GLOBALISATION

  • Created by: HLew
  • Created on: 11-04-19 09:30
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  • GLOBALISATION
    • Globalisation = national economies, societies & cultures = increasingly integrated through global network of trade, comms, transport & immigration
      • Flow of SERVICES
        • High level services:          - to businesses (finance, investment & advertising)>> depend on comms>> faster & easier now                  - conc. in cities in developed world w/ others growing in importance (Frankfurt, Shanghai, Zurich)
          • Transnational service CONGLOMERATES (= collection of different companies/organisations that may be involved in different activities but all report to 1 parent company) ie hsbc                 FOOTLOOSE SERVICES = can be located anywhere w/o considering factors eg raw materials & transport & yet still serve needs of customers worldwide
          • Low level services:          to consumers (banking, travel & tourism, call centres) >> tend to de-centralise low level services ie call centres to india b/c costs= cheaper>>> OUTSOURCING
        • In 2011, largest flow = N. America to W. Europe. Helped by deregulation of financial markets which has removed barriers to finance & thus to flow of services
    • Flow of CAPITAL
      • From rich to poor: 1) Foreign Direct Investment = investment mainly made by TNCs into physical capital/assets of foreign enterprises  2) Aid - Official Development Assistance (multilateral aid) - G7, G20, Group of 77&China - Bilateral aid - NGOs
      • From poor to rich:  Migration - emigration (DIASPORA) of skilled workers moving from LDCs to MDCs >>skill standard in LDCs decreases so disparity between rich and poor becomes greater
        • Inequalities within countries: -developing economies = more unequal than rich eg SA  - inequality worsened >> Sub-Saharan Africa saw GINI index (=represents income/wealth distribution of nation's residents) increase by 9% bet. 1993 and 2008
          • Positives: rich get richer        Negatives: more civil wars and greater disparity bet. rich and poor
          • Inequalities bet. countries: - dev. continuum = more condensed      - fastest growing economies in Asia
            • Positives: MEDCs usually step in to govern/ set up trade    Negatives: MEDCs can influence pattern of change to own advantage >> increase inequality and conflict and injustice>> LDCs limited in how they can respond
      • IMF:                  Positives: help improve cooperation, stability & development & stabilise economies       Negatives: impose severe cuts on education & welfare spending by gments in developing countries
        • World Bank:    Positives:         encourages start-up enterprises in developing countries         - since 1990s, supported more bottom-up sustainable dev. projects than before      Negatives:       conditions attached to loans not always reduced poverty b/c funded major top-down projects
    • Flow of PRODUCTS
      • Movement facilitated by reduction in £ of trade - affected by 4 things:              i) TRANSACTION COSTS (=cost in making any economic trade when participating in a market) >> reduced by improved data flow & transfer of capital          ii) TARIFFS (=tax/duty put on imported good to make them more £ so they don't sell at lower price than local goods      iii) Transport costs>> CONTAINERISATION >move larger quantities > helped by DRY PORTS   iv) Time costs- speed of travel for valuable/perishable goods, increased size of transport = larger quantities >> DRY PORTS
        • Production patterns:          - TNCs produce all over world, mainly in LDCs (GLOBAL SHIFT = filtering down of manu. from MDCs to LDCs >> OUTSOURCING)  but some higher-end brands in home country  - ECONOMIES OF SCALE (= cost advantages from larger size, output or scale of operation as savings made by spreading costs or rationalising operations) >> more produced, faster
          • Patterns of distribution:     - get much larger>> world getting smaller (time-space continuum/convergence) so easier to get products/ services further away    - as Asia becomes more competitive, lots of its exports will be to Asian countries         - W. financial companies have huge potential to benefit form expansion of trade in financial services in Asia-Pacific regions
            • Patterns of consumption: Consumption: different societies & cultures consuming same things>> result of GLOBAL MARKETING>> country loses individuality. Also b/c of JIT TECH>> fast fashion>> increase in logistics companies
        • WTO:                Positives:      agreement reached bet. EU & Latin America over banana trade   - 2013 achieved 1st multilateral agreement in 20 yrs w/ Bali Package>> 159 members  Negatives:       USA, EU & Japan insist large trading nations of developing countries open markets to W. goods      - emerging nations insisted on larger cuts to farming subsidies & tariffs paid to protect EU & USA farmers
          • FREE MARKET= £ & laws decided by people rather than central authorities
            • FREE TRADE= int. trade left to natural course w/o tariffs, quotas or other restrictions
              • FAIR TRADE= trade bet. companies in developed countries & producers in developing countries in which fair £ are paid to producers
                • PARTNERSHIPS & TRADE AGREEMENTS=                 Positives:        aim to reduce regulatory barriers           Negatives:      Members of trade alliance see other members as main market>> limiting>> exclusive
    • Flow of LABOUR
      • From rich to poor:            not often occurring but via OUTSOURCING (= companies arrange for good/services to be produced/provided in other countries usually where costs are lower)
      • From poor to rich:               migrants move for work from S. Asia, Africa, S. America to N. America and Europe           - from India, Pakistan & Bangladesh to oil rich regions of Qatar, Saudi Arabia & UAE             - Move short distances or within neighbouring regions           - N. America, Europe & Gulf countries (oil) attract from furthest away
        • Unequal labour flows occur:              - b/c some jobs in some countries & not others eg Silicon Valley   - b/c there's better pay in other countries
    • Flow of INFO
      • Important b/c of contribution to KNOWLEDGE INTENSIVE GOODS & SERVICES (=have intensive R&D component & use highly skilled & educated labour) eg computer tech>> Silicon Valley, Pharmaceuticals, int. law
        • Affected by 2 things:             1) Movement of people - cultural ideas/lang       2) Movement of data - ind. tech, design & business management support           - transformed by global phone networks, mobile comms, email & internet & live media coverage through satellites

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