Globalisation
http://www.youtube.com/watch?v=3oTLyPPrZE4&safe=active
Globalisation and the growth of the global economy have led to huge
changes in the pattern of employment around the world. As countries
develop, so the type of work available and the working conditions change.
Trade and financial direct investment fuel the growth of the global
economy, along with the activities of the key players, the Trans National
corporations.
You need to know:
• 3.1 How does the economy of the globalised
world function in different places?
• 3.2 What changes have taken place in the
flow of goods and capital?
Key terms:
Key term
Definition
Automation
The use of machinery rather than people, in manufacturing and
data processing
Deindustrialisation
Factories closing down in the 1980’s
Employment
Structure
The proportion of people working in each of the primary, secondary
and tertiary sector
Flows
A system of linkages between objects, places or individuals
Foreign direct
Investment
a direct investment into production or business in a country by an
individual or company of another country.
Global Economy
The international spread of goods and services, especially in recent
decades, across national boundaries and with minimal restrictions
by governments.
Global Shift
Cross border i0nteractions between nations, businesses and people
Globalisation
The movement of objects, people and ideas between places.
Industrialisation
Where a mainly agricultural society changes and begins to depend
on manufacturing industries instead.
Key term
Definition
Informal Sector
Forms of employment that are not officially recognised e.g.
People working for themselves on the streets of developing cities.
International
Monetary Fund
A US based organisation that raises funds from the worlds
wealthier countries, to help countries which become
economically unstable like Greece.
Merger
When one country takes over another one
Networks
Expanding travel networks communication technologies easily
connect manufactures and overseas buyers
Newly Industrialised
Countries
Like China, India and Brazil
Outsourcing
A process in which a company subcontracts part of its business to
another company
Players
Individuals and groups who are interested in and affected by a
decision making process
Primary sector
People extract raw material from the land or sea e.g. farming
Key term
Definition
Quaternary Sector
Provide information and expert help e.g. IT
Secondary Sector
People are involved in manufacturing e.g. house building
sweatshops
A factory where workers are expected to work very long hours, with
low pay and poor working conditions.
Teleworking
Also called: telecommuting the use of home computers,
telephones, etc, to enable a person to work from home while
maintaining contact with colleagues, customers, or a central office.
Tertiary Sector
provide a services e.g. selling goods or nursing
TNC’s
Trans National Corporations - a giant company operating in many
countries
WTO
World Trade Organisation
Key Idea 1: Why are there changing employment structure in countries at
different stages of development. The Clarke Fisher Employment Structure
Model
Globally LEDC’s such as Nigeria and Kenya have high amounts of primary industries due to the fact that
there is a lack of education and they are mainly subsidence farmers. MEDC's such as UK and USA tend
to focus on Tertiary activities due to higher education rates and tertiary jobs are higher paid. Primary
is low due to the fact that most MEDC’s have taken to importing food stuffs etc as it is cheaper.
Tertiary services
support and promote
quaternary services
Economies start to develop
and incomes rise = demand
for manufactured goods
increase = secondary
industry grows
Incomes continue to rise,
people start to consume
more services = tertiary
sector grows
In the pre-industrial stage
low-income countries are
mainly employed in
primary production,
middle income countries
are focused on secondary
industries and finally highincome countries are
dominated by the tertiary
sector.
This model tell us how
employment changes over
time and how the balance
of employment changes as
a country develops.
However it does assume
that there is a simple
straight development path
from LEDC’s to MEDC’s.
Named example 1 - Contrast working conditions in different
countries - Ghana
https://www.youtube.com/watch?v=5EHS_hFpR8E - Watch this to help you
understand this.
Named example 1 - Ghana
What are working conditions like?
Ghana is a pre industrial
economy
The percentages of each
employment sector are:
Primary 50%
Secondary 16%
Tertiary 33%
What are Ghana’s biggest
exports and why do they not
earn much from these exports?
Cocoa, Diamonds, timber and
flowers are Ghana's main exports
–but these are often raw
materials and not the more
expensive finished manufactured
products.
What jobs do people do?
Many people are still
employed on small scale farms
in agriculture ( subsistence
farming).
There is little commercial
farming - mainly growing
Cocoa a major export crop.
The secondary sector is small
and jobs are mainly filled by
men.
Many people are also still
employed in Informal jobs which means that they are not
formally recognised and
therefore employees do not
pay any taxes
Working conditions are tough
particularly on the farms where the
work is often hard manual labour
because there has been a lack of
mechanisation and there are often
harsh physical conditions.
