Globalisation Use this PowerPoint to complete the brainstorm on the topic of

‘Globalisation’

Key words

Globalisation means when human activities take place on a global scale

•Term first used in 1950’s•To describe the increasing interconnectedness between countries

Watch Video - http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_video.shtml

Watch Video - http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_video.shtml

Key words Interdependence when counties are linked together economically, socially, culturally and politically so that they are dependant on each otherMNCMulti National Corporation (company that operates in more than one country) sometimes called a TNC.Trade blocsis a group of countries that work together to remove barriers and improve trade between member countries

Growth What factors affect its growth?1.telecommunications - computers, internet access, email, mobile phone. 2.transport – people now holiday all over the world and businesses ship products and raw materials globally 3.Greater political cooperation e.g. the World Trade Organisation) and inter government organisation that promote free trade4.The growth of MNCs (e.g. Nike, Nokia, HSBC) These companies are the driving force of globalisation. 5.The development of trade bloc’s (e.g.)

Multinational Companies

• A multinational companies (MNC’s) are companies that operate in more than one country

• These are sometimes called Transnational Companies (TNC’s)

Casestudy - Nokia• Nokia is an MNC • Worlds largest manufacturer of mobile phones and other

devices• Employs more than 112,000 people world wide• Operates in many countries around the world• Research and development labs in 10 countries around the

world e.g. UK• Factories in 10 countries. E.g. battery manufactured in China• Raw material for mobile phones is coltan – only found in the

Congo (80%) – Australia processes the raw coltan • Plastic for mobile phone is made from crude oil – middle east

Map of Nokia’s activities

Headquaters = Finland (MEDC) Production = China and India (RICs)

Reseach and Development = UK and USA (MEDCs)

Raw material are usually source from LEDCs

Headquaters = Finland (MEDC) Production = China and India (RICs)

Reseach and Development = UK and USA (MEDCs)

Raw material are usually source from LEDCs

Advantages of being MNC’s

• Cheaper raw materials – this can mean it is cheaper to manufacture products and more profit can be made

• Cheaper wages • Relaxed environmental laws• Good transport links • Access to the market where the goods are sold• Friendly government policies which offer grants and tax

incentives

Benefits of globalisation • Investment by MNCs brings jobs and skills for local people• Bring in foreign currency • Multiplier effect on other businesses in the area• Mixing of people and cultures – sharing of ideas and lifestyles creating a vibrant

social mix. People by foods and products not previously available in their country• Migration of people can fill labour and skill shortages• Global issues - make people aware of event happening in other places around the

world e.g. people where quickly alerted of the Japan Tsunami – aid agencies like the red cross raised large sums of money to help with the crisis

• MNC can have cheaper production costs due to cheap labour in LEDCs = larger profits

• Access to foreign markets

Costs of globalisation • MNCs – profits are sent back to the country of origin • LEDCs people are exploited by MNCs as cheap labour • MNCs may drive local companies or businesses into shutting down• MNCs may operate in a way that they would not be allowed to in an MEDC (e.g.

polluting the environment, health and safety) • Threatens cultural diversity, it drowns out local cultures, traditions, and languages

– western culture is taking over• Migration across the world can cause social tensions • Works in the interest of richer countries• LEDCs are often exploited for their resources• Industry in LEDCs may thrive at the expense of jobs in MEDCs (e.g. many factories

in UK have been relocated to LEDC where costs are cheaper) – Deindustrialisation

In the exam you are likely to be asked the costs OR benefits of globalisation for an RIC

like India or China

You will need to carefully select the costs and benefits from the previous two slides. You

will also need to include an example: - Nokia, Tata and Nike

In the exam you are likely to be asked the costs OR benefits of globalisation for an RIC

like India or China

You will need to carefully select the costs and benefits from the previous two slides. You

will also need to include an example: - Nokia, Tata and Nike

Casestudy -Globalization in an MEDC

European Union - An example of a trade bloc.•Trade block is where a group of countries agree to work together to improve trade (buying and selling).•In the EU there are 28 countries, a total 500 million citizens. •Each country has to pay to be a member, the money is used to improve the way people live and do business.•The EU gets rid of the controls that stop people moving around.•Increased trade between member countries

Migration in the European UnionThere has been increased migration in the EU people moving from eastern European countries into the United Kingdom. For example •Poland joined EU in 2004•Since then half a million people have migrated to the UK •Push factors – high unemployment, low wages and housing shortages•Pull factors – big demand for trades people, speak English here ( international language), UK allowed unlimited migration

Map Of Europe

This migration has advantages and disadvantages: -

Casestudy -Globalization in RIC

• Tata is an Indian MNC. • 2007-2008 earned US$62.5 billion.• 61% of this is earned from its business outside

of India. • Employs 350,000 people worldwide.• Steel makers, car manufacturers, chemicals,

energy and hotel chains.

Tata Nano •Tata made the world’s cheapest car – the tata nano – a small car costing £1,400•The car was developed for the people living in India where incomes are much lower and as a result there is lower car ownership.•The parts for the car will be sourced from European MNCs that have factories in India•A new factory would be built to construct the cars.

Advantages and disadvantages of globalisation for India: - Advantages Disadvantages

New factory would create hundreds of semi skilled and skilled jobs

Increased car ownership could lead to congestion on roads.

Will allow families in India to afford a car – increasing car ownership in India

Increase car ownership could lead to increased exhaust emission and poor air quality in urban areas

Generate income for India as the car could be sold worldwide

Jobs created would required more skilled workers, many workers in India are farmers and do not have the skills to do these jobs

Jobs will provide skills and training Land used for the factory would be farm land, affecting farmers living in the local area

Extra casestudy - China, Nike

Casestudy -Globalization in LEDCs

World trade – General Info •Trade – buying and selling between countries. •Countries have become interdependent through trade. •Import (things coming in- bought) and export (things going out – sold).•Trade deficit – imports are larger than exports•Trade surplus – exports are larger than imports•Quotas – restrict the amount of something than can be traded.•Tariffs – are charges (taxes) that apply when you sell something

Video - http://www.bbc.co.uk/schools/gcsebitesize/geography/development/trade_video.shtmlVideo - http://www.bbc.co.uk/schools/gcsebitesize/geography/development/trade_video.shtml

Globalization - LEDC

World trade – Unfair •World trade is unfair and works in the favour of MEDCs and against LEDCs•LEDCs produce primary products (e.g. cocoa beans)•These products are bought very cheaply by MEDCs, who then process the raw material (e.g. chocolate) •The product produced by the MEDC is then sold for a much higher price•This means that the MEDCs continue to get richer. While LEDCs stay poor

Globalization - LEDCFair Trade•Fair trade means that farmers in LEDCs receive a guaranteed and fair price for their product they grow. •Fair trade sets minimum standards for the pay and conditions of workers. •This means their quality of life should improve, as well as the long-term prospects for their children.•Fair trade products sometimes cost more in supermarkets in MEDCs.•About 5 million people benefit from Fair Trade in 58 countries.•Fair trade products are becoming more widespread and include tea, coffee, sugar, chocolate and cotton.

Video - http://www.bbc.co.uk/schools/gcsebitesize/geography/development/trade_video.shtmlVideo - http://www.bbc.co.uk/schools/gcsebitesize/geography/development/trade_video.shtml