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What did the global GDP composition by sector show in 1991?
agriculture > service > industry
What does the global GDP composition by sector show in 2019?
service > agriculture > industry
Why did people initially believe industry was the most important for an economy?
industrialization & trade
easier to boost productivity by making things more efficient
What are 2 examples of services that supported textile production?
bank insurance
legal counsel
What takes place in the 1950s-1970s as more people live in cities?
deindustrialization
Why did deindustrialization happen?
mechanization & mass production freed up labour
What are the Big Three?
Ford
General Motors
Stellantis
Where was the Big Three’s birthplace?
Detroit
What else was Detroit known as?
deindustrialization poster child
What occurred as a result of Detroit’s deindustrialization?
depopulation
Why did Detroit’s deindustrialization occur in the 1970s-1980s?
didn’t pay attention to Japan competition
What was happening to the auto industry in the 1940-1950s?
job loss
Why did auto industry job losses happen in the 1940s-1950s?
manufacturing slowed down
What happened to Detroit in 2013?
went bankrupt
Of what was Pittsburgh a prominent producer?
steel
What steel company was created in 1875?
Edgar Thompson Works
Who created Edgar Thompson Works?
Andrew Carnegie
What did Edgar Thompson Works join?
US Steel Corporation
What was the largest private company in the world in 1910?
US Steel Corporation
What did Pittsburgh experience in the 1970s-1980s?
rapidly lost steel jobs
What system rapidly grew in Pittsburgh in the 1980s-1990s?
healthcare
Why did healthcare grow in Pittsburgh in the 1980-1990s?
younger people left city, leaving older people (former industrial workers)
What became Pittsburgh’s largest employer in 1980?
healthcare
What could Pittsburgh’s 2010 healthcare system be compared to in relation to its steel industry?
1950 peak
What was the biggest difference between steel & healthcare jobs?
steel : unionized & stable & well paid
healthcare : non-unionized & precarious & not well paid
Who was usually hired in Pittsburgh’s healthcare system?
women
Why were women usually hired in Pittsburgh’s healthcare system?
made up for spouse’s lost wage
What are some examples of other service industries that have grown in Pittsburgh?
education
finance
What shape does a service economy’s returns look like?
U-shape (extremely well paid or not well paid at all)
What are some examples of global cities that rose in the 1980s?
London
New York
Tokyo
What are some examples of advanced services that grew in the 1980s?
accounting
finance
law
What decisions came to be made in global cities?
investment
production
trade
What effects did globalization have on global cities?
looked towards each other
Why did global cities look towards each other?
global economy effect > national economy effect
What is offshoring?
locating facilities out of home market to make goods & selling in home market
What is the difference between offshoring and FDI?
sale: offshoring → home market v.s. FDI → foreign market
production: offshoring → single MNE v.s. FDI → independent parties’ transactions
What is outsourcing?
purchasing goods from independent foreign supplier that could be domestically boughtW
What is the difference between offshoring and outsourcing?
corporate control: offshoring → managing facilities in foreign location v.s. offsourcing → relying on supplier in foreign location
What did the IMF do?
promoted currency stability
encouraged international capital flow
What does IMF stand for?
International Monetary Fund
What did the World Bank do?
supported Global South economic development
What were some post-war transport improvements?
radar
air travel
improved ship design
streamlined port logistics
What were some post-war communications improvements?
direct dial
teletype tech
undersea cable
transatlantic telephone cable
In what industry did offshoring start, in the 1960s?
electronics
Which country in which area was the primary manufacturing destination in the 1960s?
Japan in East Asia
What were some starting examples of consumer electronics?
radio
semiconductor
What happened in America as a result of importing large consumer electronics quantities?
protectionism
What did Japan companies do in response to America protectionism; why?
set up East Asia factories; lower wage
What did Japan companies do in Hong Kong in response to America protectionism?
took advantage of British colonial trade preferences to export to America
What did America companies do in East Asia, beginning in the mid-1960s?
offshored production
By the late 1970s, where were high tech tasks done?
developed countries
By the late 1970s, where were labour intensive tasks done?
low-wage countries
By the 1980s, what method replaced which traditional method?
global production replaced backward integration & low-wage facilities
What is global production?
production stage spread across countries
What are some global production fragilities?
custom product focus
offshore R&D = difficult
consistent tech = difficult
1 part goes wrong = everything goes wrong
splitting production stage wage = inefficient
companies prefer being close to customers
What is offshore finance?
What is the 1906 case that had international tax implications?
De Beers
Where was De Beers founded in 1888?
South Africa
Where were De Beers’ director meetings?
Britain
What happened to De Beers because it was considered a Britain resident?
liable to British tax on all income
What did the Egyptian Delta Land and Investment Company do, after being set up in London in 1904?
moved HQ to Cairo
What is offshoring finance?
moving banking out of country control to avoid tax
What is tax neutrality?
country that doesn’t levy tax/duty
What is an offshore financial centre?
country providing financial services to non-residents on disproportionate scale with domestic economy
What are cross-border banking assets?*
financial activities headquartered in developing economies
What are some offshoring finance fragilities?
lost tax revenue
Where did offshore finance infamously spark controversy in 2016, and why?
Panama; leaked docs showed wealthy figures using offshore entities to hide assets/evade tax/launder money
How can one connect offshore production & offshore finance?
accelerated post-Bretton Woods
decolonization
tech
Note 
Flashcard (46)