Chapter 12- The acceleration of globalisation

Define globalisation

The increasing connectedness of countries around the world through the movement of goods, services, capital and ideas across borders.

What are the main types of globalisation?

Economic, social, political and cultural

Summarise economic globalisation

Promoted through growth of TNCs
Accelerates cross border exchanges of raw materials + helps to develop global supply chains
Development of IT- connects world together

Summarise Social globalisation

Migration + extensive family networks
Improvements to education, healthcare, life expectancy + literacy rate
Increased connections- mobile phones, internet + email

Summarise political globalisation

Growth of trade blocs allows TNCs to merge + make acquisitions
Global concerns- free trade + recessions
Free trade agreements + global organisations

Summarise cultural globalisation

Western culture- dominated some places- cultural erosion
Glocalisation + hybridisation- merging + circulation of idead

Compare past and present globalisation

Past- through trade, colonialism, co-operation between countries through international organisations
Present- more about the lengthening of connections between people + places, deepening of connections, faster speed of connections

Define TNC

A company that operates in many countries producing and selling goods and services

What are the main global flows?

Capital- through world's stock market + range of businesses + exchange rates
Commodities- valuables, raw materials e.g. fossil fuels, food + minerals, flow of manufactured goods fuelled by decreased costs in China
Information- internet, real time communications
Tourists- budget airlines, brought travel to the masses
Migrants- movement of people, 2019- 270 million migrants

Summarise a case study for past globalisation

Silk roads- early form of globalisation, interlinking trade routes built from 1st century BC, linking Asia with Europe

Summarise easyJet case study

Provides cheap flights, more accessible to the masses of richer nations

Define cyberspace

Place where communication over computer networks occur

Describe intermodal containers

Units which can be transported long distances without the need for unloading

What are the main factors leading to a more interconnected world?

Internet, improvements to transport, increasing number of TNCs, internet + fibre optics

How has the internet contributed to a more interconnected world?

Vast amounts of data moved through cyberspace in shorter time- replaced letters + telegrams
Faster communications
Software e.g. Google translate- broken down communication barries

How have improvements to transport contributed to a more interconnected world?

Aircrafts e.g. easyJet- cheaper flights for the masses, ability to travel, would have been restricted to richer people from richer nations
Helps to establish trade routes + global supply chains

How has an increasing number of TNCs contributed to a more interconnected world?

Expended internationally in search of cheaper labour 
Created global supply chains

How has fibre optics contributed to a more interconnected world?

All other factors rely on this, boosts + speeds up communications, facilitated trade + e-commerce

What are some of the key improvements to transport that occurred in the 19th and 20th century

Steam power- steamships and trains moved goods quickly

Railways- networks expanded globally in 1800s, reducing journey times

Jet aircraft- made international travel easier- Boeing 747 in 1960s

Container shipping- today’s largest ships can carry 24,000 containers, supported growth of international trade and consumerism

What is the relationship between trade and transport

Transport- each new breakthrough has helped trade to grow on a geographical scale
Trade- research into transport technology- helps to build new global markets

Describe the shrinking world concept

Concept of space time compression- faster travel times + communications, feels closer together than before

When places around the world take less time to reach due to developments in technology, they start to feel closer

What is the role of ICT in globalisation?

Telephone- telegraph- communications over long distances in real time
GIS/GPS- deliveries tracked in real time
Internet + social media- connects people businesses + places
Mobile phones- allowed countries with limited communications infrastrucure to connect with others

What are the drawbacks of globalisation?

Imports of raw materials + commodities- threaten nations own industries 
Migrants- cultural exchange + religious diversity, cultural erosion
Info- provide citizens with knowledge governments find threatening

What is the role of the WTO in globalisation + evaluation

1995- took over from General Agreement on Tariffs and Trade
Promotes trade liberalisation e.g. for manufactured goods
Failed to stop the USA + EU from subsidising their own food producers which hinders farmers in LICs

What is the role of the International Monetary Fund in globalisation + evaluation

Transfer loans from HICs to countries that have applied to help
Recipients of the loan must agree to run free market economies so TNCs can locate easily
Strict conditions on governments borrowing which may result in governments spending on healthcare, education etc

What is the role of the World Bank in globalisation + evaluation

Lends money on a global scale
Gives direct grants to developing countries
Distributed US$65 billion in loans + grants
Imposes strict conditions on loans and grants
Controversially all presidents have been US citizens

SAPs- leads to government spending cut backs

What are the types of FDI?

