KS3 GEOGRAPHY NOTES

MR. WAMBUA

Globalization, trade and interdependence

Globalization and global trade

Globalization has made the world a smaller and more connected place. Multinational
corporations, increased global trading and the internet have brought people closer together.

Globalisation

The world is now a very small, interconnected place, as a result of globalisation. This term is
used in human geography and refers to physical and human processes that extend across the
world.

Globalisation is not a new term. People have travelled, traded and shared ideas for thousands of
years and there are many global linkages, ie people in one country are connected in many ways
with people in other countries.

In recent years the impact of globalisation has become very clear. It can be seen in the following
ways:

• communication between people in different parts of the world can be instant

• improved transport and communication links have increased trade, the sharing of ideas
and the spread of cultures
Factors that encourage globalisation

Factors that encourage globalisation include transport and ICT developments.

Transport developments:

• Container ships make transporting bulky goods quick and easy.

• Air transport means people and goods move quickly from one place to another. In recent
years the cost of air travel has reduced.
ICT developments:

• The internet allows people and businesses to communicate instantly.

• Satellite communications allow a global view and communications links even in very
remote areas. They enable TV and telephone communications.
• Mobile phones enable people to communicate and to access the internet wherever they
are.
• Social networking brings people from all around the world in contact with one another.

Global trade
Global trade is the result of uneven distribution of materials and resources across the world. No
single country has everything it needs and so countries need to trade with each other. Countries
that rely on each other to trade goods and services are interdependent.

Sometimes, countries group together to help increase the volume of trade. The European
Union is one example of a trading group (or trading bloc).

The global pattern of trade is uneven because:

• most of the valuable trade happens between more economically developed countries
(MEDCs)
• MEDCs generally import low-value goods from less economically developed countries
(LEDCs)
• there is little trade between LEDCs, partly because they may trade similar products
• newly industrialised countries (NICs) are playing a larger role in world trade
• a lot of trade happens through transnational corporations (TNCs) with a head office in one
country, operating in many countries
Transnational corporations

TNCs or multinational corporations (MNCs) are companies that operate in more than one
country. They often have factories in countries that are not as economically developed
because labour is cheaper. Offices and headquarters tend to be located in the more developed
world. Unilever, McDonalds and Apple are all examples of TNCs.

When a TNC locates within a country, there are advantages and disadvantages.

Advantages of TNCs locating in a country include:

• creation of jobs
• stable income and more reliable than farming
• improved education and skills
• investment in infrastructure, eg new roads - helps locals as well as the TNC
• help to exploit natural resources
• a better developed economic base for the country
Disadvantages of TNCs locating in a country include:

• fewer workers employed, considering the scale of investment

• poorer working conditions
• damage to the environment by ignoring local laws
• profits going to companies overseas rather than locals
• little reinvestment in the local area
• factories are often footloose and jobs insecure. If labour costs increase, the company may
move elsewhere
• natural resources being over-exploited
The global chain

A product has a series of stages, linked from design to purchase. Each link in the chain may
happen all in one location, or be spread globally. Large companies often have very complex
chains. A company may also outsource some of the production, paying another company to
make part of the product.
For example, HP laptops are assembled for sale in Kunshan, China. Manufacture of each
laptop's printed circuit board (PCB) is outsourced to a company in Penang, Malaysia - this is
called the first tier of outsourcing. The PCB requires parts, such as memory chips or a cooling
fan. These can be sourced from other Malaysian factories and firms - this is called the second
tier of outsourcing.

Because even the wire, screws and plastics used in the manufacture of each component part will
need to be sourced separately, there are additional tiers of outsourcing.

The interactive graphic outlines a simple global chain.

Impact of global trade

Some developing countries have benefited more than others from global trade. Developing
countries welcome global trade because it brings jobs and investment. The World Bank suggests
that trade reforms have reduced poverty in some countries, eg China, India, Uganda and
Vietnam.

In other parts of the world, there have been fewer benefits of global trade. For example, many
countries in Africa have failed to benefit from globalisation because of unfair terms of trade, the
actions of TNCs, poor government or unfavorable physical geography, eg landlocked countries.

