Enquiry question 1: What are the causes of globalisation and why has it accelerated in recent decades?
3.1 Key idea: Globalisation is a long-standing process which has accelerated because of rapid developments in
transport, communications and businesses.
a. Globalisation involves widening and deepening global connections, interdependence and flows (commodities,
capital, information, migrants and tourists).
Globalisation definition
Globalisation is the increasing and widening of global connection, and flows such as commodities, capital,
information, people and cultures across borders. This happens with decreasing barriers. Globalisation creates a
shrinking world due to time space compression.
b. Developments in transport and trade in the 19th century (railways, telegraph, steam-ships) accelerated in the 20th
century (jet aircraft, containerisation), contributing to a ‘shrinking world’.
Developments in transport and trade
As transport developments occur, TNC’s prosper too. Connectivity allowed multiple sites of production to be
established to take advantage of cheap sites of production where wages are lower. Transport has been essential in
allowing TNC’s to establish a spatial division of labour on a global scale.
In the 19th century, there were new developments in transport for example the invention of steam ships and
railways. These developments were then further accelerated in the 20th century with the use of jet aircraft and
containerisation. This has helped transport and trade accelerate over time as there are constant new links being
created between places with greater distance apart. These contribute to the theoretical idea of a ‘shrinking world’.
This is where distant places start to feel closer and take less time to reach.
Containerisation has been a big contributor to this because as container ships have become larger, you can now get
up to 30 tonnes of commodities on a ship per hour. This means the transport of goods is quicker and more efficient.
Moreover, they can be loaded and unloaded using barcodes instead of manually. Containerisation has reduced the
cost per unit from 30% to 1%. This means that for commodities like coffee, shipping only constitutes for 1% of its
price.
c. The 21st century has been dominated by rapid development in ICT and mobile communication (mobile phones,
internet, social networking, electronic banking, fibre optics) lowering communication costs and contributing to time-
space compression.
How ICT and mobile communication accelerate globalisation
ICT has ICT and mobile communication have lowered costs and have contributed to time-space compression. This is
the process where the relationship between time and space changes. This is because the heightened connectivity
changes our perception of time, distance and potential barriers to the migration of people, goods and information.
Mobile phones – there are now more mobile phones than there are people on the planet. Mobile phones
are now changing lives for the better by connecting people and places that have traditionally faced obstacles
to connecting to the rest of the world (such as the lack of communications infrastructure).
Internet – has promoted the growth of e-tailers such as Amazon. Many people now buy online instead of a
physical shop. Quick delivery times allow Amazon to take advantage of global connections to reduce the
costs of storing large numbers in warehouses for long periods of time. Items purchased from Amazon are
usually cheaper due to bulk buying and lower operating costs – known as economies of scale. This has led to
the ’race to the bottom’ for businesses to provide ever-cheaper goods. As a result, a throw-away society
has been created where people buy more and throw away more.
, Social networking – this has been the fastest and most convenient way of connecting people. People are
able to quickly share ideas, activities and events, and instant awareness is brought by tweets and other
mediums. By 2014, 5 billion Facebook likes were being registered globally every day.
Electronic banking – this has allowed a quick flow of capital. Trillions of dollars are exchanged globally by
electronic means everyday (in payments, loans, share purchases and debt).
Fibre optics – fast fibre-optic connections allow quick exchanges of information e.g. by email. This means
that location is now longer an issue for example people can work from home and video conferences can be
made between different areas/countries. BT Superfast in Cornwall led to it being the 2nd most connected
region on earth.
3.2 Key idea: Political and economic decision making are important factors in the acceleration of globalisation.
International political and economic organisations have contributed to globalisation through the promotion of free
trade policies and foreign direct investment (FDI).
Role of international economic and political organisations in globalisation
Organisation What they do How good they are
International They create long term plans to help a Although S.A.P’s can help a country develop
Monetary Fund country’s finance. They set up S.A.P’s to loan economically, they are not always sustainable
(IMF) money to countries which are in debt to help (see below about the Ivory Coast)
them get out of debt. E.g. the Ivory Coast.
The World Trade The WTO advocates trade liberisation as Being members of the WTO has helped
Organisation they remove trade barriers, such as taxes countries exports grow as this opens up new
(WTO) and tariffs, which allow countries to trade markets. However, the WTO has failed to stop
more easily with each other. the world’s richest nations subsidising
domestic producers. This hinders trade in
developing nations.
The World Bank They provide loans for development and India’s loans from the World Bank stand at
(WB) infrastructure which attracts FDI in $104 billion. India has been able to invest in its
developing countries and reduces poverty. infrastructure helping economic growth, job
The World Bank and the IMF work very creation, higher incomes and better living
closely with each other. conditions
More on the role of the IMF in development – Structural Adjustment Packages
To receive a loan from the IMF to help a country to get out of debt, it may have to agree to a SAP (structural
adjustment package):
1. Trade liberisation – (free trade) the IMF tells countries to sell, export and import without any tariffs. This will
increase trade with that country – businesses will grow and the country will develop economically and will
therefore be able to pay back loans.
2. Privatisation – (selling off state businesses) the IMF tells countries governments to sell any business they
own to a private individual or group. This means the government will receive money from this sale which
would be used to pay off debts. Businesses would also become more competitive and profitable – thus more
tax to the government.
3. Government cuts – the IMF tells the government to spend less on services such as healthcare, education and
infrastructure. The government can therefore pay off debts quicker.
Case study: The Ivory Coast is the world’s largest producer of cocoa. In 1988, the industry was privatised in
compliance with the IMF’s SAP. As a result, farmers were under pressure to produce more cocoa and increase
exports, which intensified poverty. Government spending cuts also caused teachers’ salaries to be reduced which
caused education to decline as teachers left to seek better employment.
