Aspects of Globalisation

Aspects of Globalisation

The Organisation for Economic Cooperation and Development (OECD)

defined globalisation as,

'The geographical dispersion of industrial and service activities (for

example, research and development, sourcing of inputs, production and

distribution and the cross border networking of companies (for example

through joint ventures and the sharing of assets)

Economic activity is becoming organised on a global scale giving a new

international division of labour, with production, investment patterns

and movements and technology transfers all becoming global. In this

strategy, activities are established in many sites spread over the

world, based on a country's comparative advantage. A manufacturer

striving for the benefits of globalisation aims to secure the supply

of inputs by locating production of the resulting outputs in the most

favourable locations. Thus, labour-intensive production of components

will be situated in low wage areas, while the production of high

technology and high value added parts will require a skilled or well

educated workforce, and are therefore likely to be concentrated in

more capital-intensive locations.

Globalisation could be seen to significantly affect developing

economies, such as Ghana and Egypt. For example, according to

statistics, there has been a rise in these countries in manufacturing

employment and a fall in primary sector employment. Nevertheless, on

the other hand, globalisation has resulted in implications for

developing countries. For example, and largely on account of a loss of

international competitiveness over a long period of time, British

manufacturing ...

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...ds in 2001; however the U.K still remains a net

exporter of oil, though the supply may run out by the middle of the

current decade. In addition to this, the U.K still retains a

comparative advantage in goods such as chemicals. Nevertheless,

overall, due to the process of globalisation the U.K has seen an

absolute fall in manufacturing employment, to below 4 millions, which

has led to unemployment mainly of unskilled workers. Many workers have

been forced to re-train and work in the service or 'hi-tech' sectors.

However, innovation, productivity, technological processes and capital

investment have allowed U.K firms to compete with other firms on a

global scale in. Therefore it can be said that globalisation will

intensify the present need for the British economy to become more

competitive in price and non price terms.