Ethics of global trade

Current trading arrangements can mean some producers are disadvantaged when trading
globally. They may not be able to receive a fair price for their products, or may be working in
conditions that compromise their basic living needs. To try to develop a fairer trading system,
many organisations have adopted the principles of fair trade. They aim to ensure:

• a fair price is paid for their product

• there are opportunities to improve living standards
• a stronger position for the product in the global market
• opportunities to invest in their local community
The global supply chain is complex, and it may be difficult to ensure that every layer in the
production meets ethical and environmental standards.

Global trade and the environment

Some developments, such as the internet, reduce the need for travel. However, producing goods
on a global scale can increase the carbon footprint of these products.

Keeping to strict environmental laws, which some countries have, is expensive. A company could
locate to a country that has more relaxed environmental laws but while this may increase the
profit the company can make; it will cause more harm to the environment.
The European Union
The European Union consists of 28 countries and, as of 2014, 18 of them share a currency -the
Euro. The EU works to establish political, economic, transport and communication links within
Europe.

Links within Europe

Political links

In 2014, 28 countries of Europe were member states of the European Union(EU).

All member states of the EU aim to work closely with other members and there are some laws
that apply in an EU country because it is a member. The European Council is made up of the
heads of states of EU countries and,in 2014, the European Parliament consists of 756 MEPs
(Members of European Parliament) from EU countries. All member states are represented in
these groups. The UK has over 70 seats in the European Parliament.

The EU also sets goals and targets for looking after the environment. One initiative is a policy
developed in 2008 to combat climate change. It aims to:

• cut greenhouse gases by 20 per cent by 2020

• cut energy use by 20 per cent by 2020
• make sure that 20 per cent of energy use comes from renewable sources
Economic links

The Euro is a form of currency. Many EU members use it because it helps to make trade easier
between member states. The group of countries that use the Euro are called the 'Eurozone'.
Outside of the EU, the state of other countries' economies in Europe has continental and global
effects. For example, in 2008 there was a financial crisis in Iceland. Iceland is not in the EU but
this still affected many European countries.

Transport links

Transport links have increased between European countries due to:

• The rise of budget airlines, making short-distance flights more economical.

• The Channel tunnel, Europe's longest tunnel, built in 1994. It goes under the sea between
England and France and was built for high-speed trains.
• The EU allowing freer movement of people between member states.
Communication links

Communication links allow information to be exchanged between people in different countries,

such as:

• mobile phones
• internet
• satellite TV
There are only three time zones in Europe, which means most business hours in the week
overlap between countries.

Politics of Europe

The European Union is a group of countries that work together to help encourage economic
prosperity and solidarity between member states. The hope is that by working as a group, other
countries will listen to it.

The EU aims to:

• encourage economic and social progress

• ensure every citizen has the right to move around freely within the EU and have a vote
• encourage countries to live in safety and not threaten war
• support the development of laws to help protect people's rights
• speak on behalf of its members to other countries
To be a member, a country has to agree to certain rules. These rules state that the country
must:

• have a democratic government

• recognize the rule of the law
• protect minority groups
• be economically strong enough to cope in a global trading market
Money in the European Union

How is the European Union funded?

The EU is funded in a variety of ways:

• From the money it collects from import taxes. These are taxes collected by a member state
when a good or product enters the country.
 • Each state pays the EU around one per cent of its Gross National Income. This way, the
poorer countries pay less than the wealthy countries that have higher incomes.
• The EU gets a share of the VAT people pay.
Where does money from the European Union go?

• Encouraging growth and employment, eg areas such as Cornwall in the UK have

received regional aid to help boost tourism and create jobs.
• Rural development and agriculture.
• Global concerns, eg funding projects to reduce poverty in countries outside of the EU.
What is the advantage of a common currency: the Euro?

As of 2014,the official currency of the EU is used by 18 of the 28 member states. These 18

countries form the 'Eurozone'.

