Factors affecting globalisation (5)

globalisation

= has accelerated and deepened due to different advancements globally

.. development of technology, international relationships, and the implementation of systems have helped in creating a more globalised world

Factors the affect globalisation

Finance
Transport
Security
Communication
Management

Financial factors

the relationship between those who borrow money, those who invest money, and the institutions that hold, give out and take in this money

borrowing/investing of money occurs internationally + nationally

how do global financial systems accelerate globalisation

makes the world more connected

- banks = large global institutions that work with millions of peoples money

- multinational corporations invest profits for more interest
= more investment abroad, repatriation of profits from TNC's

- increased foreign ownership of firms

- people buy and sell shares and stocks from global corporations internationally

- entire countries invest and take loans from huge financial institutions
e.g., the world bank

- countries borrow, lend, and invest in other countries which develops the relationships between countries

- IMF and world trade organisation (work to maintain stable financial system + reduce trade barriers) = promotes free trade

financial factors examples

1. 2014, world bank gave US$470 million loan to the Philippines for a poverty reduction

2. DRC received $70 million for HEP project from world bank
... can sell energy to other countries


3. 2008, Greece received first in a series on loans from IMF when its foreign currency earnings were insufficient to pay its existing debts

Technology's affect on finance factors

= has allowed financial information and money easily accessible
... deepening connections between countries

- informed decisions about investments, buying and selling, and other financial information is all available due to global communication technology
e.g., stock market trends easily accessible

- the ability to connect with international banks have allowed people to have offshore bank accounts, creating more personal wealth

- global banks can operate even when they're relocated to LICs as money can be transferred to a country (building + developments)
... profits can be sent back to the company HQs

- ability to transfer money thanks to the internet has revolutionised global finance

- remittances can be sent home with speed + ease
- cryptocurrency developed which has created a whole new market for online currency + trading

Transport factors

easier to transport goods faster + in larger quantities


1. aircraft
2. containerisation
3. air travel and commercial flights
4. high speed rails

... world has become more connected and globalised through these connections

Harnessing new forms of energy allows larger loads to be transported
...larger loads = economies of scale (reduced cost/unit output)

Transport - Larger & Faster aircrafts

= increased capacity, reducing travelling times
... products can be sold over large distances in short spaces of time
(cargo airplanes)

Security factors

countries face threats from other countries due to globalisation

certain security systems uses communication technology and other technology to keep countries safe

1. strict regulation
2. cybersecurity
3. UNSC
4. monitoring

security factors affect on globalisation - Strict Regulations

regulations upon entering a country and transporting goods

... international customs control flow of people/goods in and out of countries to ensure safety

e.g.,
use of automatic x-ray technology to stop drugs, weapons, human threats entering a country

security factors examples

The 'Bretton Woods institutions'
= established after WWII in hope they would make the world more politically secure by stabilising the world economy + avoid replicating the shocks of the 1920-30s.

The UN, EU and NATO also have roots in the post-war era when governments sought to promote world security and lessen chances of future conflict through greater co-operation of similar economies

communications factors

= has allowed flows of information, services and capital to accelerate

connectivity between people has rocketed

400 million tweets per day on twitter

"the future is built for machines not humans"

"the future is already here. just unevenly distributed"

time space convergence

The idea that distance between some places is actually shrinking as technology enables more rapid communication and increased interaction among those places

communication factors affects on globalisation

Social:
- satellites + fibre optic communication enabled the growth of internet and mobile phone systems
... in turn allows money and information to be transferred internationally
- the global availability of smartphones and apps (social groups, GPS apps) have added new dimensions to migration
... allows people to move with less restraints

Economic:
TNCs and management
- corporations can communicate with overseas factories quickly and easily
... means the negatives of moving production overseas to LICs is reduced
- services can be accessed through the internet or on the phone (call centres)
... allows for millions of jobs to break created that can ne accessed through technology


Political:
- relationships can be maintained from great distances
... deepens global connections and may increase flows of labour as people are more likely to move if they can still communicate with their families abroad

management factors

= accelerated the process of globalisation by the way companies manage flows

now common systems in the majority of global companies to make these companies more efficient

