Changing Economies » Globalisation Impacts

What you'll learn this session

Study time: 30 minutes

Define globalisation and understand its key drivers
Analyse the economic, social and environmental impacts of globalisation
Explore how globalisation affects both HICs and LICs differently
Examine detailed case studies of globalisation impacts
Evaluate whether globalisation is a positive or negative force

Introduction to Globalisation Impacts

Globalisation is changing our world at lightning speed! It's the process that connects countries through trade, communication and culture, making our planet feel smaller and more connected. But these connections bring both opportunities and challenges for different places around the world.

Key Definitions:

Globalisation: The increasing connections between countries through trade, investment, technology and cultural exchange.
Transnational Corporations (TNCs): Large companies that operate in multiple countries.
Outsourcing: When companies move parts of their business to other countries to reduce costs.
Free trade: Trade between countries without tariffs (taxes) or other barriers.

🌎 Drivers of Globalisation

Several key factors have accelerated globalisation:

Technology: The internet, mobile phones and faster transport have shrunk distances
Trade agreements: Countries removing barriers to make trade easier
TNCs: Big companies expanding globally, seeking new markets and cheaper production
Containerisation: Standardised shipping containers making transport more efficient

📈 Measuring Globalisation

We can see how globalised a country is by looking at:

How much it trades with other countries
Foreign investment levels
Internet access and connectivity
International migration
Cultural influences from abroad

Economic Impacts of Globalisation

Globalisation has transformed economies worldwide, creating winners and losers as money, jobs and opportunities shift around the globe.

👍 Positive Economic Impacts

New jobs created by TNCs
Technology and skills transfer
Economic growth in developing countries
Lower prices for consumers
More variety of products

👎 Negative Economic Impacts

Job losses in HICs as manufacturing moves to LICs
Exploitation of workers in some factories
Local businesses can't compete with TNCs
Economic dependency on global markets
Increased inequality within countries

📝 Key Economic Changes

Rise of service industries in HICs
Manufacturing growth in LICs and NICs
Global supply chains spanning multiple countries
Increasing economic interdependence
Growth of e-commerce and digital economies

Case Study: Apple's iPhone Global Supply Chain

The iPhone shows globalisation in action! While designed in California, its components come from over 200 suppliers across 43 countries. The main assembly happens in China by Foxconn, which employs hundreds of thousands of workers. This global approach allows Apple to use specialist skills from different regions while keeping costs down.

Economic impacts include:

High-value design jobs in the USA
Manufacturing jobs in China (though working conditions have been criticised)
Component manufacturing across Asia and Europe
Retail and service jobs worldwide

This shows how one product can create different types of jobs across the development spectrum.

Social Impacts of Globalisation

Globalisation doesn't just change economies it transforms cultures, communities and how people live their daily lives.

Cultural Changes

As ideas, media and people move around the world more freely, cultures are mixing and changing faster than ever before.

🎥 Cultural Homogenisation

Some worry that globalisation is creating a "global monoculture" where local traditions get replaced by Western influences:

Fast food chains replacing local cuisine
Hollywood films dominating cinemas worldwide
English becoming the global business language
Similar shopping centres appearing in cities globally

🎆 Cultural Hybridisation

Others see globalisation creating exciting new cultural mixtures:

Fusion food combining different culinary traditions
Music genres that blend global and local styles
New art forms drawing on multiple cultural influences
Local adaptations of global trends (like Bollywood's take on Hollywood)

Migration and Communities

Globalisation has accelerated migration, creating more diverse communities but also new tensions.

Brain drain: Skilled workers leaving LICs for better opportunities in HICs
Remittances: Migrants sending money home (over $500 billion annually worldwide)
Multicultural cities: Places like London where hundreds of languages are spoken
Social tensions: Sometimes leading to concerns about immigration and cultural change

Environmental Impacts of Globalisation

Our more connected world has significant consequences for the environment, creating both problems and potential solutions.

🗑 Environmental Challenges

Increased carbon emissions from global shipping and air freight
Deforestation to grow export crops or extract resources
Pollution from factories in countries with weaker regulations
Waste exports from HICs to LICs
Resource depletion to meet global consumer demand

🌲 Environmental Solutions

International agreements like the Paris Climate Accord
Transfer of green technologies between countries
Global environmental movements sharing ideas and tactics
Sustainable certification schemes (like Fairtrade or FSC)
Corporate sustainability initiatives responding to global consumer pressure

Case Study: Fast Fashion and Bangladesh

Bangladesh has become the world's second-largest clothing exporter, with the garment industry accounting for 80% of its exports. This shows both sides of globalisation:

Positive impacts:

Created 4 million jobs, especially for women
Helped Bangladesh's economy grow at 6-7% annually
Reduced extreme poverty rates
Improved female education and empowerment

Negative impacts:

Low wages (minimum wage around £70 per month)
Poor working conditions and safety issues (Rana Plaza factory collapse killed 1,134 workers in 2013)
Environmental damage from textile production
Vulnerability to fashion industry decisions and global economic changes

This case study shows how globalisation creates complex trade-offs between economic development and social/environmental concerns.

Globalisation: Winners and Losers

Globalisation affects different groups and places in very different ways.

🏆 Winners

Transnational corporations
Skilled workers in growing sectors
Consumers with access to cheaper goods
Growing economies like China and Vietnam
Urban areas with good connectivity

😕 Losers

Manufacturing workers in HICs
Local businesses facing TNC competition
Rural or isolated communities
Traditional industries and crafts
Countries dependent on single exports

⚖ Managing Impacts

Education and retraining for affected workers
Fair trade initiatives
Local economic development strategies
International regulations for TNCs
Support for sustainable development

The Future of Globalisation

Globalisation continues to evolve, with new trends emerging:

Digital globalisation: Data flows becoming as important as physical goods
Reshoring: Some manufacturing returning to HICs with automation
Regional trade blocs: Growing importance of regional partnerships
Rising nationalism: Political pushback against some aspects of globalisation
Sustainable globalisation: Growing focus on environmental and social standards

The COVID-19 pandemic revealed both the strengths and vulnerabilities of our interconnected world. While global scientific cooperation developed vaccines quickly, disrupted supply chains showed the risks of global interdependence.

Exam Tip: Evaluating Globalisation

When answering questions about globalisation impacts, remember to:

Consider economic, social AND environmental impacts
Explain how impacts differ between HICs and LICs
Use specific examples and case studies to support your points
Show balanced evaluation - both positive and negative impacts
Consider short-term versus long-term impacts

Strong answers avoid simply saying globalisation is "good" or "bad" - instead, they explain who benefits, who doesn't and why.

🧠 Test Your Knowledge!