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  1. 1. Going global Globalisation
  2. 2. What is globalisation? <ul><li>The International Monetary Fund’s (IMF) definition of globalisation is: ‘the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services, freer international capital flows , and more rapid and widespread diffusion of technology .’ </li></ul>
  3. 3. Aspects of globalisation
  4. 4. Globalisation and you <ul><ul><li>Economic : rising petrol prices, food from the ‘global village’ </li></ul></ul><ul><ul><li>Technological : the latest gadgets </li></ul></ul><ul><ul><li>Political : the global ‘war on terror’, the Millennium Development Goals, events such as ‘Live 8’ </li></ul></ul><ul><ul><li>Cultural : global music, art and fashion </li></ul></ul><ul><ul><li>Demographic : new migrations of people </li></ul></ul><ul><ul><li>Environmental : global climate change, biodiversity hotspots </li></ul></ul>
  5. 5. A ‘shrinking world’ (1) A shrinking world: the time taken to navigate the globe
  6. 6. A ‘shrinking world’ (2) <ul><ul><li>internet and satellite connections have speeded up financial flows and business decisions </li></ul></ul><ul><ul><li>the costs of communication have fallen </li></ul></ul><ul><ul><li>containerisation has reduced shipping costs </li></ul></ul><ul><ul><li>cheap flights have brought air travel to the masses in richer nations </li></ul></ul><ul><ul><li>English has become the international language of business </li></ul></ul><ul><ul><li>Developments in communications and transport have reduced the importance of distance and this has aided globalisation. For example: </li></ul></ul>
  7. 7. Growth in world trade <ul><ul><li>As transport and communications have grown, global trade has expanded phenomenally. </li></ul></ul><ul><ul><li>The World Trade Organization has organised a succession of trade agreements that have increased free trade. </li></ul></ul><ul><ul><li>Many countries, especially newly industrialised countries (NICs) , have benefited from this growth in trade. </li></ul></ul>
  8. 8. Transnational corporations <ul><ul><li>Other factors apart from transport, communications and trade developments have accelerated globalisation. </li></ul></ul><ul><ul><li>Transnational corporations (TNCs) have grown and developed global production and sales networks. </li></ul></ul><ul><ul><li>For example, Toyota has plants in 26 countries and sells its products in 140 countries. </li></ul></ul><ul><ul><li>Seeking low-cost production locations, TNCs have spread into NICs and these countries have become tied into the global network. </li></ul></ul>
  9. 9. The ‘global shift’ <ul><ul><li>The changing location of production is termed the ‘global shift’. </li></ul></ul><ul><ul><li>This began in the 1950s and 1960s as low-tech production (e.g. textiles, toys) was moved to the ‘Asian Tiger’ NICs. </li></ul></ul><ul><ul><li>It accelerated in the 1990s when consumer electronics shifted to China and other low-cost locations. </li></ul></ul><ul><ul><li>Recently, service jobs, call centres and software development have shifted to India. </li></ul></ul>
  10. 10. Balance of world trade <ul><ul><li>Not everyone has benefited from globalisation. </li></ul></ul><ul><ul><li>The five largest exporting economies account for 37% of world trade. </li></ul></ul><ul><ul><li>The least developed countries, with a total population of around 650 million, share only 0.6% of world trade. </li></ul></ul>
  11. 11. International migration <ul><ul><li>Another consequence of globalisation is increasing international migration. </li></ul></ul><ul><ul><li>Transport developments have made movement easier. </li></ul></ul><ul><ul><li>As developed world economies have grown, the ‘pull’ for people from the developing world has increased. </li></ul></ul><ul><ul><li>Lack of development in the least developed countries has increased the ‘push’ factor. </li></ul></ul><ul><ul><li>TNCs have generated a new globe-hopping business executive elite who are continually on the move. </li></ul></ul><ul><ul><li>Migrant flows have risen from 76 million in 1960, to 176 million in 2000, and 191 million in 2006. </li></ul></ul>