Globalisationhttp://www.youtube.com/watch?v=3oTLyPPrZE4&safe=active

Globalisation and the growth of the global economy have led to huge changes in the pattern of employment around the world. As countries

develop, so the type of work available and the working conditions change. Trade and financial direct investment fuel the growth of the global

economy, along with the activities of the key players, the Trans National corporations.

You need to know:

• 3.1 How does the economy of the globalised world function in different places?

• 3.2 What changes have taken place in the flow of goods and capital?

Key terms:Key term Definition

Automation The use of machinery rather than people, in manufacturing and data processing

Deindustrialisation Factories closing down in the 1980’s

Employment Structure

The proportion of people working in each of the primary, secondary and tertiary sector

Flows A system of linkages between objects, places or individuals

Foreign direct Investment

a direct investment into production or business in a country by an individual or company of another country.

Global Economy The international spread of goods and services, especially in recent decades, across national boundaries and with minimal restrictions by governments.

Global Shift Cross border i0nteractions between nations, businesses and people

Globalisation The movement of objects, people and ideas between places.

Industrialisation Where a mainly agricultural society changes and begins to depend on manufacturing industries instead.

Key term DefinitionInformal Sector Forms of employment that are not officially recognised e.g.

People working for themselves on the streets of developing cities.

International Monetary Fund

A US based organisation that raises funds from the worlds wealthier countries, to help countries which become economically unstable like Greece.

Merger When one country takes over another one

Networks Expanding travel networks communication technologies easily connect manufactures and overseas buyers

Newly Industrialised Countries

Like China, India and Brazil

Outsourcing A process in which a company subcontracts part of its business to another company

Players Individuals and groups who are interested in and affected by a decision making process

Primary sector People extract raw material from the land or sea e.g. farming

Key term DefinitionQuaternary Sector Provide information and expert help e.g. IT

Secondary Sector People are involved in manufacturing e.g. house building

sweatshops A factory where workers are expected to work very long hours, with low pay and poor working conditions.

Teleworking Also called: telecommuting the use of home computers, telephones, etc, to enable a person to work from home while maintaining contact with colleagues, customers, or a central office.

Tertiary Sector provide a services e.g. selling goods or nursing

TNC’s Trans National Corporations - a giant company operating in many countries

WTO World Trade Organisation

Globally LEDC’s such as Nigeria and Kenya have high amounts of primary industries due to the fact that there is a lack of education and they are mainly subsidence farmers. MEDC's such as UK and USA tend to focus on Tertiary activities due to higher education rates and tertiary jobs are higher paid. Primary is low due to the fact that most MEDC’s have taken to importing food stuffs etc as it is cheaper.

Economies start to develop and incomes rise = demand for manufactured goods increase = secondary industry grows

Incomes continue to rise, people start to consume more services = tertiary sector grows

Tertiary services support and promote quaternary services

In the pre-industrial stage low-income countries are mainly employed in primary production, middle income countries are focused on secondary industries and finally high-income countries are dominated by the tertiary sector.

This model tell us how employment changes over time and how the balance of employment changes as a country develops. However it does assume that there is a simple straight development path from LEDC’s to MEDC’s.

Key Idea 1: Why are there changing employment structure in countries at different stages of development. The Clarke Fisher Employment Structure

Model

Named example 1 - Contrast working conditions in different countries - Ghana

https://www.youtube.com/watch?v=5EHS_hFpR8E - Watch this to help you understand this.

Named example 1 - Ghana

Ghana is a pre industrial economy

The percentages of each employment sector are:

Primary 50%Secondary 16%Tertiary 33%

What jobs do people do?Many people are still employed on small scale farms in agriculture ( subsistence farming).

There is little commercial farming - mainly growing Cocoa a major export crop.The secondary sector is small and jobs are mainly filled by men.

Many people are also still employed in Informal jobs - which means that they are not formally recognised and therefore employees do not pay any taxes

What are Ghana’s biggest exports and why do they not earn much from these exports?

Cocoa, Diamonds, timber and flowers are Ghana's main exports –but these are often raw materials and not the more expensive finished manufactured products.

What are working conditions like?

