Globalisation is the process in which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. In other words globalisation is the way companies, ideas and lifestyles are spreading more and more easily around the world due to two main reasons. Firstly because of the technological changes that allows people, goods, money and mainly information and ideas to travel the world much faster than ever before. The other reason is because of the liberalisation of the world markets, which is greatly increasing levels of trade between different parts of the world.
Governments around the world have relaxed laws restricting trade and foreign investment, with some governments offering grants and tax incentives to persuade foreign companies to invest in their country. Globalisation affects everybody and it influences people on what food they eat and what clothes they wear. Globalisation can link someone from the UK to someone in a totally different continent. For example the jeans that you wear can have up to 15 countries involved in producing it.
As well as that when you make a decision on what clothes you are going to buy when you go out shopping, you can affect people thousands of miles away from you. This is because the clothes that you wear are not always produced at the country you buy it in, which I will talk about later. Globalisation has been taking place for hundreds of years, but it has speeded up enormously over the last half-century. Many things have helped speed up the process of globalisation, including transportation, telephones, the Internet and televisions.
Transportation helps people get from place to place and it has become cheap and quick. For example, UK people now holiday all over the world and people from other countries can travel to the UK to look for better-paid jobs. Businesses can more easily ship products and raw materials all over the world making products and services from all over the globe available to UK customers. Telephones and the Internet can help people contact each other all over the world, while television programmes made in a particular country can be watched by people in the other side of the world.
Televisions, telephones and the Internet have created a global village. For example, UK businesses can have a call centre in India answering calls from UK customers. Some people believe that globalisation is helping to create wealth in developing countries, while others think otherwise, though I will talk about this later. What is a TNC? Due to globalisation many businesses have set up or bought operations in other countries. When a foreign company invests in a country, maybe by building a factory or a shop, this is called inward investment.
Companies that operate in several countries are called transnational corporations. In other words a TNC is a company with many branches in many different countries. I bet all you fashion fanatics have seen or worn Nike clothing. But did you now that Nike is a very large TNC. If you think about it a lot of people all around the world know about Nike. This is because Nike is a big TNC with 47,000 shops selling its goods in around 140 countries around the world. TNC's like Nike can influence the food you eat and the clothes you wear.
Clothes or equipment that have Nike logos, or any other company's logo are known as branded goods. By looking at the brand goods or the brand name shoppers will instantly recognize the brand. TNC's just become bigger and larger as the years pass by. In fact, some TNC's are even more powerful than some governments, but I will talk about that more later. The growth of TNC's like Nike is an example of gloablisation. These are some of the most famous TNCs, which are instantly recognized. Most TNCs come from more economically developed countries such as the UK and the US. TNCs invest in countries all around the world.
They invest in countries, which have; cheap raw materials, cheap labour supply, good transport, access to market where goods are sold and friendly government polices. Though TNC's don't actually make products in the country where they are based in. Instead they look for factories in other countries around the world where they can get the things made cheaply in. They try to find factories in LEDCs were the wages are low. Nike is an example of a TNC that looks for factories were the wages are low, as it has goods made in about 30 different countries, which are mostly LEDCs.
TNC's like Nike don't actually pay the factory that makes the product much money, but factory owners have to accept it, trying to make a profit in the meantime. The factory owner normally forces his workers to work very quickly making the products with little pay, but the factory workers have to listen to the factory owner. They have to listen to the factory owner, as they have no choice due to the fact that they will be fired from their job, which means that they will not get any money at all.
They have to work in poor conditions as they have very little sleep, they can work up to 19 hours a day and they rarely have breaks. This is known as sweatshops. Though they have to keep their current job no matter how bad their conditions are, as there are not many well-paid jobs in LEDCs. As well as that if factories have no orders they don't get any money at all and they can get sacked without warning. This is a big point between the two sides of the globalisation and TNC's argument, but I will talk about this later.