Globalisation

What is Globalisation

Globalisation is the increased interconnected world we have with increased trade in goods and services and capital flow

How was WW2 a driving factor for globalisation

Countries determined to co-operate and avoid another catastrophe became more open reducing trade barriers like tarrifs, quotas and regulations.

-Also after WW2 there was a shortage of many goods and this helped foster better relations between nations who needed to cooperate

How was improved transportation a driving factor for globalisation

-Air transport,roads ahve all improved both the efficiency with which they can transport goods and the quantity

-By far the biggest transportation improvement in terms of trade has been containerisation. The transporting of goods in standard sized containers that can easily be moved between ships, trains and trucks has made it far more convenient to trade in all sorts of goods and cheaper.

How has improved technology been a driving factor of globalisation

The internet has had a huge role in connecting the world and increasing the pace of globalisation by making it so easy for firms in one country to interact with consumers in another.

How has changes foreign investment been a driving factor for globalisation

As well as improvements in the trade of goods, countries also reduced rules about foreign ownership. This led to the development of large multinational corporations that exist today spanning multiple countries.

How is GDP per Capita used to measure development

GDP per capita gives a good idea of the average income of a country because output is income for those that produce it.

-An increase in GDP per capita suggest higher average income and therefore high standards of living

How is HDI(Human Development Index) a way to measure development

This combines data on life expectancy,education and per capita income indicators which are used to rank counties into four tiers of human development.

-A country scores a higher HDI when lifespan is higher,education level is higher and gross national income per capita is higher .

How is Life expectancy used to measure development

Life expectancy is the average age to which a person lives

-An increased in life expectancy suggest better health of population, better health and safety regulations and.l better access to healthcare

-May vary to political conflict and environment issues

How is Education used to measure development

Two measures are-Access to education which includes total number of children attending primary,secondary and higher education

Another one is literacy test-percentage of adults who can read and write

B-Education has strong links to future productivity and economic growth. Can help with inequality(better wages)

How is Technology a method of measuring development

A-Access to mobile phones/TV/Internet

B-Access to technology suggests access to benefits like education,personal banking and business. Higher spending on research and development suggest future development due to advances in technology,production and innovation

What are the benefits and costs of Globalisation to producers in developed counties

1)BENEFIT-Wide markets to sell to. This means more revenue which means more profit. This means more re-investment, which leads to more output which leads to economies of scale to reduce their cost

1)COST-Depends on the policies of the country you’re selling to. I.e tariffs and competition also depends if they can access these customers

2)BENEFIT-Better quality and cheaper imports to their production process.This is because they’ll be getting more specialised products to globalisation forcing all counties to specialise

2)COST-Depends on competition/tariffs in your country. Also producers may be vulnerable to drops in demand

3)BENEFIT-Advances to technology due to share research and development projects from other counties. This helps them to become more efficient and develop innovative products

COST-However, depends on the country. As a more developed country is likely to benefits first as they have more money. Less developed benefit much later

4)BENEFIT-Cheaper and more skilled workforce. More developed counties can outsource work to cheaper countries. Lowering cost

4)COST-However, depends on type of good/job. Also depends on actual difference in wage and costs

What are the Benefits and Cost of globalisation to workers in developed countries

1)BENEFIT-More jobs available as firms grow in size. This could mean more employment and will cause income and standard of living to rise

2)BENEFIT-More jobs from foreign investment

3)BENEFIT-Geographical mobility. Workers are able to work in different counties

1)COSTS-If workers are specialised in a declining industry it may be hard to find new work that is suitable

2)COSTS-Global downturns may affect local unemployment levels as less exports are demanded so there’s job insecurity

3)COSTS-Immigration could lead to some people losing their jobs to qualified foreign workers willing to work for less. It may means wage rates are low lowering standard of living

4)COSTS-Jobs lost to automation. As firms automate processes in a bid to cut cost to compete with overseas firms

What are the Benefits and Costs of globalisation to consumers in developed countries

1)BENEFIT-Wide range of goods so more choice due to there being products all over the world

1)COST-Hemogenisation. This is because large firms outcompete small ones and the experience of going shopping in developed nation can be very similar with the same brands on offer

2)BENEFIT-Lower prices as a result of things being produced by specialists with a competitive cost advantage

2)COSTS-Price Volatility-This is because markets have large demand and demand can increase very quickly for necessary goods causing prices to rise

3)BENEFIT-Better quality and more innovative goods as a result of firms responding to increasing competition

3)COSTS-However, depends on type of market-monopoly or competitive.