Working conditions are tough particularly on the farms where the work is often hard manual labour because there has been a lack of mechanisation and there are often harsh physical conditions.

People who work in the informal sector – Mostly women and children are likely to suffer abuse and exploitation.

Which sector will be important to Ghana in the future and in particular which industry will provide many of the jobs?

In the future there will be an increase in tertiary jobs specifically in the tourist sector.

Named example 2 – China Working Conditions

Watch the clip below:

http://www.youtube.com/watch?v=sgbxUDvncko&safe=active

Named example 2 - China

China is an Industrial country

The percentages of each employment sector are:

Primary 48%Secondary 25%Tertiary 18%

What jobs do people do?Many people are still employed in China’s growing manufacturing Industries in large factories.

China’s Primary sector is also still important and it is not just agriculture but also Mining particularly for coal.

The rapid growth of town and cities is being accompanied by a rapidly growing service sector

China’s biggest exports are:CoalNatural GasIron ore and tin Manufactured Goods like mobile phones.

China can earn a lot of money from these products.

What are working conditions like?

Working conditions in factories are tough. Workers often work long hours in unsafe, unpleasant conditions.

These workers are both men and women but they can earn a lot more than in the rural areas.

Workers (often men) that work in the mines have a very hazardorous occupation.

China has been able to develop so quickly because it has an abundance of energy resources and a large working population. China’s labour force is an important factor because it is very hard working and many are quick to learn new skills as well as being ambitious to become part of a consumer society.

Named example 3 - UK

The UK is a post industrial country

The percentages of each employment sector are:

Primary 1%Secondary 18%Tertiary 81%

There are also new ways of working emerging – Like Teleworking, telecottaging and telecommuting. Today more than 2 million people are self employed and work from home – this is particularly thanks to the broadband network

Working Conditions in all employment sectors are good thanks to strict Health and Safety Regulations and the existence of Trade Unions.There is also a national Minimum wage (currently £6.31)

Why have employment patterns changed?

Over the last 50 years, the UK has deindustrialised. It has lost much of its traditional manufacturing like iron and steel, Ship building, car making and textiles.

As a result of a global shift these industries have located elsewhere.

The UK continues some manufacturing but it is mostly high tech, work in state of the art factories.

There has also much automation – workers are replaced by machines. Online banking and ATM’s for example mean there are fewer banks.

The UK’s biggest exports are:

Aircraft technologyFinance and bankingElectronics like Dyson.

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IMFhttp://www.youtube.com/watch?v=BhWKUbnlLeo

The International Monetary Fund (IMF) is an organisation of 188 countries, working to raise global monetary (money) cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world. It does this through keeping track of the global economy and the member countries, lending to countries with payment difficulties and giving practical help to members.

United Nationshttp://www.youtube.com/watch?v=QoIafzc0k74

Through UN efforts, governments have concluded many multilateral agreements that make the world a safer, healthier place with greater opportunity and justice for all of us. This comprehensive body of international law, including human rights law, is one of the UN's great achievements. It has close links with UNESCO, WHO, UNICEF, FAO.

World Trade Organisation WTO deals with the rules of trade between countries. Its main function is to ensure that trade flows as freely as possible. They are often called in to deal with disputes between countries that have previously made trade agreements. The goal is to help producers of goods and services, exporters, and importers conduct their business without exploitation.

World Bank The World Bank is a financial institution which provides loans to developing countries for capital programs (money making). Its official goal is the reduction of poverty, with all its decisions being guided through a commitment to the promotion of foreign investment and international trade, as well as the facilitation of capital investment.

Trans national Companyhttp://www.youtube.com/watch?v=jDASb6DfRqE

A company with its headquarters in one country owns factories in one or more other countries and sells its products globally. The main priorities of a TNC are profit driven. They are always looking for the highest profit margins. This often means their factories are in LEDC’s to make the most of low wages and often have headquarters in MEDC’s.

