Impacts of Globalisation Key Idea 3 b Processes

Impacts of Globalisation Key Idea 3. b: Processes of economic change can create opportunities for some while creating and exacerbating social inequality for others. Learning Objectives: q. To understand what is meant by global shift. q. To understand how globalisation and the global shift of industry can create opportunities and create social inequality.

Key words and definitions q. See handout – make sure this goes in your file and you know these key terms and definitions.

The Changing Distribution of Manufacturing q Describe what the graph shows. q What changes have taken place? q Why do you think these changes have taken place? q What has enabled this to happen?

Globalisation is …. … the sharing and movement of people, money, goods, cultures and information between different countries around the world with few or no barriers. …it is the increasing interconnection of the world’s economic, cultural and political systems.

Starter: q What kinds of jobs dominated in the UK up until the 1970 s? q Where did all the jobs go? q Why did they leave the UK?

The global economy in the 20 th century • For most of the last century the main centres of economic activity were Western Europe, North America and Japan. These areas had industrialised in the 19 th century or early part of the 20 th century and dominated global industrial production. The European powers and Japan were able to exploit large overseas empires, particularly as a source of raw materials and a market for manufactured goods.

• In the 1960’s the de-colonisation process was going ahead full steam in Africa and Asia with the emergence of many new countries. The newly independent countries were collectively known as the Third World (The rich industrial countries were known as the First World and the communist countries as the Second World).

The Emergence of the NICs • In the last quarter of the 20 th century some developing countries began to industrialise and to challenge the economic power of Europe, Japan and North America. These countries are collectively known as Newly Industrialising Countries or NICs for short. • This was because these countries possessed “comparative advantages” over other countries and all of the NICs had common factors.

Comparative Advantage • Comparative advantage is the term used to identify the economic advantages a country has in relation to it competitors. The main comparative advantages the UK has over other countries are: ü a leading financial centre with a high degree of financial expertise ü excellent support services such as accountancy, advertising and design ü and a high quality tertiary education sector.

Common factors of NICs • A large population that provides a big internal market and is a resource that attracts investment. • An openness to globalisation, involving movements of capital, labour and trade. • A recent switch from agricultural to industrial economies. • Large national corporations based there but also operating on several continents. • Strong political leadership and some elements of state planning to ensure development. • An education system that is strong enough to produce a core of well educated people.

What do you think is meant by the term Global Shift? q Watch this clip

Globalisation has led to a global shift in manufacturing This refers to the relocation of manufacturing production on a global scale. • 50 years ago most manufacturing was concentrated in Western Europe and North America. Raw materials such as copper and coffee were exported by countries like Zambia and Brazil, which had limited manufacturing bases of their own. • From the 1980 s the New International Division of Labour (NIDL) gathered pace. European, North American and Japanese TNCs created labour-intensive factories in what were called Newly Industrialised Countries (NICs), mainly in East Asia and Latin America. • Containerisation and bulk handing bought down relative costs dramatically and so contributed to locational changes.

With economic restructuring came the loss of employment in the primary and secondary sectors. ACs transformed in to post-industrial societies in which most people worked in the tertiary and quaternary sectors.

Economic Change § Globalisation – how does it bring about structural economic change? ü Global shift resulted in the structure of economies changing enabled due to improvements in transport technology. ACs have evolved into places where most employed people work in services such as finance, health, insurance and education. § The impacts of this structural economic change on people and places has created opportunities and increased social inequality. e. g. when mines and factories closed in AC’s, job losses were an inevitable consequence. Many places had become dependent on a narrow range of traditional economic activities such as heavy engineering e. g. ship building, chemicals and textiles. Such structural economic change was geographically concentrated in certain places. Worse affected were regions such as NE England, NE France, the Ruhr region in Germany and the Great Lakes of the USA. v Opportunities for these areas may have been environmental as reduced air pollution and so levels of health improved. v On the other hand, large amounts of urban land were left derelict and contaminated. Toxins such as mercury can have serious health risks.

Economic Change § The impacts of this structural economic change on people and places has created opportunities and increased social inequality. e. g. Many back office clerical jobs and call centres have relocated to EDCs and this has created opportunities for the people there e. g. India. Such out sourcing has enabled AC’s to focus on higher skilled activities such as R & D and marketing. e. g. in AC’s, specialist high-tech manufacturing such as aerospace, pharmaceuticals and bio-technology has advantaged highly skilled and qualified people and some places e. g. Cambridge, UK; Bangalore in India. v Comparative advantage – is the principle that countries or regions benefit from specialising in an economic activity in which they are relatively more efficient or skilled.

Homework Questions: read the slides and pages 161/164 & 165 in your text book to answer the questions below. 1. 2. 3. 4. 5. What is meant by structural economic change? Give an example. What is de-industrialisation? When and why did this happen in the UK? What process enabled this to happen? Where did manufacturing shift from and to? What is the term used to describe this shift in location of manufacturing industries? 6. What is meant by the term comparative advantage? 7. What comparative advantages does the UK currently have to allow it to be a post industrial society focussing on the knowledge economy? 8. What comparative advantages did newly industrialised countries to explain their emergence on the global economy? 9. What positive impacts (opportunities) has this global shift in manufacturing had for a) ACs like the UK and b) for EDCs and LICs? Give examples. 10. What negative impacts has this global shift in manufacturing had for a) ACs like the UK and b) for EDCs and LICs? Give examples.