Goods and services are traded throughout the world.
Many people are able to live and work in the country of their choice.
There is a high level of interdependence between countries.
The US financial crisis of 2008 had an impact on many economies around the world.
Capital flows freely between many countries.
Increasingly global recognition of intellectual property.
However.....
Barriers to trade such as tariffs still exist.
Free movement of people is limited to certain areas such as the EU.
Globalisation quickly developed from the 1980's.
Reasons:
1. Reduction of international trade barriers (trade liberalisation).
1. Reduction of international trade barriers (trade liberalisation).
There have been a number of trade agreements between countries to encourage trade.
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The WTO (World Trade Organisation) encourages such agreements.
2. Political change.
In 1991 communist rule ended in the Soviet Union and the old soviet bloc of nations dissolved.
China has embraced economic reforms and welcomed foreign investment into the country.
3. Reduced cost of transport and communications.
Containerisation has revolutionised transportation.
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Air travel has also become cheaper.
http://www.spicejet.com/
The internet has allowed for the fast and cost effective transfer of data around the world.
Outsourced nursing. Details here.
4. Increased significance of transnational / multinational companies.
These companies make significant contributions to world GDP.
They are responsible for two thirds of global exports.
They spend considerable amounts on R & D.
5. Increased investment flows.
FDI spreads business activity, job creation and wealth all over the world.
FDI makes a huge contribution to globalisation.
FDI allows businesses to operate where trade barriers exist.
6. Migration
The UK has seen net migration into the UK running into hundreds of thousands per year.
How does this contribute to globalisation?
- Importation of goods from migrants home countries.
- Migrants often provide a source of low cost labour.
This could give some industries a competitive advantage.
- Some migrants are highly skilled people who can fill gaps in the labour market.
Migration can also occur within a country.
China has seen the largest movement of people from rural to urban areas in the history of the world.
7.Growth of the global labour force.
1980: global labour force was 1.7 billion.
2010: 2.9 billion.
A large number of these extra workers were from China and India.
More workers means more global demand.
Pleantiful supplies of labour keeps costs down which is good for global businesses.
8. Structural change.
A decline of traditional industries in the west has led to a huge growth in the tertiary sector.
Many of these businesses can operate anywhere in the world.
The growth of export oriented knowledge industries has also increased globalisation.
Globalisation: good or bad?
Will globalisation take your job? Details here.
