Globalisation and International Value Chains

Detailed practice flashcards covering definitions, historical phases, value chain models, and future trends of globalisation based on the lecture notes.

How do Bordo, Taylor, and Williamson (2003) define economic globalisation?

Globalisation is the international integration in commodity and services, capital and labour markets.

According to Klaus Schwab, what drives the phenomena of globalization?

Technology and the movement of ideas, people, and goods.

How does Richard Baldwin define globalisation?

All the things that happen when goods, ideas, people, services, and capital move from one nation to another.

What are the eight factors of globalisation identified in the lecture?

1. Political will, 2. Trade liberalisation, 3. Globalisation of investments, 4. Globalisation of industry, 5. Technological innovation, 6. Development of ICT technologies, 7. Global orientation of consumers, and 8. Globalisation of cultures.

What characterizes the '1st unbundling' of trade in the $20\text{th}$ century?

The unbundling of production and consumption, leading to the development of global trade.

What were the key events of the '1990s Hyperglobalisation' period?

$1989$: Tim Berners-Lee invented the internet and Eastern European transition began; $1991$: Collapse of the Comecon and Soviet Union; $1994$: End of GATT’s Uruguay Round; $1995$: Birth of the World Trade Organisation (WTO).

What is the 'trade-investment-services nexus' in the context of the $21\text{th}$ century '2nd unbundling'?

The flow of goods, ideas, know-how, technology, investments, and market information that connects factories and facilitates doing business abroad.

How does Timmer define a Global Value Chain (GVC)?

A final product's global value chain comprises the value added of all activities that are directly and indirectly necessary for its production.

According to Gereffi, what business activities are included in a value chain?

Manufacturing of products or creation of services, delivery, marketing, and after-sales services.

What is the primary driving force for 'North-South' International Value Chains?

Wage differences.

Provide an example of a 'North-North' International Value Chain described in the notes.

The production of the Boeing $787$, which involves components from various developed regions like Nagoya, Japan (wings), Italy (fuselage), and Gloucester, UK (landing gear).

What does the 'Smile Curve' illustrate regarding value-added in production?

It shows that value-added is highest in pre-production (R&D, Design) and post-production (Marketing, services) phases, while the actual production phase has the lowest value-added.

How did the 'Smile Curve' change from the $1970\text{s}$ to today?

The curve has deepened, with value-added for production decreasing significantly while R&D and services/marketing value-added have increased, often concentrated in developed countries.

What statistics did the McKinsey Global Institute provide for GVCs between $1995$ and $2017$?

They analyzed $23$ GVCs across $43$ countries, representing $96\text{\%}$ of global trade, $68\text{\%}$ of global workers, and $69\text{\%}$ of global production.

What are the current trends causing the slowing and changing of GVCs?

GVCs are becoming less trade-intensive, services and knowledge-intensity are increasing, labor-cost arbitrage is declining, and automation/AI are changing production inputs.

What is 'slowbalisation'?

A trend where cross-border trade slows down, global financial openness decreases, inequality rises, and people move less geographically, while international digital exchanges grow.

How does Richard Baldwin define 'telemigration'?

People sitting in one nation and working in offices in another nation.

What four digital technologies are breaking down barriers to telemigration?

1. Domestic telecommunicating, 2. On-line freelancing platforms, 3. Machine translating, and 4. Advanced telecommunication.

What are the five stages of the Apple supply chain listed in the notes?

Design and development, Sourcing, Manufacturing, Warehousing, and Distribution.

What is the future outlook for globalisation according to the summary?

It will focus more on nearshoring, reshoring, supply chain security, and services arbitrage via telemigration (things we do, not just things we make).