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Chapter 9 : NEGATIVE economic impacts of globalisation (Negative economic…
Chapter 9 : NEGATIVE economic impacts of globalisation
Negative economic impacts on COUNTRIES
( Economic Downturn )
Examples
2008 Global Financial Crisis triggered in the USA and affected many countries in the world. It includes a deadline in global industrial production which led to massive unemployment worldwide.
Explain in your own words. How does globalisation harm countries economically?
Globalisation brings about negative economic impacts on countries because of the increased interconnections and interdependence between countries so it will lead to lesser income and employment in other countries.
What is it about?
With increased interconnectedness among countries, economic downturn in one country may withdraw its investments or reduce demands for goods and services, leading to less income and employment for countries affected.
Negative economic impacts on COMPANIES
( Lower Profits - Market Share )
Examples
Carrefour closed its only branch in Singapore after 15 years due to competition from other companies offering similar products in Singapore.
Small and Medium Enterprises (SMEs) face smaller domestic market and shortage of expertise and labour
Explain in your own words. How does globalisation harm companies economically?
Glovalisation brings out negative economic impacts on companies because there are other businesses selling the same item and it causes an increase in competition so it makes it harder for companies to compete for a share of profits.
What is it about?
Globalisation exposes companies to face lower profit / market share because of increased competition from other companies. This would in turn result in a lack of innovation and reinvention.
Negative economic impact on INDIVIDUALS
( Loss of income )
Examples
Uniqlo moved its production out of China to Vietnam, where labour costs were lower, leading to many Chinese losing their income.
Explain in your own words : How does globalisation harm individuals economically?
Globalisation brings out negative economic impacts on individuals because if the company closed down, people will lose their jobs and will not have enough income.
What is it about?
Globalisation exposes individuals to face the risk of income loss due to various reasons ( eg. envolving nature of global economy requiring a different nature of skills )