Globalisation
- Created by: Maybury
- Created on: 24-04-17 18:18
Different types of employment
Primary - Extraction of natural resources or raw materials e.g. agriculture, mining, fishing, logging
Secondary - Manufacturing and construction or the processing of materials usually in a factory e.g. car assembly, clothing manufactur, iron, steel
Tertiary - Provinding services e.g. personal services include hairdressers, social services include healthcare, profesional services include lawyers and commercial services includes retail
Quaternary - Research and development usually high-tech and intellectual
How employment structure changes over time
The Clark-Fisher model shows the changes in employment structures and their relative importance as countries develop over time. Their are three stages of devlopment: pre-industrial, industrial and post-industrial
Explanation of Clark-Fisher model
The importance of different employment sectors and
Changing pattern of international trade and FDI
International Trade
- The total trade of manufactured goods is 10.5 time larger in 2013 than 1980
- 1980 - most significant trade links between North America and Western Europe, the only significant trade link that didn't involve North America or Western Europe is between the Middle East and Northeast Asia (this is due to Japan's needs for oil)
- 2014 - trade link between North America and Western Europe still strong, links between East and West Europe is stronger (collapse of communism), trade links with China and India have increased (growth of economy/industrialisation)
FDI
- 1999 - predominantly between North America and Wester Europe
- 2009 - FDI increased significantly, remains predominantly between North America and Western Europe, links to Other Asia increased (China and India)
Foreign Direct Investment (FDI)
Example of state led FDI:
- China invested heavily in Africa due to its search for new sources of oil and mineral raw materials
- China is the largest investor in oil exploration in Sudan
- It invested $175 million in copper mining in Zambia
- It owns 45% of Nigeria's offshore oil fields
- It invested in building up Africa's infrastructure - increasingly done by Chinese workers not local workers
- Most investment goes to governments not local companies
- China is pushing sales of its own manufactured goods in Africa - local companies struggling to sell raw materials
Reasons for growth in trade and FDI
- Transport improvements - larger container ships, aircraft help shrink the world, transport netwroks have grown
- Communication improvements - broadband revolution allows companies to operate efficiently globally and allow trade to move faster
- Role of global organisations - promoting free trade and funding development projects
- Growth of trade blocs - e.g. expansion of EU, creation of NAFTA
- Growth of TNCs - capitalising on the above and disparities in labour costs
- Changing politics - collapse of Communism, opening up Russia and Eastern Europe
Role of global institutions in creating a more glo
World Trade Organisation (WTO):
- Deals with global rules of trade between countries.
- It ensures trade flows as smoothly, predictably and freely as possible
- An example of when the WTO has promoted free trade and a more globalised economy is when they ruled that China had violated its free trade commitments as they limited the amount of raw materials such as rare earths that they exported whilst China tried to build up their own industry. This intervention meant that trade was able to flow more between countries
The World Bank:
- Provides financial support for developing countries - it provides loans for big infrastructure projects such as the Akosombo Dam in Ghana which provided power for Ghana to develop a large scale aluminium smelting industry and allows the country to start its transition to a manufacturing economy - the country can trade more
TNCs e.g. Shell, VW, McDonalds:
- Capitalised on infrastructure & transport improvements and disparities in global labour costs - promote business throughout the global economy, linking together national economies around the world
Big help however also improvements in communications and changing politics of the world which also helped
Impact of TNCs on host and donor countries
Tertiary sector TNC
Mc Donald's
Global distribution
- Most countries in the world have a McD's apart from most of Africa, Greenland and Iceland
- The countries in Africa that have McD's are Egypt, South Africa and Algeria
- The USA has the most outlets (13,000), followed by Japan (3,500) and the UK (1,250)
How has it expanded over time
- First expanded to Canada in 1967
- It then expanded to Australia and parts of Europe (UK, France, Germany, Sweden)
- It has continued expanded worldwide
Why it expanded the way it did
- First opened in the USA -> moved to Canada 1st as it is close, has a similar culture
- Moved to Western Europe next -> demand (developed countries + wealthy customers)
- As China and India began to develop economically, McD's moved there
- It moved to Eastern Europe after the collapse of communism
Tertiary sector TNC (continued)
How and why it out-sourced
- Branches are run by regional administrative offices which devolves management (running of around 80% of outlets is outsourced to franchises which have to meet McDonald's standards)
How McDonald's glocalises its franchises
- Tailors to local environment and tastes e.g. India - no beef products, Israel - kosher, Australia - lamb (McOzzie, Ozzie, Ozzie burger)
Secondary sector TNC
Volkswagen
How production differs worldwide
- First site opened in Germany in 1937 -> now factories across much of Europe and Asia but not Africa (only South Africa has one)
- First expansion was to Spain in 1953 followed by Brazil and the USA
- The sites move further from HQ in Germany as communications improve
- As countries develop, VW move there due to cheap labour and people's increasing ability to afford cars
How employment differs worldwide
- The percentage of employess abroad has increased from 35% to 55% and the percentage of employees in Germany has decreased from 65% to 45% between 1990 and 2012
- More production sites abroad ->VW capitalising on trade blocs, cheap labour, also following the market
- As production sites abroad increases so will the number of employess abroad -> smaller growth in employees abroad than factories due to automation of car manufacture
Secondary sector TNC (continued)
Glocalisation
- Alters cars to appeal to different markets and the needs and tastes of the local region, increasing sales e.g. UK-mid-sized saloon, USA - significantly bigger, China - older + cheaper model sold
Mergers
- VW been involved with lots of mergers - bought companies such as Skoda and Audi -> expands the business so more profit
- Bought campanies that already have an established customer base -> greater market due to expansion into different transport (Scania, Ducati) and wealth (Skoda)
Outsourcing
- Capitalising on cheaper labour costs leading to increased profits
Impacts of globalisation on different groups
Beximco (Bangladesh textiles company) employs 90% women - greater equality and jobs for women
Lower labour costs - manufacturing jobs transferred to developing countries - 3.2 million job gain in China - loss off jobs in country where company is based (deindustrialisation)
200 million children around the world are illegally employed in sweat shops
Dangerously high pollution levels found in water and air (air pollution in China) - country where companyis based gets none of this
Long hours, low wages, dangerous work conditions - in 2013 a building contaning clothing factories collapsed killing 1,129 people
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