Unit Two Revision 1.Globalisation 2.Development Dilemmas 3.Consuming Resources 4.Population

Globalisation Case Studies: Secondary TNC – Nike Tertiary TNC – BT/Tesco Global Institutions: -World Trade Organisation (WTO) -International Monetary Fund (IMF) -TNCs Clark Fisher: Pre-Industrial – Ethiopia Industrial – China Post-Industrial – UK/USA Key Terms: Primary, Secondary, Tertiary, Quaternary, NIC, Clark-Fisher, Networks, Flows, Players, Foreign Direct Investment, Trade, Subsistence/Commercial, Institutions, Global Shift, Outsource, (de)Industrialisation, Containerisation

Globalisation

StageCountryJobs & IncomeDevelopment PrimaryEthiopiaPractically no pay (based on subsistence). Farming. Vulnerable to weather. Livilihood is based on food production. Low SecondaryChina£1000-£3000/yr. Long hours, repetitive work (manufacturing, factory). No union protection. Few rights. Factories want male works 30 and below (exclusive) Industrialising (developing but not poor). Typically NICs due to high population. TertiaryUK£20,000 - £40,000 (teacher) Good working conditions. Health and safety. Unions (workers protected). Minimum wages. Hours can be unsociable. Job is high stress to deliver. Good level of development. Most of the job require good education. QuaternaryUSAPharmaceutical (medicine) researcher. £25,000 - £100,000 and more. Excellent working conditions, high stress job as TNCs demand new products to be developed for profit. Superb development (excellent high level education needed).

Globalisation StageCountryJobs & IncomeDevelopment PrimaryEthiopiaPractically no pay (based on subsistence). Farming. Vulnerable to weather. Livilihood is based on food production. Low SecondaryChina£1000-£3000/yr. Long hours, repetitive work (manufacturing, factory). No union protection. Few rights. Factories want male works 30 and below (exclusive) Industrialising (developing but not poor). Typically NICs due to high population. TertiaryUK£20,000 - £40,000 (teacher) Good working conditions. Health and safety. Unions (workers protected). Minimum wages. Hours can be unsociable. Job is high stress to deliver. Good level of development. Most of the job require good education. QuaternaryUSAPharmaceutical (medicine) researcher. £25,000 - £100,000 and more. Excellent working conditions, high stress job as TNCs demand new products to be developed for profit. Superb development (excellent high level education needed). Explain how working conditions differ in the developed and developing world (4). Using examples, compare working conditions of people in the developed and developing world (6).

Globalisation EthiopiaChinaUK P/S/T(Q) %85/5/1040/30/308/10/80(2) GDPLow Subsistence Farming Low value goods Higher Exports increase. Higher value goods. Highest. High paid jobs, high taxes. HQ of companies (profits)

Globalisation Important to note: Some countries do not follow the model. Some developed countries like Germany still have a booming manufacturing industry (cars). Russia still obtains much of its income from primary (oil production). Countries like Jamaica are not very developed but have lots in the tertiary sector (tourism). Only quaternary is really reserved for the hyper-developed countries.

Globalisation Describe how employment changes as a country undergoes economic development (4). Examine how a countries GDP changes through the stages of the clark fisher model (6).

Globalisation Global institutions WTO – Promotes free trade by persuading countries to remove tariffs, taxes and quotas on trade. IMF – group of 188 countries who provide ‘loans’ to the developing world to improve infrastructure. TNCs – outsource parts of industry and operate in multiple countries around the world, employing people globally. Products sold globally. Describe how global institutions have helped to create a more globalised economy (4). Examine the role of global institutions in creating a more globalised economy (6). Take home point: Many argue that TNCs are the most influential ‘player’. McDonalds has 34,000 restaurants in 119 different countries and employs 1.8million people.

Globalisation Examine the impact that globalisation has on different groups of people (6). Using examples. Compare the impact of globalisation in the developing and developed world (6). Examine the positive and negative impacts globalisation has had on different groups of people. (6)

Globalisation

SURPLUS ImportsExports DEFECIT ImportsExports

Globalisation Traditionally (1) Developing countries exported raw materials but imported manufactured goods thus making a trade deficit (2) Developed countries imported raw materials but exported manufactured goods leading to a trade surplus (3) No trade occurred between developing countries. Trade – traditions, volume, patterns. Money flows around the world in several ways: 1.Trade in goods (manufactured, food, oil and raw materials) 2.Stock markets (stock exchange) 3.Money (capital) directly invested from one country to another (USA to China to build a new factory). This is foreign direct investment.