People who work in the informal
sector – Mostly women and
children are likely to suffer abuse
and exploitation.
Which sector will be
important to Ghana in the
future and in particular which
industry will provide many of
the jobs?
In the future there will be an
increase in tertiary jobs
specifically in the tourist
sector.
Named example 2 – China Working
Conditions
Watch the clip below:
http://www.youtube.com/watch?v=sgbxUDvncko&safe=active
Named example 2 - China
What are working conditions like?
China is an Industrial
country
The percentages of each
employment sector are:
Primary 48%
Secondary 25%
Tertiary 18%
China’s biggest exports are:
Coal
Natural Gas
Iron ore and tin
Manufactured Goods like mobile
phones.
China can earn a lot of money
from these products.
What jobs do people do?
Many people are still
employed in China’s growing
manufacturing Industries in
large factories.
China’s Primary sector is also
still important and it is not just
agriculture but also Mining
particularly for coal.
The rapid growth of town and
cities is being accompanied by
a rapidly growing service
sector
Working conditions in factories are
tough. Workers often work long
hours in unsafe, unpleasant
conditions.
These workers are both men and
women but they can earn a lot
more than in the rural areas.
Workers (often men) that work in
the mines have a very hazardorous
occupation.
China has been able to
develop so quickly because it
has an abundance of energy
resources and a large working
population.
China’s labour force is an
important factor because it is
very hard working and many
are quick to learn new skills as
well as being ambitious to
become part of a consumer
society.
Named example 3 - UK
The UK is a post industrial
country
The percentages of each
employment sector are:
Primary 1%
Secondary 18%
Tertiary 81%
The UK’s biggest exports are:
Aircraft technology
Finance and banking
Electronics like Dyson.
.
There are also new ways of
working emerging – Like
Teleworking, telecottaging
and telecommuting. Today
more than 2 million people are
self employed and work from
home – this is particularly
thanks to the broadband
network
Why have employment patterns
changed?
Over the last 50 years, the UK has
deindustrialised. It has lost much
of its traditional manufacturing like
iron and steel, Ship building, car
making and textiles.
As a result of a global shift these
industries have located elsewhere.
The UK continues some
manufacturing but it is mostly high
tech, work in state of the art
factories.
There has also much automation –
workers are replaced by machines.
Online banking and ATM’s for
example mean there are fewer
banks.
Working Conditions in all
employment sectors are good
thanks to strict Health and Safety
Regulations and the existence of
Trade Unions.
There is also a national Minimum
wage (currently £6.31)
Key Idea 2: The role of global institutions
IMF
http://www.youtube.com/
watch?v=BhWKUbnlLeo
The International Monetary Fund (IMF) is an organisation of 188 countries, working to raise global
monetary (money) cooperation, secure financial stability, facilitate international trade, promote high
employment and sustainable economic growth, and reduce poverty around the world. It does this through
keeping track of the global economy and the member countries, lending to countries with payment
difficulties and giving practical help to members.
United Nations
http://www.youtube.com/
watch?v=QoIafzc0k74
Through UN efforts, governments have concluded many multilateral agreements that make the world a
safer, healthier place with greater opportunity and justice for all of us. This comprehensive body of
international law, including human rights law, is one of the UN's great achievements. It has close links with
UNESCO, WHO, UNICEF, FAO.
World Trade Organisation
WTO deals with the rules of trade between countries. Its main function is to ensure that trade flows as
freely as possible. They are often called in to deal with disputes between countries that have previously
made trade agreements. The goal is to help producers of goods and services, exporters, and importers
conduct their business without exploitation.
The World Bank is a financial institution which provides loans to developing countries for capital programs
(money making). Its official goal is the reduction of poverty, with all its decisions being guided through a
commitment to the promotion of foreign investment and international trade, as well as the facilitation of
capital investment.
World Bank
Trans national Company
http://www.youtube.com/
watch?v=jDASb6DfRqE
A company with its headquarters in one country owns factories in one or more other countries and sells
its products globally. The main priorities of a TNC are profit driven. They are always looking for the highest
profit margins. This often means their factories are in LEDC’s to make the most of low wages and often
have headquarters in MEDC’s.
