Summary
Globalisation is the process by which countries, businesses, and people become increasingly interconnected and interdependent through trade, investment, technology, culture, and communication. It involves breaking down barriers between nations, allowing goods, services, capital, information, and people to move more freely across international borders.
- Globalisation — the process of increasing interconnectedness and interdependence of countries. Example: A British teenager using a smartphone assembled in China.
- Transnational Corporations (TNCs) — large companies operating in multiple countries to maximise profit and efficiency. Example: Nike producing footwear in Vietnam.
- Increased Global Trade — expansion of international trade with reduced tariffs and barriers. Example: WTO agreements facilitating easier cross-border commerce.
- Improved Transport Networks — advancements in shipping and transport making global movement of goods faster and cheaper. Example: Containerisation revolutionising shipping.
- Advanced Communications Technology — technologies like the internet enabling instant global communication. Example: Social media platforms connecting billions worldwide.
- Flows of Capital, Labour, and Ideas — free movement of investment, workers, and knowledge across borders. Example: Foreign direct investment (FDI) in developing countries.
Exam Tips
Key Definitions to Remember
- Globalisation: The process of increasing interconnectedness and interdependence of countries.
- Transnational Corporations (TNCs): Large companies operating in multiple countries.
- Increased Global Trade: Expansion of international trade with reduced tariffs.
Common Confusions
- Confusing globalisation with just economic trade, ignoring cultural and technological aspects.
- Assuming TNCs only bring positive economic impacts without considering social and environmental effects.
Typical Exam Questions
- What is globalisation? Globalisation is the increasing interconnectedness and interdependence of countries through trade, investment, technology, culture, and communication.
- Explain two positive and two negative impacts of globalisation on culture. Positive: Cultural exchange and diversity; access to global entertainment. Negative: Loss of local traditions; cultural homogenisation.
- Why do TNCs locate their headquarters in HICs but production facilities in LICs? TNCs locate HQs in HICs for skilled workforce and strong legal systems, while production is in LICs for lower labour costs and fewer regulations.
What Examiners Usually Test
- Understanding of the key features and impacts of globalisation.
- Ability to evaluate the economic, social, and environmental effects of TNCs.
- Application of case study evidence to illustrate globalisation and TNC impacts.