Globalisation
Globalisation is the process by which the world’s economic, political and cultural systems
become interconnected, caused by the movement of capital, labour, products, services and
information:
● Capital refers to the money that is invested around the world:
○ Foreign Direct Investment (where a country invests into another) has
increased overtime, typically with HICs investing in emerging economies to
take advantage of low production costs and expanding markets (e.g. cheaper
labour, cheaper and easier access to raw materials, reduced transportation
costs, weaker regulations and no trade barriers)
○ Improvements in technology have led to increased flows of money around the
world as it can be easily transported over the Internet (e.g. online banking).
● Labour refers to the people who participate in the workforce:
○ International migration has increased - people move countries because they
may need to, e.g. escaping conflict, or to look for a better standard of living
○ They do the jobs that people don’t want to do (e.g. working in sweatshops) or
can’t do (e.g. highly skilled jobs)
○ Some migrants are highly skilled and qualified workers who are looking for
higher wages in HICs where the demand for specialised labour is high, while
others are unskilled workers looking for improved working conditions with
better pay due to current unemployment or poor wages in an LIC
○ Bring different aspects of their culture with them - diversification
● Products refers to physical goods that are manufactured:
○ International trade of products has increased by around 8x since 1990
■ Expansion of emerging markets, such as China and India (e.g. China
is the largest exporter of manufactured goods)
■ Technology advancements that have allowed for developments in
communication and transportation
○ Manufacturing in HICs has decreased as they relocate their production aspect
to LICs where production costs are lower and regulations are weaker, and
then import the products at their lower price or export them for higher profits
● Services refer to the various economic activities that don’t involve producing physical
goods, like banking:
○ Improvements in technology, deregulation and opening up of financial
markets have allowed services to become global industries = located
anywhere and still serve the needs of customers in other countries
○ Low level services (e.g. customer service) outsourced to LICs where it is
cheaper to operate them and workforces are less skilled, and high level
services (e.g. financial service) in HICs where there are advanced
technology, skilled workers and lots of investment
● Information:
○ Rapidly spread around the world in large amounts due to the rise of
technology and the Internet, e.g. through social media or emailing - cheap
and easy communication between people (e.g. social media for leisure or
emailing for work) and companies (e.g. TNCs can easily manage overseas
operations) across the world
, Marketing
Marketing is the process of promoting and selling products or services.
● Global marketing involves using a single marketing strategy to advertise around the
world - cheaper and creates brand awareness, leading to high popularity and profits
(e.g. customers identify a name/logo with a product so are more likely to purchase it
● Advertisements can be further adapted to regional markets by getting local
knowledge of different laws and cultures - increased sales
Factors affecting globalisation
● Financial systems:
○ Based on investment banks that have developed borrowing and investing
relationships internationally between various institutions and banks
○ Communication technology and the Internet allowed different banks to easily
communicate and increased the transfer of money (e.g. buying and selling
products)
○ Allowed for more companies around the world getting involved in finance
● Improved transportation systems:
○ Fast air, sea, road and rail transport allows for easy, cheap and rapid
transport of people and goods around the world
○ E.g. containerisation benefited flows of products - standardisation of a
container that can be easily transported using various different modes of
transport all around the world to maximise efficiency and minimise costs
● Improved communication systems:
○ Advanced technology, like satellites and fibre-optic cabling, allow for near-
instant communication all around the world - cheap and easy communication
between people (e.g. social media for leisure or emailing for work) and
companies (e.g. TNCs can easily manage overseas operations) across the
world
○ Also allowed for increased flows of labour (e.g. online labour, such as working
from home), services (e.g. free online services, like social media services and
search engines), information and capital (e.g. online banking) without the
need for the physical transportation of people or goods
● Security - countries work together to improve security and deter threats:
○ Stricter rules when entering a country - international customs uses automatic
X-rays analysis to control flow of people and goods in and out of countries
(e.g. prevent people from bringing illegal and potential harmful items into a
country, like weapons and drugs)
○ Cyber security is a large threat as internet expands - technologies being
developed to track and minimise attacks because computers and digital data
are largely relied on by people, businesses and countries in general to
operate
○ Limit disagreements and wars - e.g. NATO and UN Security Council, but
some countries have fallen into conflicts over valuable resources
● Management and information systems:
○ Companies increasingly have developed global supply chains
Globalisation is the process by which the world’s economic, political and cultural systems
become interconnected, caused by the movement of capital, labour, products, services and
information:
● Capital refers to the money that is invested around the world:
○ Foreign Direct Investment (where a country invests into another) has
increased overtime, typically with HICs investing in emerging economies to
take advantage of low production costs and expanding markets (e.g. cheaper
labour, cheaper and easier access to raw materials, reduced transportation
costs, weaker regulations and no trade barriers)
○ Improvements in technology have led to increased flows of money around the
world as it can be easily transported over the Internet (e.g. online banking).
