Please enable JavaScript.
Coggle requires JavaScript to display documents.
globalisation: the ability to produce any goods and services anywhere in…
globalisation: the ability to produce any goods and services anywhere in the world, using raw materials, components, capital and technology from anywhere, sell the resulting output anywhere and place the profits anywhere
causes
-
-
-
-
-
increase in international specialisation where if countries specialise in making the rpoducts theyre best at making then it will encourage international trade
-
-
impacts
workers
increase in employment ion developing countries however an increase in unemployment in western europe and usa as labour costs are higher. Structural unemployment in manufacturing areas ahs occured.
increased migration as many are economic migrants - moving for work and a better standard of living. They can fill skill gaps and raise producitvity of workers however some may percieve as taking their jobs as the job market becomes more competitive.
-
multinational companies recognise that creating an international employment base leads to higher producivity and training local workers to take higher level jobs within the company is an investement which strengthens the company.
producers
-
globalisation allows firms to source their raw materials from a wider range of countries. The wider the supplier network lower is likely to be the price at which a firm can buy.
footloose capitalism - firms that operate in lots of countries and have the power to move their production from country to country and creating and destroying jobs whilst they do so in order to maximise profits
firms that operate in several countries are able to avoid tax based on transfer pricing, trasnferring their facilities to a low tax area such as ireland or setting up in a low tax area.
government
may have to adopt policies which will increase benefits and minimise losses through lowering taxes or granting subsidies
-
prone to bribery and corruption which is likley to distort developement and lead to lower incomes eg south asia
environment
environmental degradation eg international trade leads to an increase in the international transportation of goods which means more fossil fuels are sued contributing totards climate change and causing resource depletion
-
consumers
-
fall in the price of goods and services because firms are able to produce their goods in countries with lower labour costs eg Bangladesh
-
advantages
producers can benefit from economies of scale and lower production costs because markets become bigger and countries trade
-
-
-
-
trade encourages countries to specialise in goods and services they're best at producing at which increases output
-
disadvantages
Globalisation is causing price of some goods and services to rise for example increasing world
incomes leads to increasing demand so when suppliers unable to meet this demand prices rise
-
-
-