is due to developments in technology, and therefore they start to feel closer

  ~ this idea can be referred to as 'time-space compression'
• Foreign direct investment (FDI)


  ~ a financial investment made by TNCs into a country's economy

  ~ it is an example of a global flow

  ~ countrys can try to protect themselves from FDI by TNCs
• Role of WTO in globalisation

  ~ took over from the general agreement on tariffs and trade

  ~ promotes trade liberalisation e.g. for manufactured goods

  ~ example --> they failed to stop the USA and EU from subsidising their own food producers - hinders farmers in LIDCs
• Role of IMF in globalisation

  ~ they transfer loans from HICS to countries that have applied for help

  ~ Recipients of the loan must agree to run free market economies so TNCs can locate there easily

  ~ They have strict conditions on governments borrowing which may result in governments reducing their spending on healthcare education, etc.
• Role of world bank in globalisation

  ~ Lends money on a global scale

  ~ Gives direct grants to developing countries

  ~ they impose strict conditions on loans and grants
• Free trade blocs 


  ~ free trade blocs allow governments to trade freely with neighbouring countries and allies which brings many benefits e.g.:

  > companies grow as they gain access to more customers

  > a bigger market increases demand of products and services

  > smaller companies can merge to form TNCs - reduces production costs
• Government policies


  ~ Free-market liberalisation --> lifting restrictions for companies and banks - reduces cost for TNCs to locate and operate in these countries

  ~ Privatisation --> allowing companies to take over important national services e.g. railway and energy supply to reduce government spending - attractive to TNCs as they would gain a stake in vital services

  ~ Encouraging business start-ups --> aims to increase profits for businesses by using strategies e.g. low business taxes and changes in the law
• SEZs (special economic zones)

  ~ they are in the industrial areas near the coast - as favourable conditions have been created to attract TNCs

  ~ these are also known as export processing zones
• Government subsidies 


  ~ an incentive for TNCs to locate in these countries as costs are reduced
• Changing attitudes to FDI


  ~ countries working to attract FDI increase their global presence

  ~ e.g. Saudi Arabia changed its official weekend to Friday - Saturday to be more in line with other countries - to be able to participate in the global market
• Localism - a key response to globalisation in developed countries

  ~ localism is the idea that food and goods should be grown locally --> supports local jobs, reduces transport - and therefore is more sustainable and these goods aren't being sourced globally
• Consumer society 


  ~ this is a society that often buys new goods and services and place high value

  ~ this has been promoted by globalisation from reducing prices (which increases purchasing power) and increasing the choice of products

  ~ resource use and pollution means that it is unsustainable environmentally and ethically (economically and socially)
• KOF index - measuring globalisation 


  ~ KOF index produces an annual index of globalisation

  ~ measures social, economic & political aspects of globalisation

  ~ uses a wide range of data

  ~ countries are scored out of 100 - the higher the number, the more globalised the country is

  ~ some issues with the index:

  > only available for 122 countries (2023)

  > some of the indicators used are now outdated due to improvement in telecommunications

  > some cultural bias - e.g. the amount of McDonald's

  > doesn't take environmental factors into account
• AT Kearney index - measuring globalisation

  ~ the AT Kearney world cities index aims to look at how countries cope with population growth and a shrinking world

  ~ it ranks cities according to their:

  > 'business activity'

  > 'cultural experience''

  > 'political engagement'

  ~ the number of TNC headquarters, museums and foreign embassies give data for this

  ~ Indicators include trade bloc membership and levels of migration / FDI

  ~ Issues with the AT Kearney index:

  > only includes 156 countries (2023)
• Globalisation def 


  the increasing interconnectedness of countries around the world through the movement of goods, services, capital and ideas across borders
• TNCs - how they build their global business

  > offshoring - moving parts of their production process (e.g factories or offices) to other countries to reduce costs (e.g cheaper labour)

  > outsourcing - contracting with a different company so they produce goods and services they need (when a business used another business to make a part of their product/provide a part of their service)

  > global production networks -> setting up chains of connected suppliers of parts and materials which contribute to the manufacturing/assembling of consumer goods

  ~ TNCs can increase profits with glocalisation
• Switched-off regions 


  ~ mainly LIDCs that remain switched off from the global networks

  ~ in these countries, strong flows of trade and investment with other countries are absent

  ~ examples:

  > North Korea --> has chosen to remain isolated from the rest of the world

  > The Sahel region --> experience many challenges e.g. the arid climate, desertification and poverty - this has hindered their development and therefore their ability to connect to global networks
• Global shift 


  ~ the relocation of different types of industry, especially manufacturing

  ~ many industries have relocated from Europe & North America to Asia, South America and more recently, Africa

  ~ offshoring, outsourcing, and encouraging business start-ups in countries e.g. China and India have all caused global shift

  ~ It has created unethical practices in certain countries e.g. poor working conditions, child labour, and low wages
• Environmental impacts of global shift (in developing countries) and examples

  ~ air and water pollution

  ~ loss of farmland

  ~ loss of biodiversity

  ~ land degradation

  ~ over-exploitation of resources

  
  

  ~ E.g.:

  > Chinese workers getting poisoned by chemicals that are used to treat the glass for iPhones

  > Smoke pollution and risk to mammal species from large scale forest burning and

  > 100,00 hectares of rainforest lost per year due to palm oil plantations and mining
• Deindustrialisation - effect of global shift on developed countries

  ~ deindustrialisation has caused social and environmental problems:

  ~ dereliction

  ~ depopulation

  ~ rising crime

  ~ high unemployment
• Types of migration


  ~ Elite international migration:

  > migrants are highly skilled / socially influential people

  > wealth comes from their profession or inheritance

  > many live as 'global citizens' owning multiple houses in different countries

  ~ Low-waged international migration:

  > global hubs (highly globally connected city) are very attractive to these migrants

  > they work in low paid jobs (legally or illegally)

  ~ Internal migration (rural-urban):

  > these migrants are the main reason for urban growth in global hubs in developing and emerging economies
• Costs and benefits of migration to host countries

  ~ Benefits:

  > migrants can fill skill shortages

  > economic migrants are usually willing to do labour work e.g. farm work

  > migrants pay taxes and spend their wages on rent and in shops

  > some migrants may start businesses - employs more work

  ~ Costs:

  > possible social tension

  > policy changes to address public concerns

  > shortages of schools in some areas due to natural increase within youthful migrant communities
• Costs and benefits of migration to source countries

  ~ Benefits:

  > migrant remittances (migrants send parts of their wages home to support their families)

  > reduced spending on healthcare and housing

  > migrants or their children may return - brain gain (bring skills and knowledge)

  ~ Costs:

  > reduction in the independent working population that would've contributed to the economy

  > reduced economic growth as consumption falls

  > increase in the number of dependents (children and elderly)
• Cultural imperialism


  ~ this is the promoting of culture in another nation

  ~ it is usually a large and powerful nation forcing change into a smaller, less affluent nation through the use of legal or military tools
• what is the gini coefficient

  ~ it is a measure of inequality in the distribution of household income

  ~ countries are scored between 0 and 100 (the higher the value, the greater the income inequality)

  ~ a score of 0 suggests that everyone has the same income in a country

  ~ a score of 100 suggests a single person receives all of a countrys income

  ~ e.g. Russia has a score of