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Globalisation, Screen Shot 2021-02-02 at 14.32.28 - Coggle Diagram
Globalisation
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Impact
Workers
job opportunities across the globe, rather than just in their home country.
structural unemployment. For example, in the UK after the collapse of the ship building and mining industries, there was a lot of structural unemployment. This is because it was more efficient for manufacturing to occur abroad, so production shifted to lower labour cost nations.
Environment
more pollution through increased production and increased car use, consumers might show more concern towards the environment as their average incomes increase.
deforestation, water scarcity and land degradation.
Producers + Consumers
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lower average costs by switching production to places with cheaper labour. The spread of technology has resulted in firms being able to employ the most advanced machines and production methods.
Governments
might lose their sovereignty due to the increase in international treaties. Individual states would find it hard to resist the force of them, and if countries become members of organisations, they will have to abide by their rules.
Individual Countries
trade imbalances between countries. For example, the US runs a large current account deficit with China, who has a large current account surplus.
imbalances and inequalities in consumers’ and countries’ accesses to health, education and markets.
Globalisation= the ever increasing integration of the world’s local, regional and national economies into a single, international market.
free trade of goods and services, the free movement of capital and labour and the free interchange of technology and intellectual capital.
countries have become more interdependent, TMT the performance of their own country depends on the performance of other countries. EG 2008 and 2009, when the effects of the global credit crunch spread across the globe.
TMT more trade between nations and more transfers of capital including FDI (foreign direct investment)
Characteristics
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- Greater trade in goods and services both between nations and within regions
- An increase in transfers of capital including the expansion of foreign direct investment (FDI) by trans-national companies (TNCs) and the rising influence of sovereign wealth funds
- The development of global brands that serve markets in higher and lower income countries
- Spatial division of labour– EG out-sourcing and off shoring of production and support services as production supply-chains has become more international. As an example, the iPhone is part of a complicated global supply chain. The product was conceived and designed in Silicon Valley; the software was enhanced by software engineers working in India. Most iPhones are assembled / manufactured in China and Taiwan by TNCs such as FoxConn
- High levels of labour migration within and between countries
- New nations joining the world trading system. China and India joined the WTO in 1991, Russia joined the WTO in 2012
- A fast changing shift in the balance of economic and financial power from developed to emerging economies and markets – i.e. a change in the centre of gravity in the world economy
- Increasing spending on investment, innovation and infrastructure across large parts of the world
- Globalisation is a process of making the world economy more inter-dependent
- Many of the industrializing countries are winning a rising share of world trade and their economies are growing faster than in richer developed nations especially after the global financial crisis (GFC)
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