Globalisation 1960 US$0.3trillion 1990 US$3.3trillion 2010 US$15trillion VOLUME OF TRADE

Globalisation PATTERN OF TRADE 1.Africa, Middle East and S/C America account for practically the same now as Asia’s share has grown from 14% to 35% due to industrialisation (China, India, South Korea) 3.Developed world (Europe and N America) have fallen as exports have fallen. USA Exports: 1970 = 16% 2010 = 8% China Exports: 1970 – 1% 2010 = 11%

Globalisation Types of export Larger demand today for fuels, chemicals and ores. Rising populations leads to a higher need/necessity for energy. Countries like China/India/Brazil industrialising therefore need to import fuels.

Globalisation Foreign Direct Investment 1.Vast majority of FDI is between developed world (always is). For example, British Pretroleum (BP) invest heavily in America. 2.Developing countries on the rise. Due to outsourcing/footloose industries (UK company opens a call centre in India. 3.China alone is rising massively (US$114billion rise since 1970). Seen as ‘sweatshop’ of the world. FDI creates jobs.

Globalisation Transport – containerisation (bigger ships, more export). Cheaper and quicker air transport. Communication – broadband, s, internet. Online transactions (instant). Trade agreements – with assistance of the WTO. TNCs – creating global jobs, global awareness to products, increased trade. IMF – easier for state-led investment in developing countries.

Globalisation

The UK INDIA They are all dot-com companies meaning they do most of their business on the Internet. They trade and employ people all over the world.Internet

when economic activities are moved out of developed countries into developing countries because of advances in technology, communications and transport. Nike’s manufacturing companies are now located in China and other Asian countries.

when a job is given to a company overseas (usually a LEDC) that was formerly done at home ( in a MEDC). State two reasons why a company would out-source? 1.) ) Reduce costs Make company larger profits

Globalisation 1) locally or regionally based (2) attracted to raw materials, power, cheap land and good transport (3) Uses local labour (4) Job-specific skills e.g. engineer or fitter (5) Mainly male employment It is the production of manufactured goods The production of knowledge, ideas and services globally based and interconnected (2) global labour force (3) requires good communication (4) equal male-female employment OLD ECONOMY NEW ECONOMY

Globalisation How many different separate jobs can you think of that it takes to get a pair of Nike Roshe’s on your feet? Remember this activity?

Globalisation

Traditional Industries: Textiles, Mining and Engineering. Outsource to Bangladesh Leeds losers: Skilled workers unemployed Few apprenticeships available Old workers can’t get a job Leeds winners: Well qualified men and women benefiting from boom of public sector Bangladesh winners: 5.5mil jobs in clothing industry $US15bil added to GDP Better wages than farm work Bangladesh Losers: work very long hours (100 a week) for a mere £40; better conditions but still poor; older women discriminated against due to having children

Globalisation

BT is what kind of industry? Footloose Industries - can be located anywhere – as long as high quality communication links are available e.g. broadband. BT have opened call centres in Bangalore India due to: (1) cheaper workforce (2) university graduates highly skilled in ICT and English (3) it offers reduced taxes to attract companies (4)city has attracted software development companies creating a ‘Silicon Valley’ which in turn attracts other companies like BT. (4) low telephone and internet costs

Globalisation

1.Describe the impact of globalisation on different groups of people in the developing world. (4) 2.Explain why there has been growth in international trade over the past 50 years. (6) 3.Explain how the growth of secondary sector employment in developing countries can bring both benefits and problems. (4) 4.Using an example you have studied, explain how a TNC in the tertiary sector operates around the world (6) 5.Suggest reasons why:(4) Toyota’s research and development sites are mostly in developed countries. Toyota locates some factories in developing countries. 6. Examine the positive and negative impacts of globalisation on different groups of people. (6) 7. For a named transnational corporation (TNC), explain how it operates in different parts of the world. (4) 8. For a named transnational corporation (TNC), explain how it operates in different parts of the world. (4) 9. Using an example you have studied, explain why TNCs in the secondary sector locate some of their operations in developing countries (4) 10. Using examples, describe how the volume and pattern of world trade has changed over the last 50 years. (6)