Unit 4: Power, places and networks
Globalization The growing interdependence of countries worldwide through the
increasing volume and variety of cross-border transactions in goods
and services and of international capital flows (and through the more
rapid and widespread diffusion of capital)
Internationalism The extension of economic activities across national boundaries.
This is often referred to as the stage before globalization.
Glocalisation When TNCs adapt their products to suit the local market place (ex:
McDonald in India won't sell beef and in the Middle East they won't sell
pork because of the religious beliefs of locals)
Grobalisation The imperialistic ambitions of nations, corporations and organisations
to impose themselves on various geographic areas.
Global Village How the world has been contracted into a village by electric
technology.
Homogenisation The process of everything becoming the same/similar. Critics of
globalisation say that globalisation is making the world more
homogenised.
Cultural The increased variety of different cultures from around the world e.g.
Diversity different foods, music, film, etc.
Disneyfication, The spread of western culture. Various TNC names have been used to
Mcdonaldisation, describe the process of globalisation and that particular company taking
Toyotarisation, over a large share of the global market place.
Westernisation
Anti-capitalism A broad term that is given to any challenge to capitalism.
Nationalism Refers to an ideology, a sentiment, a form of culture, or a social
movement that focuses on the nation.
Superpower Can influence policy on a worldwide scale and often in different
countries regions at the same time.
Foreign direct The investment by a company into the structures, equipment or
investment organizations of a foreign country. It does not include investment in
shares of companies of other cultures
Offshoring The process by which firms move production overseas
Outsourcing When a firm obtains inputs such as skills and services from separately
owned suppliers instead of sourcing them internally
,4.1: Global interactions and global power
Components of globalization:
1. Economic: TNCs, global products, trading blocks and money flows
2. Urban: City inhabitants are more exposed to foreingn culture → global cities (London)
3. Social/cultural: Spread of food, clothes, products, film, music, religion, sports
4. Linguistic
5. Political: Growth of political ideologies (ex: Capitalism and democracy)
6. Demographic: more migrants and tourists → more inter-racial marriages
7. Environmental degradation: Acid rain, hole in ozone layer, biodiversity loss, …
What has made globalization possible:
1. Transport improvements (air travel, ships, trains, cars, motorwayds)
2. Communication imorovements (social media, 4G, internet, e-mail, post, phones)
Global governance attempts to regulate global systems, which are organizations, groupings,
or organizations that link different parts of the world
Measuring globalization
AT Kearney index: Chicago-based management consultancy firm
● Explores the relationships between a country's global integration and its levels of
public education spending, political freedom, perceived corruption, and
susceptibility to terrorism
● Shown as a divided bar graph, showing the relative globalisation of different
components (such as personal, economical, technological, political, etc).
, ● Calculation method:
○ Lowest value is 0, highest value is 1
○ FDI, Internet, and Telephone traffic is weighted double
○ All scores are then summarized
● Advantages:
○ Covers 96% of world GDP
○ Covers 84% of world population
○ Allows for comparison between countries
○ Allows for comparison over time
○ Show each data category in a frequency distribution
○ Display relative numbers/proportions of multiple categories
○ Summarize a large amount of data in a visual, easily interpretable form
○ Make trends easier to highlight than tables do
○ Estimates can be made quickly and accurately
○ Permit visual guidance on accuracy and reasonableness of calculations
○ Accessible to a wide audience
● Disadvantages:
○ Only 64 countries are included
○ Weightings may not be realistic
○ Cultural trends are hard to measure
○ Smaller countries tend to take the top places due to the importance of FDI
■ Over-importance of the size of the country
○ Often require additional explanation
○ Fail to expose key assumptions, causes, impacts and patterns
○ Can be easily manipulated to give false impressions
The KOF index: Made by a Swiss economic think thank, KOF
● Measures 3 main dimensions of globalization: Economic, social, and political
● On scale of 1-100: Higher values denote greater globalization
○ Economic globalization: Long-distance flows of goods, capital and
services, as well as information and perceptions that accompany market
exchanges (this accounts for 36% of the globalization index)
■ Economic flows and restriction to trade and capital
○ Political globalization: A diffusion of government policies (this accounts for
26% of the globalization index)
■ # of embassies and high commissions, # of international organizations in
country and memberships, UN peace missions
○ Social globalization: The spread of ideas, information, images and people
(this accounts for the remaining 38% of the globalization index)
■ Personal contacts: Telecom traffic, government and workers’ transfers
(ex: remittances and FDI) received and paid
■ Information flows: # of internet uses, cable television subscribers,
radios, newspapers
■ Cultural proximity: Dominance of US cultural products
, ● Advantages:
○ Variations in data are prevented from impacting the overall value because of the
use of principal components analysis to determine the weighting of sub-indices
○ Comparing degree and changes in globalization over lots of countries and years
○ Uses 24 different variables
● Criticism:
○ Measures like international letters per capita are very outdated
○ True size of their informal economy (black market)
○ Measuring foreign populations can be hard because of inaccurate record keeping
and illegal immigrants
○ It is hard to calculate the true number of internet users
○ Some countries are small and don't have many embassies and instead rely on
embassies and consulates in neighbouring countries (ex: Monaco in France)
○ Some countries choose to stay neutral (ex: Switzerland)
○ Some countries have a large number of domestic tourists
Most globalized countries are Hong Kong, Singapore, Netherlands, Belgium
● Small HICs are towards top
● Large rich countries (france and Germany) towards middle
● Very large HICs (USA) are at the bottom
● LICs towards bottom
Since 2008 (financial crisis), globalization is slowing down
Global superpowers
Core:
● Nations dominating the world and having a dominant economic relationship with the
semi-periphery and periphery nations
● Strong militaries and are not dependent on any other country for support or aid
● Powerful, allowing them to exploit other nations for low-priced raw goods.
Periphery:
● Less developed and receive a disproportionately small global wealth share
● Lack a strong central government and state institutions and may be controlled by
other states
● Unstable governments, poor education, lack of health care systems, and lack of
technology, wars, plagues
● Low skill, labor-intensive production and are exploited by core countries
● Specialize in 1 industry (unstavke and limit FDI)
● Depend on core countries for capital and export raw materials to them
→ Dependency theory: Resources flow from poor to rich countries: enriches the rich