1. economies of scale
2. global supply chains
3. outsourcing
4. offshoring

management factors: economies of scale

= the concept of increasing profits by producing larger amounts of products with lowered costs of manufacturing

... can save money by upscaling production

- raw products bought in bulk, meaning they're cheaper

- large amount of products can be made quickly on production lines, less money is spent on labour

- large amounts of products can be shipped, meaning transportation costs are reduced

if managed, ensures profits are heightened in the long term

management factors: global supply chains

= the organised management of product flows from when they are manufactured to when they are delivered to consumers

... due to ability to communicate information and transport products, companies can now have different stages of production in different countries

=> minimised costs overall as each stage of production is specialised rather than having one factory that has to control every aspect of production
... saves time and money

management factors: outsourcing

= the hiring of other companies to complete company tasks that are essential, but not necessary to complete by the company itself

e.g., call centres, final manufacturers, advertising

companies can outsource due to ability to communicate information to the companies they hire

... saves money, especially when outsourcing is done in LICs due to lower labour costs

management factors: offshoring

= relocating a company process abroad

due to communication systems, easier transport and the ability to transfer money, lots of companies use offshoring to minimise costs

... management strategy saves money when relocating to LIC's
(e.g., lower labour costs, lower taxes, and availability of materials)

management factors examples

Large corporations ranging from Lidl to Samsung have built complicated global production networks (GPNs) as part of their global businesses. These consist of extensive outsourcing and business partnership arrangements.

US Food giant Kraft has 30,000 suppliers providing the ingredients it needs.
=> A TNC manages its GPN in the same way the captain of a team manages the assemblage of players - each with a key role.

Transport - Containerisation

= allows huge amounts of products transported
... global transpiration is now cheaper as less trips are need to transport same amount of product

e.g., HMM Algeciras
world's largest container ship
can carry 24,000 containers

Transport - Air Travel and people

revolutionised transportation of people

... faster + cheaper flights

- since deregulation of travel markets, international airlines have been able to fly without countries favouring own nationalised airlines

- flights = now affordable and attainable, times, prices and ability to book online

TECHNOLOGY also improved

... flight times are faster, more destinations available

= lowered prices and expanded plates people can travel to, allowing flow of ideas + people overseas

Transport - High speed rails

increased global flows of labour

... provide important transport between neighbouring countries, linking urban and real areas
= increased rural-urban migration
= allows flows of people internationally at cheaper + faster rates

security factors affect on globalisation - Cyber Security

cyber security is a global concern

(attacks can originate from anywhere in the world)

... technologies being developed to ensure cyber attacks can be traced no matter originating country
(developed due to globalisation)

security factors affect on globalisation - UNSC

(United Nations security council)

global systems put in place to limit disagreement and wars

= protects civilians and ensures security within countries

security factors affect on globalisation - Monitoring

use of technology has allowed security threats to be monitored + stopped

- use of CCTV, search histories, financial purchases, etc.

=> can be used to track those who are attempting to commit crimes (terror attacks)

Importance of factors

1. Transport - trade, migration, flow of products, or any form of interconnectivity through the actual transfer of people could occur without developments in transportation

2. Communication - flows of capital rely heavily on communication, as do interconnectivity and interdependence. Technology and communication have allowed expansion into global markets, flows of capital, flows of ideas and cultures (social media, skype), as well as enable the efficiency of operations to transport products

3. Finance - transfer of money and capital has led to NEE development, interdependence off economies, TNC global expansion, outsourcing and offshoring, as well as strengthened political relations through trade agreements, investment loans and bilateral aid. None of this would be possible without communication and so whilst it is important it relies heavily on communication systems to be able to work.

4. Management - TNC could not operate without management. Outsourcing and offshoring lead to interdependence and interconnectivity, expansion into foreign markets requires management and can lead to the flow of products, labour, capital (repatriation) and services. However, require communication and transport to do so.

5. Security - important to ensure that these operations work without endangering current populations but arguable that the operations can function without them, it isnt essential for the operation or transfer of goods, people, money, etc., essential for the protection of people