Download - Globalization
Globalization
By: Allison Chen
Overview “Globalization is a process that results in the
growing interconnectedness of the world” Driven by technological innovations Effects similar to chaos theory
Main Controversies Trade Environment Media Development Women Investment International law
Technology Culture Migration Human rights Energy Education Health
Economic Globalization Accelerated in 1980s and 1990s free-market economic
systems Reductions in barriers to commerce and international
agreements Growth and development levels increase higher wages, shift
from labor-intensive to more capital and knowledge intensive industry
Foreign direct investment (FDI): measure of foreign ownership of productive assets, such as factories, mines and land Largest form of private capital inflow to developing countries Brings technical information, jobs, and transmission of ideas
Most direct effect on people through their work and employment
Local markets exposed to global competition
Volume of World Merchandise Trade Growth
19%
14%
13%
7%
5%
3%
3%
2%2%
2%2%
Top Trading Partners for Year End 2012 (Exports)
CanadaMexicoEUChinaJapanBrazilS. KoreaHong KongAustraliaSingaporeSwitzerland
18.70%
14.30%
12.20%
12.10%
6.40%
2.60%
2.40%1.80%
1.70% 1.70%1.40%
Top Trading Partners for Years End 2012 (Imports)
ChinaCanadaMexicoEUJapanS. KoreaSaudi ArabiaIndiaTaiwanVenezuelaBrazil
16%
14%
13%
12%
6%
3%
2%2%
2% 2% 2%
Top Trading Partners for Year End 2012
CanadaChinaMexicoEUJapanS. KoreaBrazilSaudi ArabiaTaiwanIndiaVenezuela
Multinational Corporations Multinational corporation (MNC): a business
organization whose activities is located in multiple countries and is the organizational form that defines FDI
Dominant role in trade and financial interactions globally
Creates competition between countries vying for investment
Political as well as economic force Comprises one-third of the world’s exports Inequality: wealth and strong bargaining position
relative to the often poorer (and weaker) developing countries in which they invest
MNC Example: Nike, Inc. Headquarters: Beaverton, Oregon Development, marketing, and selling of athletic
equipment Manufacturing locations: 45 countries, factories
mostly in Asia (Indonesia, China, Taiwan, Indian, Thailand, Vietnam, Pakistan, Philippines, and Malaysia)
Operates in 120 countries and has over 20,000 employees
Technology Promotion of new products and ideas across
nations and cultures channels to exchange information
Internet creates new ways to make transactions and run businesses
Individuals connect globally and collaborate on ideas and technological innovations
Inequality Income gap between rich and poor nations
increasing Capital directed at capital-generating industrial
sectors Alienation, massive unrest, and political and
social instability Spending directed away from social welfare and
towards export sectors Race to the bottom: a dynamic whereby
companies seek the lowest level of regulation and taxation lowering of standards of labor, human rights, and environmental protection
Global Governance Creation of global institutions (ex. IMF, WTO,
WHO, and World Bank) Loss of national sovereignty in certain issues Treaties are strongest and most binding type of
law International Court of Justice (UN): settles legal
disputes Enforced through reciprocity, shaming, and
collective action
Environment Global warming caused by fossil fuel
combustion, the burning of forests, and biomass combustion Produce halogens (carbon dioxide, methane, etc.)
Ozone depletion Exploit resources of countries with little regard
to environmental cost Illegal international wildlife trafficking Spread of invasive species
Cultural Globalization Diffusion of Western culture Defense of local and traditional cultures Languages countries trying to protect
languages from the immigration of foreign words
Democratization Entertainment translated into multiple
languages
Major Languages Spoken Around the World
http://apps.npr.org/tshirt/#/title
Benefits of Globalization Allows for countries to specialize: labor,
natural resources, and technology Increases the variety of goods and services
available Increased competition spurs domestic firms to
invest in equipment and software embodied with the latest technologies
Poor countries provided access to new ideas and technologies
Downside of Globalization Creates people in certain industries who
cannot compete with foreign manufacturers Move production overseas for cheaper labor,
creating increased unemployment Rising income inequality between the low-
skilled and high-skilled workers