4-1-3-scale-of-globalisation

Variation in Globalisation

Uneven globalisation

• Globalisation has affected places differently, which is due to a variety of reasons, such as:

  •  Variations in poverty

  •  Physical factors such as resource availability and accessibility

  • Government policies and attitudes for and against globalisation

Measuring globalisation

• Uneven levels of globalisation can be measured using a range of indicators and indices, which include:

  • KOF Index (The Swiss Institute for Business Cycle Research) produces an annual Index of Globalisation 

    • First published in 2002, it contains data from 1970

    • Measures the social, economic and political aspects of globalisation

    • Uses a wide range of data, such as participation in UN Peace-keeping missions to TV ownership

    • Countries are scored out of 100 and the higher the number, the more globalised the country is

  • Issues with KOF Index

    • This information is only available for 122 countries (2023)

    • Some of the indicators used are now outdated due to improvements in telecommunications

    • There is cultural bias in some of the indicators for example, the number of McDonalds

    • Trade indicators ignore the informal economy

    • It does not take into account environmental factors

  • AT Kearney World Cities Index 

    • First published in 2008

    • It aims to look at how countries cope with population growth and a shrinking world

    • Ranks cities according to their ‘business activity’, ‘cultural experience’ and ‘political engagement’

    • Data for this includes the number of TNC headquarters, museums and foreign embassies

    • It includes countries which account for 96% of the world’s GDP and 84% of the population

  • Issues with AT Kearney World Cities Index

    • Only includes 156 countries (2023)

  • Indicators include trade bloc membership, levels of migration or FDI

Transnational Corporations (TNCs)

Uneven growth of Transnational Corporations (TNCs)

• TNCs are vital to globalisation and help connect countries across the world

• However, some countries have benefitted far more than others from FDI from TNCs due to:

  • Unsuitability of some sites for production of goods e.g., accessibility, natural resources

  • Not enough market potential to attract large retailers due to low incomes or culture 

TNCs and glocalisation

•  TNCs try to build their global businesses through:

  • Offshoring: moving parts of their production process, such as factories or offices, to other countries to reduce costs (e.g. labour)

  • Outsourcing: contracting with a different company to produce goods and services they need

  • Global production networks: setting up chains of connected suppliers of parts and materials that contribute to the manufacturing or assembly of consumer goods

•  In an attempt to increase profits, many TNCs have adapted their products to suit local tastes, religion and culture, local interests, laws and lack of natural resources— this process called glocalisation

Lack of Globalisation

Switched-off places

• There are some places in the world, often LDCs that remain relatively switched off from the global networks

• Strong flows of trade and investment with other countries are absent in these countries

• Examples include North Korea and the Sahel region

  • North Korea has chosen to remain isolated from the rest of the world

  • The Sahel region experience many challenges such as the arid climate, desertification and poverty that has hindered their development and consequently their ability to connect to the global networks