Impacts of Globalisation (Edexcel IGCSE Geography)
Revision Note
Written by: Jacque Cartwright
Reviewed by: Bridgette Barrett
Benefits & Costs to People
Globalisation has generated benefits and .costs for many people but at different levels
Some have benefitted more than others with the poorest tending to be the losers
However, it can be argued that without globalisation the poorest would be worse off than they are now, as they job opportunities and income from inward investment from TNCs
Countries such as China, Brazil and India have transformed themselves from developing to emerging economies which has directly benefitted their population
Gender gap within individual countries is generally lower in more globalised countries
Skilled workers are in demand and benefit from globalisation more than unskilled workers
Benefits and Cost of Globalisation to People at a Variety of Levels
| Benefit | Cost |
|---|---|---|
Local Level | Cheaper products available for people Greater choice of goods Bigger export market for domestic manufacturers Integration of cultures - multi-culture Education and skills are improved More freedom of movement Spread of technology and innovation A higher standard of living Availability of housing, sanitation, food and water is better Gender equality and gender pay gap closing in developed countries | Small local businesses cannot compete with global companies Labour drain - skilled workers migrate elsewhere leaving unskilled or no workers behind Dependence on single TNC employment Worker exploitation/cheap labour Closure of TNC leaves high unemployment rates Cultural dilution or loss of cultural identity Environmental cost of increased production, trade and growth Pollution impacts the health of people Daily living costs increased |
National Level | Higher levels of incoming revenue from tourism, exports and imports Growth of improved health care, infrastructure, social care and education Social mobility is greater - access to higher education and senior leadership roles TNC offer apprenticeships and incentives for progression | Increased levels of disparity between places - some towns and cities will benefit more from government policies Social mobility is limited to urban areas, people in rural areas need to migrate TNCs control a large labour force and can 'black list' workers, effectively preventing people from working elsewhere Industrial growth impacts the environment - burning fossil fuels adds to global warming and pollution Growth of urban slums |
International Level | Skilled workers are in demand and can move relatively easily between countries Higher levels of income and quality of life Access to wide levels of skills and research International trade routes and foreign investment improve opportunities | Movement of people, transport ownership and loss of biodiversity increases globally The impact is greater on developing countries, particularly remote rural areas, increasing the development gap Decisions made elsewhere do not consider local or national identities The movement of skilled workers and researchers leaves an imbalance in developing and emerging countries, reducing the potential for further development unless they pay higher wages, leading to higher global costs |
Benefits & Costs to Countries
TNCs are key in globalisation
They link raw materials with manufacturers, research and development opportunities and products with global markets
Global marketing establishes TNCs as 'the brand' to have
However, TNCs answer to shareholders and need to maximise their profits, usually at the cost of their workers
TNCs therefore, can impact positively or negatively countries
Benefits and Cost of Globalisation to Countries at a Variety of Levels
Benefits | Costs |
|---|---|
TNCs bring skills, opportunities, money and technology to developing and emerging countries | TNCs pay low wages, expect long hours and are generally exploitive, particularly of female workers |
Inward investment in host countries increases the level of development | TNCs are powerful and are not loyal to a host country's government - investment can disappear as quickly as it came |
Host country's infrastructure is improved by TNC or for TNC - access, communications, energy supplies etc. | TNCs can leave a country if global or local economies change or somewhere else becomes more profitable |
TNCs create jobs, allowing people to buy more and pay more tax | Profits 'leak' out of the host country either to open up new business elsewhere or are paid in bonuses and dividends to share holders |
Foreign currency is earned through exports | TNCs often ignore the environmental and social costs of their investment |
TNCs have a multiplier effect through encouraging other industries to grow up around them | TNC jobs are often boring, repetitive and don't develop skills - effectively trapping their workers into the company |
Examiner Tips and Tricks
Make sure you know your case study of the global operation of a TNC in one developing country
You need to be able to identify the costs and benefits to the host country as well as to the TNC's own country of origin
For example, you could produce something along these lines on the USA based company Nike
Country | Cost | Benefit |
|---|---|---|
Vietnam | Exploitation of workers Poor working conditions Child labour | Substantial employment Pays higher wages than local firms Status of brand encourages other TNCs to invest |
USA | Indirect loss of jobs as manufacturing is outsourced Balance of profit to cost isn't passed onto the customer Company image damaged due to outsourcing | Bigger profits made as manufacturing costs are lower High level skills in design, R&D in demand |
Remember to keep it simple and use facts and figures to keep it 'real' and not a generic case study
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