4)BENEFIT-Greater opportunity to travel

4)COSTS-However, depends on consumers incomes-can they afford it

5)BENEFIT-Improved services due to more skilled professionals from abroad

5)COSTS-Depends on immigration policies

How does globalisation help with economic sustainability in developed nations

-As globalisation leads to everyone being specialised so improves economic sustainability

-Firms in developed nations move their production to more profitable areas and away from ones they’re no longer competitive

-This means overall cost are reduced as quality and cost of inputs go down as they’re able to get things from other specialist

-This lower cost means economics growth

However,may be short term if developed nation has low demand or relocates. Also potential tax avoidance.

How does globalisation lead to social sustainability in developed nations

-Lower prices help to improve people’s quality of life as they’re can afford more of the goods and services they want

-However, potential unemployment if industry closes down due to increase globalisation

How does globalisation lead to environmental sustainability in developed nations

-Increased use of fossils fuels to transport goods around the world so increased pollution

-International trade means more specialisation which means more efficient production and less waste of resources

-Moving production to counties with low standards of environmental protection which may still contribute to environmental issues like overall emission levels

What are the benefits and costs of globalisation for producers in less developed nations

1)BENEFIT-They have a wider market to sell to

1)COST-If the economy they sell to are not doing well it may lead to a fall in demand for their goods

2)BENEFIT-They can often achieve big technological advances through research and development projects with developed nations

2)COST-May find it difficult to keep skilled workers so there’s brain drain where skilled workers want to earn more money in more developed nations.However, depends on state of economy/incentive to stay

3)BENEFIT-Producers in less developed nations may be able to attract foreign investment to their country allowing them to grow and expand and take advantage of economies of scale.

3)COSTS-New small scale industries may have trouble competing with international firms limiting new opportunities in less developed nations

What are the benefits and costs of globalisation for workers in less developed nations

1)BENEFIT-As globalisation leads to greater trade and therefore higher output this means more workers are needed to produce that additional output

1)COST-Producers may look to invest in machinery instead of workers leading to job loss due to automation

2)BENEFIT-Workers are able to get jobs in other parts of the world that may offer higher wages and or a better standard of living

2)COSTS-In less developed nations the majority of profit and extra money made from increased trade by globalisation is retained by owners of firms which leads to increased gap between rich and poor causing income inequality(However depends on government policies to reduce gap)

3)BENEFIT-Increased foreign investment can mean more job opportunities for workers

3)COSTS-Workers may be subjected to poor working conditions as producers aim to cut costs in countries with less stringent health and safety protections for workers(However depends on government polices/regulations)

What are the benefits and costs of globalisation to consumers in less developed nations

1)BENEFIT-Wider choice of products for those that can afford them including products from multinationals

1)COST-Globalisation opens up markets for higher demand. If market can’t keep up their supply then we might see demand pull inflation this can be a problem on essential goods

2)BENEFIT-Greater ability to travel for those that can afford it

3)BENEFIT-International investment often brings improvements in infrastructure which can benefit consumers who get better roads,rail systems and other transport networks

3)COST-If a lot of the best and brightest leave for jobs in other countries then services in the les developed nation will be poorer with less professionals available

How does globalisation cause economic sustainability in less developed nations

-Increased production and trade means more jobs to produce the additional output meaning increased incomes,which fuels higher demand leading to economic growth

-Whegher this is sustainable depends on whether they maintain competitive advantage and whether production is sustainable

-Increase economic growth should mean increased incomes for government which may be used to improve infrastructure and facilities

-If economic growth is based on non-renewable resources then if they run out then economic growth stops

How does globalisation help with social sustainability in less developed nations

-Increased income from more employment help to reduce level of poverty

-The gap between rich and poor if likely to grow

-Rising prices of products due to increased global demand will have big effect on poor

How does globalisation help with environmental sustainability in less developed nations

-Globalisations means specialisation which means efficiency in the use of finite resources which is good for the environment

-However means more pollution from transporting goods

-Firms often move production to less developed nations due to weak environmental laws