GCSE Geography | Globalisation and the UK (UK Economic Futures 3)

Globalisation is the growth and spread of ideas around the world, and can include the movement or spread of cultures, people, money, goods and information. It has had a huge impact on the UK economy - more businesses in the UK than ever before are owned by companies that are based overseas, and in the same way thousands of British companies are operating in other countries.

The UK has been trading with other countries for centuries - globalisation makes it easier and more efficient, making the UK thrive as part of the global economy.

Globalisation has been aided by technological developments - transport and communications, particularly the internet, have helped this.

How has globalisation happened?

Television advertising has played a key part in the growth of globalisation - raising awareness of products and lifestyles from around the world, encouraging people to travel and try new cultures. This advertising role has largely been taken over by social media now.

Phone and internet communications have enabled us to connect with other people around the world more easily than ever before - we can conduct business meetings online with people thousands of miles away, we can conduct virtual business trips to observe practices in overseas branches without having to physically travel there and we can buy goods and services from the other side of the world with the touch of a button on our phones.

Developments in transportation means that goods can travel around the world faster than ever before and in greater quantities, with advancements in containerisation meaning that ships can travel between the UK and China in less than a month. There are currently approximately 5,500 container ships moving goods around the globe, and since 2000 the average vessel size has doubled with the largest ships able to carry 24,000 containers. Felixstowe is the UK's largest port and processes more than 4 million containers a year from around 3,000 ships (pictured below).

Benefits of globalisation for the UK

Globalisation has benefited the UK in many ways. Global trade enables the UK's economy to grow each year, which increases GNI - as an HIC the UK tends to export higher value manufactured goods, and import mainly lower value goods, such as food. This means that we have a trade surplus where the value of our exports are more than the cost of imports. Whereas most LICs have to spend more importing goods than they make exporting goods - this is known as a trade deficit, and is because they usually export low-value goods.

Globalisation also means that the UK population is able to buy cheaper goods because they are produced overseas where people are paid lower wages, so therefore cost far less to produce than if they were produced in the UK - and these savings can be passed onto the consumer. In addition, globalisation means that we can buy goods from all over the world at the touch of a button from online retailers - and these retailers are able to sell their goods for less money as they have fewer overheads than retail companies with physical shops.

Globalisation leads to foreign investment where overseas companies invest in the UK - this creates thousands of jobs and brings in new ideas and technology - this has also meant that we have moved away from traditional manufacturing in the form of heavy industry to high-value manufacturing, such as making parts to support the off-shore wind farm industry on the East Yorkshire coast (such as the turbine blades pictured below), which is highly specialised, so workers earn more.

Finally, globalisation has enabled migration to occur and the UK is now one of the most multicultural societies in the world. Many migrants are skilled workers who are helping to address the shortage of skilled professionals in certain industries, for example construction and healthcare. The NHS would struggle to function without migrant workers.

Drawbacks of globalisation for the UK

However, globalisation has also had a negative impact on the UK. Manufacturing has shifted to NEEs such as China, Indonesia and Taiwan where companies can take advantage of cheap labour, meaning they can make and sell goods for less. Firms in the UK have to pay the minimum wage so they can't compete with this low-cost production, and as a result factories have closed down and thousands of jobs have been lost.

In addition to the loss of manufacturing jobs, many service jobs have also been lost in the UK as companies outsource some of their functions overseas. Many large UK companies have chosen to outsource their customer support services, using call centres based in countries such as India (see image below), who will respond to questions and concerns using telephone calls, emails and instant online chat facilities. This saves businesses a huge amount of money, and they also benefit from workers who can work during various time zones or speak different languages. AI also means that some of this is now done by chat-bots instead of real people. Outsourcing of customer service support has meant huge job losses in the UK.

Finally, globalisation has meant the gap between low-paid unskilled work and high-paid skilled work has increased - globalisation has led to the creation of many high-tech research and development jobs, as well as specialist services, such as IT and finance, meaning that those who are highly qualified are able to earn more. However, at the other end, people doing low-paid jobs have little chance of negotiating better wages when their jobs can easily be outsourced overseas.