theme 4 - 4.1 globalisation

Globalisation

Globalisation

The process by which economies have become more integrated and interconnection

Economic power

The relative importance of a country based on its ability to buy, sell and produce on a global scale.

Developed economies

Industrialised, high income economies with good infrastructure and high living standards.

Emerging economies

economies in transition: they are usually experiencing industrialisation, rapid economic growth, improving infrastructure and rising living standards.

Employment patterns

changes that happen has an economy emerges, including a move from primary to the secondary and/or tertiary sector, and the urbanisation of jobs.

GDP

Gross domestic product, which is a measure of the total market value of the goods and services produced in an economy in a year.

GDP per capita

GDP divided by the population. This is an approximation of average incomes.

Industrialisation

the process of moving from the primary sector (e.g. farming, mining etc) to the secondary sector (manufacturing) and the tertiary sector (services).

Economic growth

an increase in the size of an economy, usually measured by the % increase in GDP year

BRICS

A group of emerging economies including Brazil, Russia, India, China and South Africa.

MINTs

A group of emerging economies including Mexico, Nigeria Indonesia and Turkey.

Literacy

An important measure of development. Usually involves measuring the % of the adult population (over age 15) that can read and write.

Health

An important measure of development. Usually involves measuring the average life expectancy at birth.

HDI

Human Development Index

Trade barriers

Actions by government to reduce international trade, e.g. imposing tariffs on imports.

Tariffs

A tax on imports that raises their price, protecting domestic rivals from foreign competition.

Quotas

Physical limits on the amount of a particular good that can be imported in a year, to protect domestic rivals from foreign competition.

Trade liberalisation

the removal of trade barriers such as tariffs and quotas between countries. This will usually follow negotiations/a trade agreement between countries.

Containerisation

the use of standardised reusable containers to transport and store goods.

Deglobalisation

the process of diminishing interdependence between nations.

Exporting

Selling goods and services in a foreign market.

Importing

Buying raw materials, components or finished goods from abroad.

Specialisation

when countries or businesses focus on producing a narrow range of goods and services

Competitive Advantage

features of a business and/or its products that enables it to generate more sales or to be more profitable than its rivals.

Foreign direct Investment

investment from one country into another (normally by companies rather than governments) that involves establishing operations or acquiring assets (this also includes stakes in other businesses).

Horizontal FDI

duplicating operations in different countries. E.g. JLR building a factory to make cars in China.

Vertical FDI

where different stages of production occur in different countries. E.g. Rolls Royce (makes aircraft engines) buying a Chinese company that makes components that it uses in its engines.

Inward FDI

A foreign firm invests in the UK

Outward FDI

A UK firm invests abroad