Offshoring
Foreign mergers
Acquisitions
Transfer pricing

What is the role of national governments?

To impliment strategies such as:

Free trade blocs- allows governments to trade freely with neighbouring countries + allies, companies grow, increased access to customers, increased demand, smaller companies- merge from TNCs, decrease production costs

Government policies- free market liberalisation- lifted restrictions e.g. tariffs, decrease costs for TNCs located + operating there

Privatisation- companies take over important national services, reduces government spending, attracts TNCs

Encouraging business start ups- increase business profits by using strategies such as decreased taxes + changes in law

Special Economic Zones (SEZs)- attract TNCs in search of tax breaks + reductions, decreasing tariffs, improves profits

In what ways can national governments encourage globalisation and the growth of TNCs

Free trade blocs

Special Economic Zones

Tax incentives

Free market liberalisation

Privatisation

Business start-ups

What policies can governments implement to encourage the growth of TNCs

Free market liberalisation- lifting restrictions for companies reducing the costs for TNCs to operate and locate in these companies

Privatisation- allowing companies to take over important national services to reduce government spending, attractive as TNCs could gain stake in vital services + increase global influence

Encouraging business start- ups- aims to increase profits for businesses by using strategies e.g. low business taxes and changes in law

When was Sunday Trading introduced?

1994

What is a free trade bloc?

Allows governments to trade freely with neighbouring countries and allies

Companies grow as they gain access to more customers

Bigger market increases demand of products and services

Smaller companied can merge to form TNCs reducing production costs

What are special economic zones?

Areas (often near coasts) where favourable conditions have been created to attract TNCs

Summarise the EU

Trade bloc made between member states
Governmental organisation
Some use common currency- Euro
Shared political legislation
Member states- eligible for EU structural funds to develop their economies
Can freely trade within the group

Summarise China's open door policy

"Pre 1978- China- poor + politically isolated ""detached"" from global economy
Mainly agricultural communities in rural areas, many lived in poverty
Under communist rule- Chairman Mao Zedong
Post 1978- new policy- embrased globalisation
Farmers allowed to make profits for the first time
Opened up to FDI, remained under one authoritarian rule (one party)
Rapid urbanisation- 300 million leaving rural areas- led to increase in low wage factories in urban areas
SEZs were created- rapid influx of TNCs- led to economic growth 

Now- China- world's largest economy- still not fully open to global flows"

How has the UK attracted TNCs?

1994- introduced Sunday trading

What are the main ways of measuring globalisation?

The KOF and AT Kearney Index

Summarise the KOF Index

Annual
First- 2002
Wide range of data- early as 1970
Accounts for social, economic + environmental aspects of globalisation
Problems- only 122 countries, some indications are outdated, doesn't include environmental factors

Summarise the AT Kearney Index

Annual
First in 2008
Aims to look at how countries cope with population growth + shrinking world
Ranks according to: business activity, cultural experience + political engagement
Includes- number of TNC headquarters located there, museums + foreign investment
Only includes 156 countries (2023)

What are the limitations for TNCs when locating to host countries?

Unsuitability of some areas for production of goods e.g. accessibility + natural resources
Not enough market potential to attract large retailers due to low incomes or cultural differences

Summarise Tara and Dara

Iranian government
Made Barbie + Ken dolls which reflected Muslim culture

What is glocalisation?

Adapting products + services to suir local tastes, religion + culture, used by TNCs attempting to conquer new markets

Summarise glocalisation examples

Tara and Dara (on other flashcard)
Lego- doesn't need to glocalise as products are already universal
McDonalds- changes menu + offering according to local tastes + cultures of host countries

What are detached places?

Places where flows of trade + investment are absent, very isolated from other countries

What are some reasons for a country to be isolated?

Physical- landlocked, makes trade harder, more expensive to trade, discourages FDI, increased distance from markets

Historical- legacy of collonialism, exploited, controlled + restricted, often left with corrupt governments after gaining inderpendence

Political- isolation as government policies (North Korea), post independence weak governance

Economic- dependence on commodity industries + agriculture, poor infrastructure, high debt, unstable currencies, debt + unskilled labour

Environmental- desertification, drought, natural disasters, increased distance from markets (similar to physical)

Summarise North Korea

"""Detached from the rest of the world""
Completely isolated
Ruled by dictator- autocracy
Citizens have no access to the internet or social media- high levels of censorship
Leaders concerned about cultural erosion
183rd in KOF index"