Development - Globalisation

Globalisation describes the increased mobility of goods, services, labour, technology and capital, as well as cultural and political systems across geographical boundaries.

Causes

• Falling transport costs
• Falling trade barriers
• Falling communication costs
• FDI
• TNCs

Characteristics

• Comparative advantage
• Global interdependence
• Global markets
• Global domination of manufacturing services by TNCs
• Global migration
• Global communication systems
• Global financial institutions e.g. World Bank
• Global environmental issues
• Global media
• Americanisation

Flows of globalsation

• Flows of capital - enabled through ICT (cheap, reliable, instantaneous, continuous)
• Flows of labour - enabled through cheaper, faster transport, can include specialist workers, refugees, unskilled workers
• Flows of products - enabled through more efficient transport, containerisation, high speed railway
• Flows of services - enabled through outsourcing and ICT
• Global marketing - enabled through brand loyalty, international marketing strategies 

Advantages of Globalisation

• Resources of different countries are used for producing goods and services they are able to do most efficiently.
• Consumers to get much wider variety of products to choose from.
• Consumers get the product they want at lower prices due to competition.
• Companies get get access to much wider markets
• It promotes understanding and goodwill among different countries.
• Businesses and investors get much wider opportunities for investment.
• New jobs available.

Disadvantages of Globalisation

• Developed countries can slow development of less developed
• Economic issues in one country can trigger adverse reaction across the globe.
• It can increase spread of communicable diseases.
• Companies face much greater competition. This can put smaller companies, at a disadvantage as they do not have resources to compete at global scale.
• Exploitation of more resources.
• Jobs may be lost through outsourcing.