Globalisation
Enquiry Question 1 - What are the causes of globalisation and why has it accelerated
in recent decades?
Globalisation = The process of increasing interconnectivity
between distant place through the lengthening and deepening
of flows as well as increasing movements of capital, goods and
services
Types:
1. Economic globalisation: TNCs + spread of investment
2. Cultural globalisation: Similar foods, clothes, music,
values
3. Political globalisation: Spreading ideologies and the
dominance of western democracies
4. Environmental globalisation: Agreements to reduce
pollution which affects other countries
5. Social/ demographic: Increasing migration and tourism
- Widening and deepening of global connections
- Increasing interdependence: April 2011 staff at Honda factory
in Swindon worked for only days a week due to shortage of
parts following the Japanese tsunami, German DAX lost 1.2%
within minutes after the tsunami as well
- Increase in flows
→ Goods and services
→ Capital
→ Information
→ Migrants
→ Tourists
3.1 Globalisation is a Transport technology and globalisation → growth in trade
long-standing process 1) 19th century
which has accelerated - Railway/ steam trains (invented in 1802 and 1830s public
because of rapid railways in Liverpool and Manchester)
developments in - Telegraph (the Trans-Atlantic telegraph cable in 1860s
transport, replaces a 3 week boar journey with instant morse code
communications and messages)
businesses - Steam ship (1840s, replaced sailing ships and increased
speed and cargo capacity)
2) 20th century
- Jet aircraft (Boeing 747 ‘jumbo jet’ in the 1960s lowered cost
of international air travel)
- Containerisation
Containerisation = The standardisation of the dimensions of a
container ship to increase carrying capacity
1. Standardisation of containers reduces time taken to load and
unload goods
2. Crates can easily load and unload goods rather than labour
3. Costs of transportation is reduced
4. Volume of trade of goods increases
- By 1970 30 tonnes per hour could leave the ports the
same day
- Transport costs of moving an iphone or television from
China to UK are less than £1
,The shrinking world
- Physical distance between places are unchanged but new
technologies reduce the time taken to transport goods/ people/
communicate in formation
→ More knowledge + tech = a shrinking world (Global Village)
–
- Doreen Massey and the crumpling world → some
places become more isolated because of improved
technology like the Pitcairn Islands in the middle of the
Pacific, increase in air travel so shipping gone to
decline
- “Is not simply shrinking - it’s more like it is crumpling in
all kinds of uneven and unequal ways” - Massey
21st century advances in Communication Technology
- ICT (Information Communication Technology)
developments have reduced communication costs and
increased global communication flow in late 20th
century
1. Mobile phones
- Invented in 1984
- Smart phones, smart watches, smart tablets in 2000s
- By 2015, 70% of people in Africa owned a mobile
phone
2. Internet
- Invented in 1983
- Almost 50% of the world uses it
- Broadband internet in 1980s and 90s meant that large
amounts of data could be moved quickly through
cyberspace
3. Social networks
- Skype, facebook, whatsapp, zoom, teams
- In 2014, 5 billion Facebook ‘likes’ were registered each
day
- Facebook invented in 2006
- Instagram invented in 2010
- Whatsapp invented in 2010
- Enabled space-time compression where costs of
communication over distance has fallen sharply
- SInce 2003 Skype allowed face=time allowing migrants
to maintain stronger bonds with family
4. Economic banking
- Keep in touch with all parts of production, supply and
sales network
- Transfer money and remittances instantly
- Instantly analyse data on sales from anywhere within
business
Brief case study - Kenya:
- ⅓ of GDP is sent through M-Pesa system annually
(type of mobile service that allows credit to be directly
transferred between phone users)
- Utility bills and school fees paid for using phone
- In rural areas fishermen and farmers use phones to
check market price before selling
, - Women in rural areas can secure micro-loans using
M-Pesa as proof they have good credit record
- In-store barcode recording automatically orders a
replacement from distant supplier
- E-banking for transmitting remittances
5. Fibre-optic cables
- Invented in 1965
- Increase speed and volume of data transmission
through cyberspace
- More than 1 million km of flexible undersea cables carry
the world’s data
- Global Positioning System (GPS) uses broadcasting
satellites as beacons to triangulate information
- Delivery vehicles can continuously locate and transmit
position whilst satellite navigation (SATNAV) systems
reduce costs from vehicles getting lost
- Satellite-based TV has meant popular channels are
available worldwide in many languages
IGOS → promote free trade policies and FDI
1. World Trade
- Growth in export trade after 2002
- Dip in trade in 2008-2009 due to Global Financial Crisis
- Returned to ‘normal’ levels in 2011 but growth has been slow
ever since
- SInce 2014 there is US$19 trillion world trade in goods
compared to less than $1 trillion in early 1970s
- Protectionism: countries protecting their own industries and
businesses e.g North korea
1) Tariffs on imported goods
2) Quotas to limit volume of imports
3) Banning foreign firms from operating in services in
banking, retail and insurance
4) Restricting or banning foreign companies from investing
in their country
2. Bretton Woods Institutions (WB, WTO, IMF) →
rebuild the world economy after WW2 + promote free
trade
World Bank (previously the International Bank for