There are advantages of being in the Eurozone:

• it saves money as you do not need to change currency when travelling between two
countries that both use the Euro
• it prevents a single country in the Euro being affected by large changes in exchange rates
• it helps reduce the price difference between the same product between countries in the
Eurozone
There are disadvantages of being in the Eurozone:

• people feel that they lose some of their identity

• people feel that they are giving too much power to the European Union
• if one country in the Euro has a crisis, it can more easily transfer to other countries
Globalisation of sport
In addition to being entertaining, global sports can bring significant social and economic benefits
to a country. Events such as the World Cup and the Olympics can help revive and regenerate
areas.

Benefits of sport

Sport is often called a 'universal language' as sporting activities link many countries. Many
sports can be played in different settings regardless of the development of a country.

Participating in sport benefits a person's health. It has other benefits, too:

 • It increases social contact between groups of people.
• It may help to raise an area's image or identity.
• It can help to regenerate an area.
• It can bring money into an area. Spectators may spend money before and after the event.
Related industries gain custom.
• It can help raise money for charity, eg the 'Race for Life'.

The sporting environment

This is where sports happen. Some sports require a natural environment, eg sailing, while
others need special facilities built by humans, eg athletics or tennis.

Sports such as a city marathon or a football match tend to take place in urban areas.

Other sports may take place in rural areas. Skiing and mountain biking are two examples of
sports suited to rural areas.

Sporting success

There is also a link between the size of the local population and the potential success of a team
or event. The larger the population, the more people there are to come to an event. The greater
the support from people, the more money the event gets. With more money, better players and
equipment can be bought. This, in turn, attracts sponsorship.

Global sporting events

A number of sporting events happen on a global scale. Examples include FIFA Football World
Cup, the Olympics and the Winter Olympics.

Each of these events happen every four years and any country that qualifies can take part. Who
participates and who wins can follow geographical patterns.

Factors affecting sporting participation and success of a country

• Resources available. One way that sport can be encouraged is to make resources and
coaching available to competitors. Sports that require expensive infrastructure, eg a
velodrome for cycling, tend to be dominated by more developed countries that can afford
the investment.
• Culture of the country. Some cultures are strongly linked to a sport. The USA has strong
links with baseball and Japan with martial arts.
• Climate. Areas which have cold, wintery conditions for some or most of the year can be
more successful in sports such as skiing and bobsleigh.
• The identity of the country. A country is likely to invest in resources for sports if they
see this as a way of gaining international recognition, investment and trade.

The globalisation of sport

English football

Changes in sport can reflect global changes, ie globalisation can impact on a national sport.

Players in the English football Premier League demonstrate how global influence has become
greater over time. Over the last 20 years the average number of foreign players has gradually
increased within the league.

Player origin in the Premier League: 1989-90 and 2009-10

Reasons for the globalisation of football players within the Premier League include:

• More frequent, faster travel options for players from abroad.

• Improvements in technology increases global awareness of potential players.
• Television coverage brings high-profile leagues to a greater audience, so more people are
aware of the English clubs.
• Pre-season global tours offer high revenue for the clubs, and increases interest from
abroad.
• Trading globally is a pattern in business. Buying players from abroad widens the available
talent base.
• Selecting players from abroad with the same skill level may be cheaper. This uses
opportunities presented by the global market to help reduce costs.
• Purchasing of players from abroad can increase income for the club, eg club merchandise
will be bought by people supporting their home player who is now playing in a Premier
League club in England.
Sport - a global industry

Many industries are involved when a sporting event is held. The types of industries can be
classified as primary, secondary, tertiary or quaternary.

Examples of industries involved in a football match include:

• primary - farming the turf for the pitch

• secondary - manufacturing the footballs and kits
• tertiary - groundsmen and ticket sellers
• quaternary - designing new ways to prevent ticket fraud
The football industry, like many others, aims to maximise profit. This means that decisions can
be based on economic reasons, rather than social or environmental reasons. Buying footballs or
new kit has implications. Footballs are manufactured where the costs are cheapest. Over 75 per
cent of footballs are made in and around Sialkot, Pakistan, where people are willing to work
longer days, for less pay. This means they don't have time to get to school to learn new skills, so
it's harder for them to get a better job. It also means that these footballs need to be transported
to wherever they're needed in the world. This transportation can have negative environmental
impacts.

END.