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What are some causes of globalisation? - Coggle Diagram
What are some causes of globalisation?
Technology
Telecommunications advancements
Modern communications satellites
Telephone companies, cable stations and other media outlets.
Allow data and messages to be transmitted more efficiently around the world.
Integrated digital networks
Created a global voice, video and text system
Internet usage exploded when commercial providers were allowed to sell internet connections to consumers.
Containerisation
Malcon Maclean’s first trucking company was the start of containerization.
The utilization of all available resources allowed containers to easily transfer a large amount and variety of goods.
Increases efficiency, which promotes imports and exports, thus inducing globalization.
Availability of labour
Allows the spread of markets and production world-wide, promoting differentiation of economic activities
Could potentially lead to labour stress and construct hierarchies.
Studies in 1970s show that increased labour help created a new working class that worked for lower wages and in inferior environments.
Studies show that this helps close the wage gap between workers in advanced and developing countries.
Through the spread of technology, this encourages the availability of human labour, it would potentially lead to increasing domestic income inequality.
A significant proportion of industrial activity are shifted to intermediate and developing countries.
Transnational corporations (TNC)
definitions
These companies surpass national boarders which allow them to take advantage of any opportunities that can be discovered of factors in different countries.
Many TNCs can have a greater economic weight than entire nations, they can impact the politics and economy by donating to political campaigns.
How TNCs promote globalization
They can even impact the global trade laws of international regulatory groups.
TNCs as a form of economical globalization often locate their factories in countries that provide the cheapest labour to save on expenses of production.
Advantages
TNCs promote developing nations to provide tax free zones and cheap labour, so that TNCs would work in their country, providing more job opportunities.
The diffusion of ideas between developed and developing countries, promoting more rapid advances.
This makes nations around the world more interdependent, minimising potential conflicts.
Cultural practises and expression are also exchanged and by-passed when goods and services are exchanged.
TNCs are able better allocate their resources to save money from reduced labour costs.
This generally establishes a higher employment rate world wide, lower priced products, higher product output etc.
Disadvantages
However, TNCs can be detrimental to the lower class workers in developing countries as their wages are cut.
When TNCs move their factories to other countries due to the over restriction on labour laws, mass unemployment in developing countries occur.
Workers in the base countries could also be negatively affected as more labour opportunities were sent abroad.
Trade liberalization
It is the removal of barriers that enabled free trade and of goods between countries and nations.
These includes tariffs such as supercharges and non-tariff barriers such as quotas and licensing rules
This enhances production as it allows countries to specialise in goods and services that they are known for, promoting the division of labour.
This fosters economic growth by creating more products and services.
The North American Free Trade Agreement (NAFTA)eliminated the majority of trace tariffs between Canada, Mexico and America.
However, the potential disadvantage is that when a cheaper good floods a market, it can cost people to lose their jobs because many companies are unable to compete with free trade, especially in more developed countries.