Unit 7: Global Interactions at the Local Level

Globalisation

“The growing interdependence of countries worldwide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and through the more rapid and widespread diffusion of technology” (source: IMF).

Glocalisation

A term that was invented to emphasize that the globalization of a product is more likely to succeed when the product or service is adapted specifically to each locality or culture in which it is marketed.

The increasing presence of McDonald’s restaurants worldwide is an example of globalization, while changes made to the menus of the restaurant chain, in an attempt to appeal to local tastes, are an example of glocalization.

Companies selling the same products worldwide glocalise their advertising.  The language that is used has to change, but further than that models/actors used need to appeal to more local ideas of beauty and fashion.  Iconic celebrities in one trading region may be relatively unknown in another & have to be replaced with someone one more appropriate for the local market.  Variations in the music used will vary from one continent to another.

Adoption of globalisation

Globalisation has affected most of the world in varying degrees.  Core regions of the worlds economy have embraced globalisation through outsourcing parts of the production process or service delivery and reaped the rewards of lower costs and often more profit.

Many of the worlds peripheral economies (particularly South East Asian and South American) have adopted aspects of globalisation through becoming links in the supply chains, offering cheap labour and close proximity to raw materials.

Many countries in Africa which have largely been marginalised from the globalisation of manufacturing have seen significant capital investment by TNCs in agriculture and mining.  With vast mineral reserves and rising commodity values many of the major mining TNCs have locations throughout Africa extracting gold, bauxite, diamonds and copper and oil.

An increasing global population is leading to rising food prices.  Africa has large swathes of under-used land that TNCs and foreign investors are purchasing or leasing to grow food for export or biofuels.  Whilst these operations may bring limited financial benefit to the countries in relation to the profits generated from establishing major manufacturing operations, they are an example of globalisation reaching even remote rural areas in some of the least developed countries of the world.

Through out the world in general, rural areas have been slower to adopt processes or aspects of globalisation than urban areas.   Rural areas tend to be slow to receive infrastructure investment and lag behind in internet provision.  This limits rural populations access to major aspects of globalisation and reduces the appeal for companies the locate in these areas.

Local Responses to Globalisation

In the last decade there has been increasing resistance to globalisation.  The food industry is an example of how consumers and civil groups have been trying to change things.

Local produce over imported produce:  This has been a major area of change as consumers have realised that through there own actions they can influence the supply chain.   Buying local produced food that has minimal food miles and supports local farmers has become a significant movement.  Even though it often costs more for locally produced food it is a price that many consumer are increasingly willing to pay.

Seasonal Produce: Linked to consuming local produce there has been a revival in eating seasonal products, rather than imported fruit and vegetables that are in season year round.

The benefits of local produced food (employment, lower food miles & the associated environmental damage) must be considered against its possible negative costs.  If the crop requires large amounts of chemicals to be used to produce it (fertilisers, herbicides etc), or uses vast amounts of water through irrigation, or large amounts of energy through heated green-houses these must be taken into account.

The reality of the world is that some places have an absolute advantage in the production of food types.  It makes no sense to try and produce bananas or lychees locally in the UK.  However, buying Argentinian beef or New Zealand lamb in the UK when it produces both of these in abundance and at a high quality seems unnecessary.

Alternative Options

The Fair Trade organisation has established itself in the major UK retailers.  Consumers pay more for a fair trade product in the knowledge that the growers/producers receive a higher price for their product.  This has been a response to the profit maximisation approach that TNCs take through minimum payments to producers.