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35 Cards in this Set
- Front
- Back
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NICs |
Newly Industrialised Countries Examples: India |
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HICs |
High Income Countries |
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LICs |
Low income countries |
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GNP |
Gross National Product |
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MNCs |
Multinational (Transnational) Companies |
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What is Globalisation? |
The way countries around the world are becoming more interdependent (connected). |
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Why has Globalisation taken place? |
Countries are increasingly dependent on eachother due to: -Improvements Technology and Communication -Improvements in Transport -Growth of MNCs -Political Cooperation -Trading Blocs |
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Case Study Facts: Nokia |
-52% of Nokia's employees work in the continents of Europe. -27% of employees work in China and Asia Pacific region, in manufacturing industries making Sim cards/Batteries. -Most of Nokia's sales are in Europe. -Second is the Asia Pacific region with 22% of sales. |
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Where can Nokia locate their business to minimise their costs? |
-Invest in LICs and LMICs. -Have branches in many countries to reduce costs. -Lower costs, profits are higher. -Cheap raw materials -Cheap labour supply -Good transport links -Access to market -Friendly government policies. |
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What are the benefits of Globalisation? |
The Multiplier Effect (snowballing effect) The introduction of one industry, e.g. new factory, will attract other types of insdustry linked to it. New jobs are created in two ways: -Direct Benefit created directly by the MNC e.g. working for MNC. -Indirect Benefit created by being close to MNC e.g. local cafe benefits by more customers at lunch time. |
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Impact of Globalisation on HICs |
-90% of MNCs have their headquaters in the developed world.The profits go into the pockets of their shareholders. -Large swatches of industry in HICs have been lost to overseas markets, due to cheaper wages. |
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Impact of Globalisation on LICs |
-MNCs have changed working patterns towards more shift workers, and short term contracts, as a result of this employees do not form relationships in their careers, they have jobs not careers. -MNCs invest in the economies of developing countries and can help raise living standards. -Because MNCs can avoid paying full taxes in countries where they operate, this effects the services governments are able to provide for local people- in this way MNCs to little to help LICs develop. |
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Advantages of Globalisation |
-MNCs seem to be central to economic growth in today's world. Foreign Direct Investment has helped China overtake the UK and France to become the world's fourth biggest economy. -MNCs are responsible for the transfer of technology from developed to developing nations. -MNCs can be seen as architects of Globalisation, they build bridges between nations. -The + multiplier effect means that presence of MNCs improves infrastructure. |
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Disadvantages of Globalisation |
-The products of MNCs are consumed almost every country on Earth.This erodes local diversity and homogenises (uniforms) our tastes and cultures. -Outsourcing means that MNCs exploit cheap labour. As a result local workers are paid badly. -Profits don't generally remain within the country in which goods are manufactured. -MNCs encourage capital to move in and our of countries very quickly. |
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Social and Economic Impacts of Enlargement of the EU-Polish Migration to the UK |
Poland joined the EU in 2004 which allowed free movement between EU countries. |
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Push Factors from Poland |
-Unemployment in Poland was close to 20% in 2004, compared to 5% over the same period in the UK. -The fact that the majority of polish migrants are working age, suggests that people are coming to the UK to work. |
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Pull Factors to the UK |
-The minimum wage in UK is twice as high as average earnings in Poland. -If Polish workers were to save 20% of this income, it would add up to about £50 per week. -Many poles have migrated to the UK to be with family or to study. |
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+ Social Impacts of Polish migration |
-Ethnic diversity within the UK. -Migrants pay national insurance adn council tax, therefore contribute to the local services and the welfare state. -Increase in Church attendance which was decreasing. |
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- Social Impacts of Polish migration |
-Segregation, language barriers, and suspicion between local and migrant population. -Conflict between local communities and Polish migrants. |
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+ Economic Impacts of Polish migration |
-Source of cheap labour witha strong work ethic. -Workers kept wage inflation down. -Increased economic output 0.5-1% of GNP in 2006. |
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- Economic Impacts of Polish migration |
-Remittances, money sent home to poland, looses money from British economy (£1 billion). -Wages pushed down in low skilled jobs created competition with UK jobs. |
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Effects of Globalisation on NICs: TATA in India (Background Information) |
-Employs 350,000 people worldwide. -Own a number a number of businesses including, steel, car, chemical, energy companies and hotel chains. -In the UK employs 47,000 people (e.g. some at Port Talbot Steel works) -Famous brand names- Jaguar, Land Rover and Tetley tea. |
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The Nano Car (global car) |
- Steel for the body parts will be supplied from Tata and Ispat, both INDIAN companies. -Seatbelts are supplied by Autoliv which is a Swedish company. -The windscreen is supplied by French company Saint-Gobain Sekurit. -German company Bosch supplies the computer that controls the engine. |
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MNC - Coca Cola - A foreign MNC investing in India- Advantages |
-Job opportunities - Positive Multiplier Effect (snowball effect) have money to spend in local shops. -Improved infrastruture (invest in better roads) |
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MNC - Coca Cola - A foreign MNC investing in India- Disadvantages
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-Pesticide residue left in water. -Destroys harvests for local people. -All clean drinking water used up in factories. -0.5 billion litres of water each year used up in one factory. -Contract worker up to 12 hours -50c-1$ for 12 hours work. |
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The Effects of Globalisation on LICs- Case Study- Trade in Ghana |
-Ghana sells primary commodities e.g. cocoa beans (low price) -UK sells manufactured goods e.g. chocolate, tables (higher price) -This means the balance of trade is not fair- Ghana-Imports > Exports= Trade deficit UK- Imports < Exports= Trade Surplus |
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Trade deficit |
Value of Imports greater, than value of exports |
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Trade Surplus |
Value of Exports greater than value of imports |
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Trade Balance |
Value of Exports equal to value of imports |
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What is Free Trade? |
When there is no barrier in place to make trade difficult. WTO (World Trade Organisation) can check trade is happening smoothly. Trade barriers are put in place to protect businesses in own country. |
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Examples of Trade Barriers |
- Tariffs (tax)- trade goods are more expensive. -Quotas- Limit on the amount of goods traded. -Embargos- Stops trade completely. |
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What are Trading Blocs? |
Countries that group together to protect their trade. e.g. No tariffs paid for countries in EU, but tariffs for countries outside the EU. |
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Examples of Trading Blocs |
EU-28 Countries APEC-21 Countries (Asia Pacific Economic Co-operation) G20-19 Countries |
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What is Fairtrade? |
Fairtrade is an organisation set up by farmers in LICs that will allow them to gain a fair price for their products and working conditions. |
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How do LICs benefit from Fairtrade? |
- Helps producers diversify, from markets where there is over production. -Raises awareness of development issues. -Trade co-operatives organise people benefiting health and community. -Guaranteed social premium means the poorest people have improved living standards. |
