3.1a - What is globalisation?
A process which involves widening and deepening global connections, independence and flows (of commodities, capital, info, migrants etc)
- driven by international trade and investment and aided by transport and info tech
- affects the enviro, cultures, politics and economic development
3.1a - What is some evidence to support the idea that globalisation is not a very recent phenomenon?
1870-1913 - Huge increase in GDP due to the invention of the steamship/boat
1950-1973 - Invention of aircraft lead to an increase in trade
1974-2007 - Invention of the internet lead to the connection of people
3.1a - What evidence is there for increasing interdependence?
International trade - Global trade has quadrupled since 1950/has experienced exponential increase/growth
Flows of information - Risen from 0 since 2003/ tripled since 2005 - exponential growth
FDI - ultimately increased to $1.10 trillion - highest at $3.10 tril
Migrant numbers - slight increase over the years - Europe has the highest no. international migrant numbers
3.1a - What is time-space compression?
Used to describe the decreasing space between people and ideas
Idea that the world is becoming more interconnected and is shrinking because of interconnectedness which has been caused by developments in technology
3.1b - What are the drivers of globalisation?
Transportation and communication
- Steamship - decreased 14 days to under 4 to travel from Liverpool to New York
- Railways - connected most of America/during the 19th century the world becomes interconnected due to railways
- Telegraph - first telegraph cables laid across the Atlantic in 1860s - connected people live for miles - helped connect faraway places
- No. of passengers increased to 3550mil/nearly doubled
- Average airline rev decreased to £132 in 16 years/-37%
- Jet aircraft - newer more efficient aircraft allows goods and people to be transported quickly between countries
- Containerisation - more than 200 mil container movements each year
3.1b - What is the concept of the shrinking world?
The phenomenon whereby the world appears to be getting smaller and space shrinks as a consequence of the revolution in transport and communication technologies reducing the frictional effect of distance on movement
3.1b - What is containerisation?
The global use of standardised containers to ship commodities
3.1c - What is the concept of time-space compression?
A phrase used to describe the decreasing space between people and ideas
Or
The idea that the world is becoming more interconnected and is shrinking because of interconnectedness which has been caused by developments in technology
3.1c - What are some technical drivers of globalisation (ICT)?
- Phone calls - transatlantic telephone service began in 1972 - 1 call was $75 for 3 mins - now unlimited free calls via platforms such as Skype and Whatsapp
- Since 1988 the invention of fibre optic has brought the capacity up which has lowered the cost
- Memory and hard drives have gone down from $1mil to basically $0
- Internet - approx 40% of the worlds pop has access to it
3.1c - What is enterprise resource planning (ERP) software?
- Purchasing
- Customer web portal
- CRM & sales
- Distriubtion
- Time and projects
- Dashboards
- Finance
- Manufacturing
3.2a - What are the benefits of trade blocs?
- Larger potential market
- Other business can benefit by providing raw materials
- Trade of essentials becomes more reliable
3.2a - What are the costs of trade blocs?
- Outside trading countries can be excluded/find it difficult to join
- Don’t guarantee fair treatment within
- Foreign industries and suppliers can be directly damaged as a result of competition or lack of opportunities due to trade blocs forming
3.2a - What is the IMF (International Monetary Fund)?
IMF loans money to poorer developing nations
- Key condition for recipient nations is that the country opens up its markets and industries from gov control which in turn leads to privatisation
- can be seen as more of a hindrance - LICS fall in debt- profits leave the country and potential enviro or workforce exploitation
3.2a - What is the World Bank?
WB loans money to developing nations with aim of improving development
- also seen as controversial and many critics say both these organisations don’t benefit developing countries
- Instead they promote LICs to increase their debts and limit the government’s sovereignty
3.2a - What is WTO (World Trade Organisation)?
The WTO aims to liberalise trade by removing tariffs, subsidies and quotas
- criticised as it has failed to prevent the EU and USA implementing protectionist measures eg subsidies - unsuccessful from creating equal opportunities for all countries to trade
3.2b - What are the conditions of economic liberalisation (Freedom)?
- Reduced tariffs
- Reduced quotas
- International regulatory compliance - safety standards
- WB. WTO, IMF
3.2b - What are some examples of Free Trade Areas?
- EU - Economic and Monetary Union (Ec$/CSME,Eu)
- NAFTA - US, Mexico and Canada - now called USMCA
- ASEAN - Association of southeast Asian nations
3.2b - What is free market liberalisation?
Banking + finance sectors deregulated in the UK = London as one of the world’s major financial centres
Privatisation - raised a lot of money at the time but criticised for compromising quality of services
Encouraging business start-ups - incentive (grants/tax breaks etc) to attract businesses eg Sunday trading in the UK
3.2b - Which countries are members?
Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam
3.2b - What are the main aims of ASEAN?
To increase economic growth and social progress within the southeast Asian nations and to strengthen the peaceful community
3.2b - What are the strengths and weaknesses of ASEAN?
Strengths:
- The ten members form an economic powerhouse allowing them to input in global decisions and discussions and has allowed developing countries to emerge and grow
Weakness:
- There are huge development gaps within and across countries, they tend to prioritise national interest and they are trying to match/suppress the Western approach
3.2b - Give at least one example of something concrete that they have done in the last five years and the effect that it has had
- In 2015 ASEAN established the ASEAN Economic Community which offered opportunities in the form of a huge market of US$2.6 trillion and over 622 million people.
- Effect - increased regional competitiveness and increased the flow of both people and goods through the member states
3.2c - What are Special Economic Zones (SEZ)?
SEZ - an area in a country that is subject to different economic regulations
- encourage FDI
- have relaxed/reduced = taxation, tariffs + quotas, customs and labour regulations
- 347 SEZs approved in India
3.2c - What is FDI (Foreign Direct Investment)?
FDI - an investment into a foreign firm
- several kinds, all of which involve TNCS increasing economic or industrial activity within a country
- FDI inflows to China have more than doubled from 1998 to 2018