● Labour refers to the people who participate in the workforce:
○ International migration has increased - people move countries because they
may need to, e.g. escaping conflict, or to look for a better standard of living
○ They do the jobs that people don’t want to do (e.g. working in sweatshops) or
can’t do (e.g. highly skilled jobs)
○ Some migrants are highly skilled and qualified workers who are looking for
higher wages in HICs where the demand for specialised labour is high, while
others are unskilled workers looking for improved working conditions with
better pay due to current unemployment or poor wages in an LIC
○ Bring different aspects of their culture with them - diversification
● Products refers to physical goods that are manufactured:
○ International trade of products has increased by around 8x since 1990
■ Expansion of emerging markets, such as China and India (e.g. China
is the largest exporter of manufactured goods)
■ Technology advancements that have allowed for developments in
communication and transportation
○ Manufacturing in HICs has decreased as they relocate their production aspect
to LICs where production costs are lower and regulations are weaker, and
then import the products at their lower price or export them for higher profits
● Services refer to the various economic activities that don’t involve producing physical
goods, like banking:
○ Improvements in technology, deregulation and opening up of financial
markets have allowed services to become global industries = located
anywhere and still serve the needs of customers in other countries
○ Low level services (e.g. customer service) outsourced to LICs where it is
cheaper to operate them and workforces are less skilled, and high level
services (e.g. financial service) in HICs where there are advanced
technology, skilled workers and lots of investment
● Information:
○ Rapidly spread around the world in large amounts due to the rise of
technology and the Internet, e.g. through social media or emailing - cheap
and easy communication between people (e.g. social media for leisure or
emailing for work) and companies (e.g. TNCs can easily manage overseas
operations) across the world
, Marketing
Marketing is the process of promoting and selling products or services.
● Global marketing involves using a single marketing strategy to advertise around the
world - cheaper and creates brand awareness, leading to high popularity and profits
(e.g. customers identify a name/logo with a product so are more likely to purchase it
● Advertisements can be further adapted to regional markets by getting local
knowledge of different laws and cultures - increased sales
Factors affecting globalisation
● Financial systems:
○ Based on investment banks that have developed borrowing and investing
relationships internationally between various institutions and banks
○ Communication technology and the Internet allowed different banks to easily
communicate and increased the transfer of money (e.g. buying and selling
products)
○ Allowed for more companies around the world getting involved in finance
● Improved transportation systems:
○ Fast air, sea, road and rail transport allows for easy, cheap and rapid
transport of people and goods around the world
○ E.g. containerisation benefited flows of products - standardisation of a
container that can be easily transported using various different modes of
transport all around the world to maximise efficiency and minimise costs
● Improved communication systems:
○ Advanced technology, like satellites and fibre-optic cabling, allow for near-
instant communication all around the world - cheap and easy communication
between people (e.g. social media for leisure or emailing for work) and
companies (e.g. TNCs can easily manage overseas operations) across the
world
○ Also allowed for increased flows of labour (e.g. online labour, such as working
from home), services (e.g. free online services, like social media services and
search engines), information and capital (e.g. online banking) without the
need for the physical transportation of people or goods
● Security - countries work together to improve security and deter threats:
○ Stricter rules when entering a country - international customs uses automatic
X-rays analysis to control flow of people and goods in and out of countries
(e.g. prevent people from bringing illegal and potential harmful items into a
country, like weapons and drugs)
○ Cyber security is a large threat as internet expands - technologies being
developed to track and minimise attacks because computers and digital data
are largely relied on by people, businesses and countries in general to
operate
○ Limit disagreements and wars - e.g. NATO and UN Security Council, but
some countries have fallen into conflicts over valuable resources
● Management and information systems:
○ Companies increasingly have developed global supply chains
