Year 9 Geography - Unit 1 - Homework 1 - Reading.docx

The changing nature of global industry Globalisation is where human activities take place on a worldwide scale so that we increasingly live in a 'global village'. Interdependence is when countries are linked together economically, socially, culturally and politically so that they are dependent on ea...

The changing nature of global industry Globalisation is where human activities take place on a worldwide scale so that we increasingly live in a 'global village'. Interdependence is when countries are linked together economically, socially, culturally and politically so that they are dependent on each other. The drivers of globalisation: Globalisation, a term first used in the 1950s, is due to: improvements in technology - internet access has expanded - mobile phones are widely available and affordable improvements in telecommunications - the cost of data transmission has become cheaper due to a global fibre-optic cable network improvements in transport - people now holiday in faraway destinations and businesses ship products globally the growth of multinationals such as HSBC, McDonalds and Nike greater political cooperation and development of trading blocs Multinational corporations: A multinational corporation (MNC) is a company that operates in more than one country. It can also be referred to as a 'transnational corporation' (TNC). MNCs often have factories in low to middle income countries because of: cheaper labour access to cheap raw materials access to markets where the goods are sold friendly government policies more relaxed environmental laws Offices and headquarters tend to be located in high-income countries. Advantages of MNCs locating in a country Creation of jobs. Improved education and skills. Investment in infrastructure, e.g. new roads. Help in exploiting natural resources (as the LIC may lack the means to do it independently). The multiplier effect helps in developing local industry. Disadvantages of MNCs locating in a country Poor working conditions. Damage to the environment. Profits go back to the country where the headquarters are located, not benefitting the host country. Factories are footloose and jobs insecure. Natural resources may be over-exploited. Positive and negative consequences of globalisation Some would argue that globalisation has spread wealth and led to the improvement of standards of living in newly-industrialised countries (NIC) such as India and China. Others claim that it is creating an unfair world where the rich countries exploit the world's poorest people and it has increased the development gap. Positive consequences Multinationals provide new jobs and skills. Multinationals bring foreign currency to local economies when they buy local products and services. The mixing of people and cultures from all over the world enables the sharing of ideas and lifestyles, creating vibrant cultural diversity. People can take holidays in far off locations. Consumers enjoy a greater choice of goods and services at cheaper prices. Migration of people can fill labour and skill shortages. It helps make people more aware of global issues, such as desertification and global warming, and able to work together to tackle these issues. It enables governments to work together to tackle global issues or respond to events, such as a natural disaster. Negative consequences It operates mostly in the interests of the richest countries, who continue to dominate world trade. Multinational companies may drive local companies out of business and are sometimes more powerful than the governments of the countries in which they invest. It is a threat to the world's cultural diversity - threatening local traditions and languages and making the whole world more uniform to fit the western model. Some nations feel that they are losing control over key decisions and sacrificing their sovereignty. Migration of people across the world can cause social tensions and conflict of ideologies. Industry may begin to thrive in NICs at the expense of jobs in manufacturing in high-income countries (HICs). The decline of traditional industries in HICs is known as deindustrialisation. Globalisation is one major factor in the process.