Reconstruction and Development)
- Created 1944
- Finances economic development
- In 2014 it gave US$470 million to Philippines for poverty
reduction programme and a $70 million grant to DRC
for Inga 3 mega-dam HEP project
- Requires countries to adopt SAPs and to reduce
government budget deficits
- Some countries prefer to borrow from China or the
Chinese-led Asian Infrastructure Investment Bank
which doesn’t impose such restrictions e.g 2010 China
loaned $110 billion
- CRITICISED → putting economic development before
social development
International Monetary Fund (IMF)
, - Created 1944
- Aims to maintain a stable financial system and this
promotes free trade and globalisation
- Lends funds for development and to ensure financial
stability e.g Greece in 2008 received loans from the
Troika
- Recipients must adopt SAP and trade liberalisation
programmes
- CRITICISED → promoting a ‘western’ model of
economic development and works in the interests of
developed countries and their TNCs
→ Promote globalisation because:
1) WB and IMF increase interdependencies between
countries
2) SAPs:
1. Cut subsidies to farmers
2. Pursue privatisation
3. Reduce capital controls
– are examples of neo-liberalism and freedom
from government as it allows of free trade
CRITICISED → building too much dependence on loaning
countries, increases debt, reduces government sovereignty,
exploitation of workers, profits leave the country
World Trade Organisation (WTO)
- Created in 1995
- Using trade to generate economic wealth in poorer
region
- Replaced the GATT (General Trade Agreement on
Tariffs and Trade) 1948, became WTO in 1995
- A series of global agreements that gradually reduced
trade barriers and increased free trade
- CRITICISED → Failed to prevent EU and USA from
implementing protectionist policies like tariffs, failed to
give equal opportunities for all countries to trade, Doha
2001 created gridlock as countries wouldn’t reduce
tariffs on agricultural products
FDI = The financial capital flow from one country to another for
the purpose of constructing physical capital i.e building a
factory in another country
3.2 Political and National governments
economic decision 1) By joining/ promoting free trade blocs
making are important Free trade bloc = An agreement between a group of countries
factors in the to remove all barriers to trade e.g tariffs and quotas
acceleration of → Encourage specialisation (countries who specialise have a
globalisation comparative advantage as they can produce goods at the
lowest cost and trade for other countries specialisms)
→ Encourage specialisation (firms producing a country’s
specialisation become TNCs as they sell outputs through the
bloc)
- CRITICISMS → trade distortion, short term
unemployment (industries with no comparative
advantage shut down), cultural erosion, sovereignty
loss
Enquiry Question 1 - What are the causes of globalisation and why has it accelerated
in recent decades?
Globalisation = The process of increasing interconnectivity
between distant place through the lengthening and deepening
of flows as well as increasing movements of capital, goods and
services
Types:
1. Economic globalisation: TNCs + spread of investment
2. Cultural globalisation: Similar foods, clothes, music,
values
3. Political globalisation: Spreading ideologies and the
dominance of western democracies
4. Environmental globalisation: Agreements to reduce
pollution which affects other countries
5. Social/ demographic: Increasing migration and tourism
- Widening and deepening of global connections
- Increasing interdependence: April 2011 staff at Honda factory
in Swindon worked for only days a week due to shortage of
parts following the Japanese tsunami, German DAX lost 1.2%
within minutes after the tsunami as well
- Increase in flows
→ Goods and services
→ Capital
→ Information
→ Migrants
→ Tourists
3.1 Globalisation is a Transport technology and globalisation → growth in trade
long-standing process 1) 19th century
which has accelerated - Railway/ steam trains (invented in 1802 and 1830s public
because of rapid railways in Liverpool and Manchester)
developments in - Telegraph (the Trans-Atlantic telegraph cable in 1860s
transport, replaces a 3 week boar journey with instant morse code
communications and messages)
businesses - Steam ship (1840s, replaced sailing ships and increased
speed and cargo capacity)
2) 20th century
- Jet aircraft (Boeing 747 ‘jumbo jet’ in the 1960s lowered cost
of international air travel)
- Containerisation
Containerisation = The standardisation of the dimensions of a
container ship to increase carrying capacity
1. Standardisation of containers reduces time taken to load and
unload goods
2. Crates can easily load and unload goods rather than labour
3. Costs of transportation is reduced
4. Volume of trade of goods increases
- By 1970 30 tonnes per hour could leave the ports the
same day
- Transport costs of moving an iphone or television from
China to UK are less than £1
,The shrinking world
- Physical distance between places are unchanged but new
technologies reduce the time taken to transport goods/ people/
communicate in formation
→ More knowledge + tech = a shrinking world (Global Village)
–
- Doreen Massey and the crumpling world → some
places become more isolated because of improved
technology like the Pitcairn Islands in the middle of the
Pacific, increase in air travel so shipping gone to
decline
- “Is not simply shrinking - it’s more like it is crumpling in
all kinds of uneven and unequal ways” - Massey
21st century advances in Communication Technology
- ICT (Information Communication Technology)
developments have reduced communication costs and
