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globalisation

Globalization

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We now communicate and share each other's cultures through travel and trade, transporting products around the world in hours or days. We are in a huge global economy where something that happens in one area can have knock on effects worldwide. This process is called globalisation.

What is globalisation?

Globalisation is the process by which the world is becoming increasingly

interconnected as a result of massively increased trade and cultural exchange.

Globalisation has increased the production of goods and services. The biggest companies are no longer national firms but multinational corporations with

subsidiaries in many countries.

Globalisation has been taking place for hundreds of years, but has speeded up enormously over the last half-century.

Globalisation has resulted in:

∙increased international trade

∙ a company operating in more than one country

∙greater dependence on the global economy

∙freer movement of capital, goods, and services

∙recognition of companies such as McDonalds and Starbucks in LEDCs Although globalisation is probably helping to create more wealth in developing countries - it is not helping to close the gap between the world's poorest countries and the world's richest.

The animation shows how wealth is distributed. Click on the income brackets to see where the richest and poorest countries are located.

Reasons for globalisation

There are several key factors which have influenced the process of globalisation:

∙Improvements in transportation - larger cargo ships mean that the cost of transporting goods between countries has decreased. Economies of scale mean the cost per item can reduce when operating on a larger scale. Transport

improvements also mean that goods and people can travel more quickly.

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