what is the global shift?
the economic centre of gravity in the world
journey through the global shift
- Middle Eastern power (Ottoman Empire)
- European Power (slave trade, the British Empire, colonisation)
- decrease in EU power (gone bankrupt after WW1+2)
- rise in US power
- China’s Open Door Policy in 1987 and India’s Open Door Policy in 2000 led to increased Asian power in MANUFACTURING
what will the global shift be in the future?
- MINTs (Mexico, Indonesia, Nigeria and Turkey) will be on the rise
- economies like Japan and China will plateau (and either decline or boom again)
- remaining US and EU power
- increase of power for places with renewable energy resources
why is it helpful to predict global shifts?
- to know where to send FDI
why did the global shift to Asia occur?
- TNCs expressed interest in manufacturing in China
- TNCs expressed interest in outsourcing services like call centres in India
- Open Door Policies
- FDI flows into Asian countries
social benefits?
- employment opportunities
- investment in infrastructure, education, training, health and public services
- reduction of poverty (rise in middle-class incomes in China and India)
- in China, working conditions have improved due to protests
environmental benefits?
TNCs bring new equipment like rain water collection and storage (although only fixing an issue they caused)
economic benefits?
- increased tax can be paid to the government to increase public spending
- TNCs bring in equipment and management techniques that independent firms use to make their own products like the Xanoi phone in China
- Chinese Banks have become some of the largest TNCs in the world
- huge economic growth from tech companies and Indian Call centres
social costs?
- exploitation of migrant workers
- exploitation of sweatshop workers
- health problems from carcinogens
- low wages
- increased poverty and inequality
- decreased life expectancy
- trade union workers get sacked, threatened or killed
- TNCs will deny true allegations (corruption)
- farmers lose access to water from aquifers that TNCs pump from
- decreased consumer confidence, purchasing power and therefore demand for local goods (multiplier effect of local decrease in quality of life)
- protests are usually ended by armed guards as the government won’t listen (corruption) to workers as they lose out on the benefits from the TNC if they raise wages.
environmental costs?
- eutrophication and bioaccumulation
- loss of biodiversity
- land degradation
- water and air pollution
- exploitation of resources
- wasting water
- deforestation
(poor environmental governance and laws attract TNCs to locate in LICs)
economic costs?
governments and countries rely on TNCs for economic growth and stability so experience the same fluctuations as they do
what happened in Leicester in 1980 due to global shift?
de-industrialisation
what caused de-industrialisation in Leicester
- China’s Open Door Policy 1978
manufacturing businesses relocate to Asia for cheap labour
cheap foreign imports reduce demand for local products - Technological advancements
Typerwriters go out of business - Online shopping
Thomas Cook and textile shops out of business - Economic Liberalisation
(relaxed rules on who can own a business) small firms can’t compete with large companies - Economic crisis of 1970
what are the social impacts of the de-industrialization in Leicester?
- unemployment
- cycle of poverty
people can’t access food, water, and sanitation which causes malnutrition and disease so people can’t go to work or school) - high crime rates
- deprivation
largely British Indians who migrated from high-paid manufacturing jobs
Spinney Hill and Latimer are in the top 5% of England’s most deprived areas) - leaves a generation of low qualifications (skilled workers have no jobs available)
6.9% of kids have parents who don’t work
20% live of state welfare benefits
23% have 1-4 GCSEs
16% have a degree
what are the economic impacts of the de-industrialization in Leicester?
- low disposable income
decreased tax revenues, therefore government public spending decreases
decreased spending on the local economy, so secondary businesses shut down (negative multiplier effect) - derelict industrial buildings eliminate the potential for economic growth and tourism
what are the environmental impacts of the de-industrialization in Leicester?
- dereliction
brownfield sites leave polluted land from chemicals and toxic waste from factories
11% vacant industrial buildings ( need to be regenerated)
what was Leicester like during its industrial period?
from 1900-1980
one of the largest industrial cities in Europe
linked to many farms that supplied factories with raw materials
manufactured and sold leather goods, shoes, clothes, and boots, known that “Leicester clothed the world”
brands: Walkers Crisps, Bentley, Thomas Cook, Imperial Typewriter
from 1900, 6,000-29,000 employed engineers
-
switched on places9
-
globalisation (definition, types, etc)9
-
trade and transporting goods12
-
IGO's - international government organisations10
-
global shift17
-
China's Open Door Policy8
-
FDI - foreign direct investment12
-
migration (flows of people) as a result of global shift and causing hyper-urbanisation7
-
culture diffusion + glocalization5
-
Cultural erosion in Bougainville18
