GLOBAL SYSTEMS AND GLOBAL GOVERNANCE
What are the factors that have helped accelerate globalisation?
(20 marks)
Globalisation is the process where countries become increasingly interconnected because of
an increase in trade, the flow of ideas and immigration of people, bringing new cultures.
Dimensions of globalisation incorporate several dimensions e.g. culture, society, technology,
politics and the environment that connect countries together so that we all become
increasingly homogenised.
TNC’s play a huge significance in the acceleration of globalisation through FDI- foreign
direct investment and outsourcing labour. TNCs can take on manufacturing tasks at a
competitive price and shift their production side of their business abroad- specifically to
developing countries where there is a concentration of poorly paid assembly occupations and
workers with a limited skillset. Additionally, TNCs can compete for lower land and labour
costs, as well as incentives offered by governments. Apple, the biggest tech giant in the world
is an example of a TNC sourcing raw materials from LICs. Apple source their raw materials
from 748 suppliers, more than 600 are in Asia and of these, 331 suppliers are in mainland
China. Using its large-size and global presence, it can demand high quality and impose
stricter terms on its suppliers, by still maximising profit and increasing productivity.
However, this comes at a compromise in that many local manufacturing sites became
neglected because of extremely high competition between the newly emerging industrial
countries in the far East, leading to deindustrialisation and counter urbanisation because the
now unemployed workers don’t need to be near the place of work. This filtering down on
manufacturing industry from developed countries to LICs economies is known as global shift
and has affected many renowned sites like London Docklands, who initially produced 30% of
UK gross domestic product but plummeted and lost over 600,000 jobs and now the
manufacturing sector accounts for only a 1/10th of the UK’s GDP. Furthermore, FDI from
TNCs has also imposed problems in the host country of production in that several human
labour rights get exploited frequently due to a poor governance system or corrupt government
where laws don’t get regulated and monitored to enough standard.
Another factor that has accelerated globalisation is the ever-growing quaternary sector which
contributes to both technological advances and financial innovation. With information
systems having the increased ability and capacity to compute and store more data more
rapidly, it has meant trade flows can be executed securely and effectively, and easier to
manage through communicating online. TNCs and MNCs will benefit from this greatly
because they are able to expand their market and tailor it to the country’s needs- called
glocalisation. Additionally, language barriers and cross-border financial barriers can be
broken down easily as telecommunications networks have extended their capacity while more
reliable data and exchange protocols which have made it possible to connect computing
machines in more efficient ways. This accelerates globalisation since the world is becoming
more interconnected through goods and services.
Additionally, another factor that has played a significant role in accelerating globalisation is
transport. You can argue that due to advancement in technology and financial innovations, it
What are the factors that have helped accelerate globalisation?
(20 marks)
Globalisation is the process where countries become increasingly interconnected because of
an increase in trade, the flow of ideas and immigration of people, bringing new cultures.
Dimensions of globalisation incorporate several dimensions e.g. culture, society, technology,
politics and the environment that connect countries together so that we all become
increasingly homogenised.
TNC’s play a huge significance in the acceleration of globalisation through FDI- foreign
direct investment and outsourcing labour. TNCs can take on manufacturing tasks at a
competitive price and shift their production side of their business abroad- specifically to
developing countries where there is a concentration of poorly paid assembly occupations and
workers with a limited skillset. Additionally, TNCs can compete for lower land and labour
costs, as well as incentives offered by governments. Apple, the biggest tech giant in the world
is an example of a TNC sourcing raw materials from LICs. Apple source their raw materials
from 748 suppliers, more than 600 are in Asia and of these, 331 suppliers are in mainland
China. Using its large-size and global presence, it can demand high quality and impose
stricter terms on its suppliers, by still maximising profit and increasing productivity.
However, this comes at a compromise in that many local manufacturing sites became
neglected because of extremely high competition between the newly emerging industrial
countries in the far East, leading to deindustrialisation and counter urbanisation because the
now unemployed workers don’t need to be near the place of work. This filtering down on
manufacturing industry from developed countries to LICs economies is known as global shift
and has affected many renowned sites like London Docklands, who initially produced 30% of
UK gross domestic product but plummeted and lost over 600,000 jobs and now the
manufacturing sector accounts for only a 1/10th of the UK’s GDP. Furthermore, FDI from
TNCs has also imposed problems in the host country of production in that several human
labour rights get exploited frequently due to a poor governance system or corrupt government
where laws don’t get regulated and monitored to enough standard.
Another factor that has accelerated globalisation is the ever-growing quaternary sector which
contributes to both technological advances and financial innovation. With information
systems having the increased ability and capacity to compute and store more data more
rapidly, it has meant trade flows can be executed securely and effectively, and easier to
manage through communicating online. TNCs and MNCs will benefit from this greatly
because they are able to expand their market and tailor it to the country’s needs- called
glocalisation. Additionally, language barriers and cross-border financial barriers can be
broken down easily as telecommunications networks have extended their capacity while more
reliable data and exchange protocols which have made it possible to connect computing
machines in more efficient ways. This accelerates globalisation since the world is becoming
more interconnected through goods and services.
Additionally, another factor that has played a significant role in accelerating globalisation is
transport. You can argue that due to advancement in technology and financial innovations, it
