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Summary to what extent is the growth of industry dependent on globalization
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summary on globalization's impact on NIC's and how restricted they make them
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To what extent is the growth of industry in NICs dependent on G° ?NIC = a country that has not yet reached the stage of a developed country but has
outpaced its counterparts and no longer qualifies as an LEDC. It is characterized by rapid
economic growth, mostly due to exports.
Ex : China, India, Brazil
NICs are dependent on G°
- free trade = primary component of G° —> NIC economic growth due to heavy increase
in exports => no FT = no NIC
- FDI by MEDCs in LEDCs allow them to develop and become NICs (ex: helped them go
from agricultural economies to industrial economies)
- once they have a rapid economic growth they become even more attractive for foreign
investors => virtuous cycle
- use and borrow technology brought in by foreign companies to develop their own skills
NICs can also take some of the credit
- the four asian tigers (Taiwan, Singapore, HK, SK) = first NICS
- they spurred FDI arrival by offering tax incentives to TNCs (ex: Taiwan in 1960s)
- they heavily invested in infrastructure
- education in order to develop their human capital —> long term benefits
- advanced human K => leading in technological innovations => competitive advantage in
the world
- all 4 have become top level education centers
—> high-school students constantly outperform other nations in international maths and
science exams
—> have the most prestigious ranking universities
- SK according to classical liberal economic theory should have specialized in agriculture,
because that was its predominant activity, but with gvt will and investment,
- however, they also have low-labour costs, and hardly any fiscal and environmental
regulations => attract FDI but at the expense of social dvt
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NICs are in turn responsible for G°
- they are actors of FDI in LEDCs (ex: China in Africa)
- the rise in living standards and wealth in NICs mean a greater consumption by the pop°
=> become a market for TNCs and thus become actors in G°
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