Globalisation

So what has caused this increase in globalization? As well as improvements in transport such as larger and faster cargo ships, the development of the international telephone system, the internet and mobile technology has made it much easier to communicate with people in other countries. When importing goods from other countries, many governments imposed taxes, making items from abroad expensive. Organizations like the WTO (World Trade Organisation) have promoted the idea of free trade between countries, with the reduction of import taxes. This makes the goods cheaper to buy and so more trade is the result. Labor costs in some countries is much lower than in Britain so labor intensive industries like clothing and call centers take advantage of this by moving abroad.

Multinational corporations are also known as TNCs (trans-national corporations). These generally have their origins in MEDCs and quite often, they invest in other MEDCs as the market for their products is greater, however, some TNCs do invest in LEDCs. You need to learn the factors that attract TNCs to a particular country.

Positive impacts of globalization are numerous and include humanitarian, environmental and economic benefits. There is an increased awareness of events in far away parts of the world such as famines, wars and natural disasters meaning that aid can be sent quickly by MEDCs. An increased awareness of issues like deforestation and global climate change effects alerts more people that a return to sustainable development is necessary to ensure the future of the planet. Economically, inward investment by TNCs brings jobs and opportunities for local people and increased wealth for local economies. Finally, it means that ordinary people can experience foods and products that were not previously available to them.

On the other hand, globalization tends to benefit mainly MEDCs, the money invested by TNCs does not always benefit the local economy as profits are often sent back to the MEDC. Unscrupulous TNCs can operate with lower safety and environmental standards in many LEDCs, where laws to protect workers and the environment have not been made or are not enforced. In Britain, the textile industry, coal mining and steel manufacturing industry have declined severely as these products can be obtained much more cheaply from abroad thanks to globalization.