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Globalisation - Coggle Diagram
Globalisation
CAUSES OF GLOBALISATION
INCREASED TRADE: Trade is important to the economies of most countries around the world as companies rely on it to make large profits. Intenrational organizations promote FREE TRADE between countries and many countries have created free trade agreements with other countries.
LABOUR AVAILABILITY AND SKILLS: LEDC's have lower labour costs than MEDCs and many also have people with many skills. Industries that use lots of workers can take advantage of cheaper costs of labour and land, along with fewer government restrictions.
IMPROVMENTS IN TRANSPORTING: Larger ships mean that the cost of transporting goods between countries has decrease and that goods and people can travel more quickly. People can travel internationally for work or leisure. Also money for investment can be moved electronically between countries.
QUICK COMMUNICATIONS: The Internet and mobile technology has allowed greater communication between people in different countries. Miles of fibre.optic cable now connect the continents, allowing people around the world to communicate instantly through th World Wide Web. People can read information about foreign countries as easily as they read about their local news and become aware of incidents thousands of miles away in seconds.
The world's biggest companies are transnational corporations which operate in many countris. Not only are markets for goods and service global, but also many businesses have set up officies in other countries. When companies base in MEDCs move factories and jobs to LEDCs this is called OUTSOURCING. They can pay lower wages because the standard of living in LEDCs is low. Laws protecting workers' safety and the natural environment are less stric in LEDCs, which also lower costs for the corporation
ADVANTAGES
Money is invested in LEDCs, providing new jobs and skills. They are able to develop their technology and people are able to improve their standard of living
TNC's bring wealth and foreign currency to LEDCs. The extra money created by this investment can be spent on education health and infrastructure.
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Many problems facing the world today cross national borders and aid agencies can respond quickly to natural disasters
There is a greater access to foreign culture such as films, music, food and clothing
DISADVANTAGES
The richest countries dominate the world trade at the expense of LEDCs which provide the rest of the world with cheap labour and raw materials.
There are no gurantees that investment will benefit the local community as profits are sent back to MEDCs where TNCs are based and TNCs may put local companies out of business
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If it becomes cheaper to operate in another country, the TNC might close down the factory and make local people redundant
As different cultures from around the world interact, they begin to lose their individuality.
Due to the lack of strictly enforced laws, the safety of workers and the natural environment are put at risk
DEFINITION: Globalisation is the process of increase connection of countries, especially in economic, politics and culture.
All countries now belong to the global economy where something that happens in one country can have effectd throughout the world.