Key Idea 2: The role of global institutions

Key idea 3 – What is the affect of Globalisation on different groups of people

Impact on men in the developed world Impact on women in the developed world

In the UK, fewer full time jobs in secondary industries, and more part time tertiary jobs than 50 years ago Men in the East end of London have reduced access to secondary jobs in car manufacturing that their fathers did

Women in developed countries have increased access to flexible work compared to 50 years ago when more jobs were labour intensive- so now women are more equal

Impact on men in the developing world Impact on women in the developing world

Many men in developing countries have to leave their rural homes and children with elderly relatives in countries like China, to work in factories in urban centresMany men in developing nations feel work is better paid and more consistent in factories compared to farming which can be affected by the weatherWomen and men in the developing world have access to urban secondary and tertiary jobs

Many women in countries like Bangladesh work in ‘sweatshops’ for TNCs, stitching clothes for minimal pay, in tough conditions with limited or no breaks Women and men in the developing world have access to urban secondary and tertiary jobsWomen in the developing world have increased access to education Has meant thousands of women in Kenya have access to land which previously they did not under Kenyan law

Key Idea 4: Globalisation is a wonderful thing or is it?Arguments for Arguments against

Helps LEDC’s develop and have efficient economies.

More MEDC’s; more countries can become more powerful and shares the worlds wealth more equally

LEDC’s become more industrialized – have control of their own economies

When TNC’s set up a factory in a country local people are getting more money, not a lot but still more.

More countries can benefit from a more diverse culture e.g. Bollywood

Learning new skills

TNC’s pay taxes in countries which help LEDC’s infrastructure

Improving working conditions in LEDC’s – many big companies have ethical trading codes (e.g. Accessorise and Body Shop)

Sharing good practises

Quite often they are taking jobs that people don’t want to do in MEDC’s

Breaking down barriers between countries and promoting multicultural societiesThe company has provided clean water supply and electricity in the local area.LEDC workers can now afford to send their children to school

Stops/squashes originalities and different cultures within countries.

Why does poverty still exist if LEDC’s are developing more efficient economies?

Causing damage to the environment e.g. plastic bags

Most profits return back to the TNC countries and branches in LEDC’s are not benefiting.

LEDC’s don’t have much chance to develop their own industries.

TNC’s Invests in countries and then move away and create short term benefits but more poverty in the long run

In LEDC’s workers are learning new skills that aren’t really helping and are dumbing down clever people, semi-skilled, unskilled jobs.

In MEDC’s people are losing their jobs because companies are moving to places where wages are cheaper

Wages are so low their not really benefiting.

TNC’s are not always investing in host country their just in it for themselves.Poor working conditions in LEDC’s - Long hours and a long working week - No health and safety- Low wages- No unions - limited rights- Many people are available to work so the TNC can fire and rehire anyone they want- Dorms are shared by 20+ workers and disease/illness can spread very quickly

Key Idea 5: How & why have patterns of international trade and Foreign Investment changed over time?

International trade is the movement of goods and services (e.g. workers / banking) across borders and therefore between countries.

Foreign direct investment (FDI) is when a company invests capital (spends its money / uses its resources e.g. workers & expertise) in a different country by either building facilities (e.g. factories) or buying other companies. (e.g. Walmart in the USA now owns ASDA in the UK.)

Goods & services are the products that are traded between between different countries e.g. cars, electronics, food or financial services like insurance e.g. Toyota cars manufactured in Japan are sold in the UK.

Capital flows are the movement of capital between countries e.g. American companies (Nike) spend money building factories in China so they can get their products manufactured cheaply.

Why has international trade grown so rapidly?Lower and Faster Transport Costs.

Containerisation - Most goods now arrive from Asia in containers which are easier to transport to ports, to load onto ships and then unload at the other end. Each container is bar-coded so machines rather than people can identify its contents and where it needs to go

Shipping – ships transport over 90% of our goods and have become much larger yet only need small crews. They are also extremely fuel efficient reducing fuel consumption

Aircraft – Transport by aircraft is more expensive than by ship so only 0.2% are transported by Air. However more high value goods like electronics, medical supplies and fruit and veg is transported by Air as it is much faster.

Global trade has also increased because of the growth of these (TNCs)!

Named Example 4: Nike a Secondary TNC and an example of a TNC who has merged with other companies.