increased global communication flow in late 20th
century
1. Mobile phones
- Invented in 1984
- Smart phones, smart watches, smart tablets in 2000s
- By 2015, 70% of people in Africa owned a mobile
phone
2. Internet
- Invented in 1983
- Almost 50% of the world uses it
- Broadband internet in 1980s and 90s meant that large
amounts of data could be moved quickly through
cyberspace
3. Social networks
- Skype, facebook, whatsapp, zoom, teams
- In 2014, 5 billion Facebook ‘likes’ were registered each
day
- Facebook invented in 2006
- Instagram invented in 2010
- Whatsapp invented in 2010
- Enabled space-time compression where costs of
communication over distance has fallen sharply
- SInce 2003 Skype allowed face=time allowing migrants
to maintain stronger bonds with family
4. Economic banking
- Keep in touch with all parts of production, supply and
sales network
- Transfer money and remittances instantly
- Instantly analyse data on sales from anywhere within
business
Brief case study - Kenya:
- ⅓ of GDP is sent through M-Pesa system annually
(type of mobile service that allows credit to be directly
transferred between phone users)
- Utility bills and school fees paid for using phone
- In rural areas fishermen and farmers use phones to
check market price before selling
, - Women in rural areas can secure micro-loans using
M-Pesa as proof they have good credit record
- In-store barcode recording automatically orders a
replacement from distant supplier
- E-banking for transmitting remittances
5. Fibre-optic cables
- Invented in 1965
- Increase speed and volume of data transmission
through cyberspace
- More than 1 million km of flexible undersea cables carry
the world’s data
- Global Positioning System (GPS) uses broadcasting
satellites as beacons to triangulate information
- Delivery vehicles can continuously locate and transmit
position whilst satellite navigation (SATNAV) systems
reduce costs from vehicles getting lost
- Satellite-based TV has meant popular channels are
available worldwide in many languages
IGOS → promote free trade policies and FDI
1. World Trade
- Growth in export trade after 2002
- Dip in trade in 2008-2009 due to Global Financial Crisis
- Returned to ‘normal’ levels in 2011 but growth has been slow
ever since
- SInce 2014 there is US$19 trillion world trade in goods
compared to less than $1 trillion in early 1970s
- Protectionism: countries protecting their own industries and
businesses e.g North korea
1) Tariffs on imported goods
2) Quotas to limit volume of imports
3) Banning foreign firms from operating in services in
banking, retail and insurance
4) Restricting or banning foreign companies from investing
in their country
2. Bretton Woods Institutions (WB, WTO, IMF) →
rebuild the world economy after WW2 + promote free
trade
World Bank (previously the International Bank for
Reconstruction and Development)
- Created 1944
- Finances economic development
- In 2014 it gave US$470 million to Philippines for poverty
reduction programme and a $70 million grant to DRC
for Inga 3 mega-dam HEP project
- Requires countries to adopt SAPs and to reduce
government budget deficits
- Some countries prefer to borrow from China or the
Chinese-led Asian Infrastructure Investment Bank
which doesn’t impose such restrictions e.g 2010 China
loaned $110 billion
- CRITICISED → putting economic development before
social development
International Monetary Fund (IMF)
, - Created 1944
- Aims to maintain a stable financial system and this
promotes free trade and globalisation
- Lends funds for development and to ensure financial
stability e.g Greece in 2008 received loans from the
Troika
- Recipients must adopt SAP and trade liberalisation
programmes
- CRITICISED → promoting a ‘western’ model of
economic development and works in the interests of
developed countries and their TNCs
→ Promote globalisation because:
1) WB and IMF increase interdependencies between
countries
2) SAPs:
1. Cut subsidies to farmers
2. Pursue privatisation
3. Reduce capital controls
– are examples of neo-liberalism and freedom
from government as it allows of free trade
CRITICISED → building too much dependence on loaning
countries, increases debt, reduces government sovereignty,
exploitation of workers, profits leave the country
World Trade Organisation (WTO)
- Created in 1995
- Using trade to generate economic wealth in poorer
region
- Replaced the GATT (General Trade Agreement on
Tariffs and Trade) 1948, became WTO in 1995
- A series of global agreements that gradually reduced
trade barriers and increased free trade
- CRITICISED → Failed to prevent EU and USA from
implementing protectionist policies like tariffs, failed to
give equal opportunities for all countries to trade, Doha
2001 created gridlock as countries wouldn’t reduce
tariffs on agricultural products
FDI = The financial capital flow from one country to another for
the purpose of constructing physical capital i.e building a
factory in another country
3.2 Political and National governments
economic decision 1) By joining/ promoting free trade blocs
making are important Free trade bloc = An agreement between a group of countries
factors in the to remove all barriers to trade e.g tariffs and quotas
acceleration of → Encourage specialisation (countries who specialise have a
globalisation comparative advantage as they can produce goods at the
lowest cost and trade for other countries specialisms)
→ Encourage specialisation (firms producing a country’s
specialisation become TNCs as they sell outputs through the
bloc)
- CRITICISMS → trade distortion, short term
unemployment (industries with no comparative
advantage shut down), cultural erosion, sovereignty
loss
