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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

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Globalization

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  1. Globalization By: Allison Chen

  2. Overview • “Globalization is a process that results in the growing interconnectedness of the world” • Driven by technological innovations • Effects similar to chaos theory

  3. Main Controversies • Trade • Environment • Media • Development • Women • Investment • International law • Technology • Culture • Migration • Human rights • Energy • Education • Health

  4. 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

  5. Volume of World Merchandise Trade Growth

  6. 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

  7. 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

  8. 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

  9. 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

  10. 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

  11. 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

  12. 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

  13. Major Languages Spoken Around the World

  14. http://apps.npr.org/tshirt/#/title

  15. 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

  16. 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

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