PMT | Globalisation

What is globalisation?

globalisation is the process by which national economies, societies and cultures become increasingly integrated through global networks of trade, communication, transportation and immigration

What are flows?

flows are the movement of people, money, goods, services and information between countries

What are the main types of flows in globalisation?

capital flows, labour flows, product flows, service flows, information flows

What are capital flows?

capital flows are the movement of money for investment, trade or production of goods and services

What is foreign direct investment (FDI)?

FDI is investment made by a company or government into businesses or industries in another country

What are remittances?

remittances are transfers of money sent home by migrants working abroad

What are labour flows?

labour flows are movements of people between countries for employment

Why do highly skilled workers move to HICs?

highly skilled workers move to HICs for better wages and career opportunities

Why are low skilled workers vulnerable to exploitation?

low skilled workers may be underpaid or employed illegally due to weak worker protection

What are product flows?

product flows are the international movement of manufactured goods through imports and exports

Why has manufacturing shifted to developing countries?

manufacturing has shifted to developing countries because labour costs are lower

What are transaction costs?

transaction costs are costs linked to trading goods internationally, such as transport and tariffs

What are tariffs?

tariffs are taxes placed on imported goods

What is the role of the WTO?

the WTO encourages the reduction of tariffs and promotes free trade globally

What are service flows?

service flows are the movement of intangible economic activities such as banking, insurance and call centres

Why has ICT increased service flows?

ICT allows services and information to be transferred instantly worldwide

What are high level services?

high level services are highly skilled services such as finance and investment usually located in HICs

What are low level services?

low level services are less skilled services such as call centres often outsourced to developing countries

What are information flows?

information flows are the rapid movement of data, news and ideas across the world through the internet and communications technology

How has social media increased globalisation?

social media allows cultures, ideas and experiences to spread rapidly between countries

What is comparative advantage?

comparative advantage is when countries specialise in producing goods at the lowest opportunity cost

What are economies of scale?

economies of scale occur when increased production lowers the cost per unit

What is product dumping?

product dumping is selling goods abroad at a lower price than in the domestic market

What is protectionism?

protectionism is when governments use tariffs or restrictions to protect domestic industries

What is global marketing?

global marketing is marketing products on a worldwide scale to take advantage of global similarities and opportunities

What factors have accelerated globalisation?

new technologies, improved transport systems, trade agreements, global financial systems, improved communication systems

What is outsourcing?

outsourcing is when companies move production or services overseas to reduce costs

What is offshoring?

offshoring is relocating business activities to another country

What is interdependence?

interdependence is when countries rely on each other economically, politically or socially