4.1.1: Globalisation

• Globalisation: Increasing interdependence between countries, shown by an increase in cross-border trade and investment and migration
• Deglobalisation: The reverse of globalisation
• Characteristic of globalisation: Increased trade of goods and services internationally
• Characteristic of globalisation: Higher levels of division of labour and specialisation
• Characteristic of globalisation: Greater migration of workers between countries
• Characteristic of globalisation: Increased interdependency of economic agents
• Characteristic of globalisation: Increased structural unemployment in developed countries due to deindustrialisation
• Benefit of Globalisation: Increased use of economies of scale
• Benefit of Globalisation: Increase in innovation and decreased production costs
• Benefit of Globalisation: Increased competition, leading to lower prices and better quality
• Benefit of Globalisation: Faster economic growth
• Cost of globalisation: Not everyone gains equally, so increased inequality
• Cost of globalisation: Damage to the environment
• Cost of globalisation: Trade imbalances (surpluses and deficits)
• Cost of globalisation: Some countries lose their most skilled workers who move to other countries (brain drain)
• Cost of globalisation: Structural unemployment, due to out-sourcing of manufacturing to cheaper countries
• Trans National corporation (TNC): Companies which operate in more than one country
• Cause of deglobalisation: Usage of protectionism such as tariffs and quotas prevent foreign competition
• Cause of deglobalisation: Economic shocks lead to a decrease in reliance on global trade
• Cause of deglobalisation: Increase in Economic Nationalism, where governments adopt policies to protect domestic jobs
• A world that is more interconnected is also at greater risk of negative economic shocks
• Benefit of globalisation on developed countries: Increased access to foreign markets
• Benefit of globalisation on developed countries: Increased foreign investment, leading to increased productivity and innovation
• Benefit of globalisation on developing countries: Increased access to global markets
• Benefit of globalisation on developing countries: Increased foreign investment, leading to increased access to knowledge and technology
• Cost of globalisation on developing countries: Economic dependence on other countries
• Cost of globalisation on developing countries: Exploitation of the labour force for cheap wages
• Cost of globalisation on developing countries: Degradation of the environment
• Cost of globalisation on developed countries: Increased structural unemployment due to specialisation
• Cost of globalisation on developed countries: Degradation of the environment