Key idea 3 – What is the affect of Globalisation on
different groups of people
Impact on men in the developed world
Impact on women in the developed world
In the UK, fewer full time jobs in secondary
industries, and more part time tertiary jobs than
50 years ago
Men in the East end of London have reduced
access to secondary jobs in car manufacturing
that their fathers did
Women in developed countries have increased
access to flexible work compared to 50 years
ago when more jobs were labour intensive- so
now women are more equal
Impact on men in the developing world
Impact on women in the developing world
Many men in developing countries have to leave
their rural homes and children with elderly
relatives in countries like China, to work in
factories in urban centres
Many men in developing nations feel work is
better paid and more consistent in factories
compared to farming which can be affected by
the weather
Women and men in the developing world have
access to urban secondary and tertiary jobs
Many women in countries like Bangladesh work
in ‘sweatshops’ for TNCs, stitching clothes for
minimal pay, in tough conditions with limited or
no breaks
Women and men in the developing world have
access to urban secondary and tertiary jobs
Women in the developing world have increased
access to education
Has meant thousands of women in Kenya have
access to land which previously they did not
under Kenyan law
Key Idea 4: Globalisation is a wonderful thing or is it?
Arguments for
Arguments against
Helps LEDC’s develop and have efficient economies.
More MEDC’s; more countries can become more powerful
and shares the worlds wealth more equally
LEDC’s become more industrialized – have control of their
own economies
When TNC’s set up a factory in a country local people are
getting more money, not a lot but still more.
More countries can benefit from a more diverse culture e.g.
Bollywood
Learning new skills
TNC’s pay taxes in countries which help LEDC’s
infrastructure
Improving working conditions in LEDC’s – many big
companies have ethical trading codes (e.g. Accessorise
and Body Shop)
Sharing good practises
Quite often they are taking jobs that people don’t want to
do in MEDC’s
Breaking down barriers between countries and promoting
multicultural societies
The company has provided clean water supply and
electricity in the local area.
LEDC workers can now afford to send their children to
school
Stops/squashes originalities and different cultures within
countries.
Why does poverty still exist if LEDC’s are developing more
efficient economies?
Causing damage to the environment e.g. plastic bags
Most profits return back to the TNC countries and
branches in LEDC’s are not benefiting.
LEDC’s don’t have much chance to develop their own
industries.
TNC’s Invests in countries and then move away and create
short term benefits but more poverty in the long run
In LEDC’s workers are learning new skills that aren’t really
helping and are dumbing down clever people, semi-skilled,
unskilled jobs.
In MEDC’s people are losing their jobs because companies
are moving to places where wages are cheaper
Wages are so low their not really benefiting.
TNC’s are not always investing in host country their just in
it for themselves.
Poor working conditions in LEDC’s
- Long hours and a long working week
No health and safety
Low wages
No unions
limited rights
Many people are available to work so the TNC can fire and
rehire anyone they want
Dorms are shared by 20+ workers and disease/illness can
spread very quickly
Key Idea 5: How & why have patterns of international
trade and Foreign Investment changed over time?
International trade is the movement of goods and services (e.g. workers /
banking) across borders and therefore between countries.
Foreign direct investment (FDI) is when a company invests capital (spends
its money / uses its resources e.g. workers & expertise) in a different country
by either building facilities (e.g. factories) or buying other companies. (e.g.
Walmart in the USA now owns ASDA in the UK.)
Goods & services are the products that are traded between between different
countries e.g. cars, electronics, food or financial services like insurance e.g.
Toyota cars manufactured in Japan are sold in the UK.
Capital flows are the movement of capital between countries e.g. American
companies (Nike) spend money building factories in China so they can get their
products manufactured cheaply.
Why has international trade grown so rapidly?
Lower and Faster Transport Costs.
Containerisation - Most goods now arrive from Asia
in containers which are easier to transport to ports, to
load onto ships and then unload at the other end. Each
container is bar-coded so machines rather than people
can identify its contents and where it needs to go
Shipping – ships transport over 90% of our goods and
have become much larger yet only need small crews.
They are also extremely fuel efficient reducing fuel
consumption
Aircraft – Transport by aircraft is more expensive than
by ship so only 0.2% are transported by Air. However
more high value goods like electronics, medical
supplies and fruit and veg is transported by Air as it is
much faster.
Global trade has also increased because of the
growth of these (TNCs)!
Named Example 4: Nike a Secondary TNC and an example of a
TNC who has merged with other companies.