Nike started in 1964 when Phillip Knight began importing running shoes From Japan, where labour was cheap. Today is valued at over $10billion.

Nike has its head Office in the USA and all design is carried out at the Oregon head Office but though decision making are kept in the USA most Asian outsourcing countries get the less profitable production activities.

South Korea, Taiwan 1970’s : Nike was attracted by cheap labour so instead of owning its own factories it outsourced production to these countries. China 1980’s: Nike began production in China to take advantage of cheap labourThailand and Indonesia late 1980’s: South Korean companies, with whom Nike had developed along term relationships moved operations south t Thailand and Indonesia in search of cheaplabour.Vietnam 2000: Now that China’s currency is worth more , it is cheaper to make many items inVietnam.Nike bought Converse in 2001 due to Converse going bankrupt and Umbro in 2007 – This is know as a Merger.

Since 2000, many campaigners have encouraged Nike to improve working conditions for workers in ‘sweatshops’. Nike now publishes data about supplier inspections on its websites.

It is important to bear in mind that one of the reasons Nike and other TNC’s are attracted to these South East Asian countries is because these countries already had reasonably good infrastructure. Also the labour force is often very hard working and many are quick to learn new skills. There are also no trade unions or few workers rights so it is easy for workers to become exploited

Named example 5: A state-led company and its investment

Sinopec is a Chinese oil & gas company founded in 2000

In 2009 it was ranked the 7th largest company in the world

In 2013 they bought (invested) $3.1 billion in exploring oil & gas in Egypt

In 2004 Sinopec invested heavily in offshore oil & gas exploration in Gabon (Africa)

In 2005 Sinopec bought oil fields in Sudan and began exporting oil back to China

In 2012 Sinopec invested $2.45 billion in 20 oil fields in Nigeria

Named Examples 6: TNCs in Tertiary Sector

Case study on BT (a TNC in the tertiary sector)

BT is a British based company it is one of the worlds largest telecommunications companies in the world.

It operates in over 170 countries

BT is an example of Footloose company because it can locate anywhere as long as it has access to high quality communication links.

Outsourcing is when services are moved to a location where wages are lower

It outsources :Call centres in IndiaSoftware development in Bangalore and DelhiCompany Accounting – Silicone Valley in Bangalore

However has lead to unemployment in the UK as call centres are located abroad.

Creates jobs for English Speaking graduates and in turn attracts other companies to locate there so the whole area benefits form the multiplier effect.

Named Study 7: Impact of Deindustrialisation on the UK.

Reasons forDe-

industrialisation

Greater competition from countries such as China and India

Reduced demand for traditional products due to new technologies

Mechanisation has increased productivity and reduced the number of workers needed

Deindustrialisation is the decline in manufacturing (secondary) industry and the growth in tertiary and quaternary industries.

Economic impacts Social Impacts Environmental Impacts- use to be a large shipbuilding area but has declined over the years- Loss of personal income- Loss of taxes to national and local governments- Rising demand for income support services-Loss of income in the local areas due people’s lack of spending power (cant afford to buy things)-Changes employment structure of an area as there are more jobs in the tertiary and quaternary sector

- Family breakdown - Alcoholism and crime- Permanent unemployment

Positive:-More available land-Less water used in industrial processes-Less energy required for machines-Reduced traffic congestion-Reduced noise and air pollutionNegative-Empty factory buildings-Good manufactured further away = transport issues

Globalisation – past questions1. Suggest one reason why countries with a high percentage of people working in secondary sectors also have a high GDP per capita (2)2. Describe the relationship between GDP per capita and the percentage of people working in secondary sectors (2)3. Explain why international trade has grown so rapidly over the last 50 years (6)4. Explain how the growth of secondary sector employment in developing countries can bring both benefits and problems (4)5. Describe the negative impacts of globalisation on people in the developing world (4)6. Examine the positive and negative impacts of globalisation on different groups of people (6)7. Toyota opened a car factory in Derby in the UK in 1992. Suggest two benefits this may have brought to the local people (2)8. Toyota’s research and development sites are mostly in developed countries and why Toyota locates some factories in developing

countries (4)

Globalisation

Good Luck