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Unit 3 Globalisation
- Module
- Unit 3 Globalisation
- Institution
- PEARSON (PEARSON)
Full revision notes for Unit 3 Globalisation. Includes diagrams, definitions and case studies. Can revise solely off these notes and get top grades.
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3. Globalisation3. 1. a. Definition
Globalisation involves widening and deepening global connections, interdependence and
flows (commodities, capital, information, migrants and tourists).
Globalisation increases the connectivity between countries in economic, cultural, political,
environmental and demographic ways:
- Economic: the growth of TNCs. These have a global presence; spread investment
around the world; rapid growth in world trade.
- Cultural: unifying and diversifying. People are becoming more similar (clothes, food
etc...), mostly of western origin.
- Political: spreading ideologies, global organisations (e.g. UN), dominance of western
governments in decision making; spreads the view that democratic, consumerist
societies are most successful.
- Environmental: international agreements (e.g. Paris Climate Agreement), pollution and
global warming affects the whole world and connects many countries.
- Demographic: migration and tourism increase, make populations more diverse.
Widening: connections link new places together, each time these places being further apart.
Deepening: the connections are increasing in number and becoming stronger.
Interdependence: this means that success in one country depends on the success of others.
Economic problems in one place can quickly spread to its trading partners.
Flows:
- Goods and services (commodities): have always been traded. Boost in manufactured
goods because of the low production costs (in China, Bangladesh or Vietnam for
, example)
- Capital: flows of money between people, banks, businesses and governments.
- Information: allows for goods and services to be bought at a click. Allows for real-
time communication and social networks.
- People (tourists and migrants): budget airlines allow for most people to travel. Even
though governments try to restrict migrant flows and that there are immigration
laws, record flows of people are recorded every year.
Main drivers of Globalisation
- Containerisation
- Technological advancements
- Economies of scale
- Opening up of financial markets
- Less protectionism
3. 1. b. Development in transport
- Steam power: steamboats and steam trains moved goods and armies quickly. In the
1800s Britain became the leading world power thanks to them.
- Railways: In the 1800s railway networks expanded globally, by 1904, the Trans-Siberian
Railway that connected Moscow with Japan and China.
- Jet aircraft: the Boeing 747 was introduced in the 1960s and it made international travel
more common.
- Container shipping: shipping has been described as the backbone of the global
economy since the 1950s. Intermodal containers are used to transport goods in huge
bulks. Thanks to containerisation the transport cost of ocean shipping has decreased as
goods can be transported in bulks, this lowers the goods prices and makes them more
competitive.
Time-Space Compression & The Shrinking World
Even though the physical distance between places has not changed, travel times have
decreased. This is due to the process of time-space compression.
- Time-space compression: it is an
effect of increased connectivity
as it takes less time for people,
commodities and information to
travel.
This causes the Shrinking World effect.
The friction of distance has been
reduced by the advancements in
,technology and transportation. Also, there is more widespread knowledge. That makes distant
places seem less exotic.
CS: Containerisation
Containerisation is a system of transportation in which goods are carried in large steel crates
(containers) that can each carry 25 000kg in weight. They can be easily transferred from ships
to lorries to trains. They were introduced in the 1960s and it revolutionised the trading world. It
made transporting goods cheaper and faster.
The idea was taken to the whole world and businesses embraced it as it reduced the unit cost
of international transport by 30%. They also increased speed and cut thefts and losses. They
can also be used as mobile storage rooms. With developments in information and technology,
companies can predict demand in factories or shops so they can deliver the right amount of
goods at the right time. This reduces the cost of storing stock.
Container ships have gotten bigger, enabling more efficient movement of huge cargo
quantities. The value of trade as a percentage of world GDP increased from 42.1% in 1980 to
60% in 2013. FDI increased to more than US$1.4 trillion in 2012.
One of the biggest container ships is the OOCL Hong Kong which has a capacity of more than
255 thousand tons.
3. 1. c. Developments in ICT and global communication
Developments in ICT have reduced communication costs and increased global communication
flows, since the late 20th century.
Mobile phones Have become very common since their invention in the 90s in
most, if not all, countries. People even use phones in countries
with a lack of communication infrastructure. Example: by 2015,
70% of Africa had a mobile phone.
Internet Began as a scheme funded by the US Defence Department
during the Cold War. Now about 50% of the world uses the
Internet.
Broadband and With the advent of broadband internet in the 80s and 90s,
fibre optics large amounts of data and information could be moved quickly
through cyberspace. Now, there are land-based and sub-sea
fibre optic networks that have increased the speed and volume
of data that can be moved through cyberspace. More than 1
, million km of flexible undersea cables carry the world’s data.
GIS and GPS The first GPS was launched in the 70s, now, there are 24 of
them. They broadcast position and time data to users around
the world. Deliveries can be tracked using vehicle-tracking
systems, helping the growth of global production networks to
be managed.
Social Networking Allows people to communicate instantly. The development of
social media (Facebook 2006, Instagram 2010, WhatsApp 2010)
enabled much cheaper communication between friends and
family than landline telephone.
Since 2003 Skype has allowed cheap, direct, face-to-face
communication, allowing migrants to maintain stronger bonds
with their distant family.
This has led to space-time compression, where the cost (time
or money) of communicating over distance has fallen rapidly,
so people can communicate regardless of distance.
Electronic banking Extends capital flows beyond the banking network.
Electronic banking example: Kenya’s Safaricom launched M-Pesa in 2007.
- The equivalent of ⅓ of the country’s GDP is sent through the M-Pesa system annually.
- People in towns and cities use mobile phones to pay for utility bills and school fees.
- In rural areas, the fishermen and farmers use mobile phones to check market prices.
- Women in rural areas can get micro-loans from development banks using the M-Pesa
bills as proof of having a good credit record. This helps lift families from poverty.
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