Nike started in 1964 when Phillip Knight began importing running shoes
From Japan, where labour was cheap. Today is valued at over $10billion.
Nike has its head Office in the USA and all design is carried out at the Oregon
head Office but though decision making are kept in the USA most Asian outsourcing countries get
the less profitable production activities.
South Korea, Taiwan 1970’s : Nike was attracted by cheap labour so instead of owning its
own factories it outsourced production to these countries.
China 1980’s: Nike began production in China to take advantage of cheap labour
Thailand and Indonesia late 1980’s: South Korean companies, with whom Nike had developed a
long term relationships moved operations south t Thailand and Indonesia in search of cheap
labour.
Vietnam 2000: Now that China’s currency is worth more , it is cheaper to make many items in
Vietnam.
Nike bought Converse in 2001 due to Converse going bankrupt and Umbro in 2007 – This is know
as a Merger.
Since 2000, many campaigners
have encouraged Nike to improve
working conditions for workers in
‘sweatshops’. Nike now publishes
data about supplier inspections on
its websites.
It is important to bear
in mind that one of
the reasons Nike
and other TNC’s are
attracted to these
South East Asian
countries is because
these countries
already had
reasonably good
infrastructure. Also
the labour force is
often very hard
working and many
are quick to learn
new skills. There are
also no trade unions
or few workers rights
so it is easy for
workers to become
exploited
Named example 5: A state-led
company and its investment
Sinopec is a Chinese oil & gas company founded in 2000
In 2004 Sinopec invested heavily in offshore oil & gas
exploration in Gabon (Africa)
In 2005 Sinopec bought oil fields in Sudan and began
exporting oil back to China
In 2009 it was ranked the 7th largest company in
the world
In 2012 Sinopec invested $2.45 billion in 20 oil fields in
Nigeria
In 2013 they bought (invested) $3.1 billion in exploring oil & gas
in Egypt
Named Examples 6: TNCs in Tertiary Sector
Case study on BT (a TNC in the tertiary sector)
BT is a British based
company it is one of the
worlds largest
telecommunications
companies in the world.
BT is an example of
Footloose company
because it can locate
anywhere as long as it has
access to high quality
communication links.
It operates in
over 170
countries
It outsources :
Call centres in India
Software development in
Bangalore and Delhi
Company Accounting –
Silicone Valley in Bangalore
However has lead to
unemployment in the
UK as call centres are
located abroad.
Outsourcing is
when services
are moved to a
location where
wages are lower
Creates jobs for
English Speaking
graduates and in turn
attracts other
companies to locate
there so the whole
area benefits form
the multiplier effect.
Named Study 7: Impact of
Deindustrialisation on the UK.
Deindustrialisation is the decline in manufacturing (secondary) industry and the growth in tertiary and quaternary industries.
Reduced demand for
traditional products due to
new technologies
Reasons for
De-industrialisation
Greater competition from
countries such as China and
India
Mechanisation has increased productivity and
reduced the number of workers needed
Economic impacts
- use to be a large shipbuilding area but
has declined over the years
- Loss of personal income
- Loss of taxes to national and local
governments
- Rising demand for income support
services
-Loss of income in the local areas due
people’s lack of spending power (cant
afford to buy things)
-Changes employment structure of an
area as there are more jobs in the
tertiary and quaternary sector
Social Impacts
- Family breakdown
- Alcoholism and crime
- Permanent unemployment
Environmental Impacts
Positive:
More available land
Less water used in industrial processes
Less energy required for machines
Reduced traffic congestion
Reduced noise and air pollution
Negative
Empty factory buildings
Good manufactured further away =
transport issues
Globalisation – past questions
1.
2.
3.
4.
5.
6.
7.
8.
Suggest one reason why countries with a high percentage of people working in secondary sectors also have a high GDP per capita (2)
Describe the relationship between GDP per capita and the percentage of people working in secondary sectors (2)
Explain why international trade has grown so rapidly over the last 50 years (6)
Explain how the growth of secondary sector employment in developing countries can bring both benefits and problems (4)
Describe the negative impacts of globalisation on people in the developing world (4)
Examine the positive and negative impacts of globalisation on different groups of people (6)
Toyota opened a car factory in Derby in the UK in 1992. Suggest two benefits this may have brought to the local people (2)
Toyota’s research and development sites are mostly in developed countries and why Toyota locates some factories in developing
countries (4)
Globalisation
Good Luck