GEO 103 – Class 2 – GlobalizationSlide 3Specialization of Economic Activity)Drivers of globalization?Globalization (continued)Globalization (continued)Eric Whitacre: A virtual choir 2,000 voices strongGlobalization (continued)(textbook pg. 13)Globalization of services and tourismConsequences of globalization?Slide 14Slide 15Slide 16Slide 17Going global –McDonald’s commercialsGlobalization versus Local DiversityCARIBOU COFFEE –Slide 21(6 mins of branding Coke)Starbucks at a glanceSlide 24Slide 25Slide 26Global or Local?Slide 28Slide 29GEO 103 – Class 2 – Globalization1Globalization 2Globalization –”the key agent of change, the dynamic force driving the process of global integration” T. Friedman, The World is FlatCommunication, transportation, information- changing the integration of the human race. Is the world losing its cultural differences?3Definition of Market buyers and sellers → determined by price → price is determined by supply and demandThe goal of market is profit = the difference between revenues and costsImportance of market → leads to specialization of economic activitySpecialization of Economic Activity 4EngineeringRaw material ExtractionProductionStorageOffice functionsMarketingManagementFinanceGlobalization (video)5Complex definition: set of world processes that make the world economy and various societies of this economy more integrated and interdependent.  - shrinks space by increasing access and reducing transport times/distance“It was born when the Wall fell in 1989.It’s no surprise that the world’s youngest economy– the global economy– is still finding its bearings… Many world markets are only recently freed, governed for the first time by the emotions of the people rather than the fists of the state…The spread of free markets and democracy around the world is permitting more people everywhere to turn their aspirations into achievements. And technology, properly harnessed and liberally distributed, has the power to erase not just geographical borders but also human ones…the world holds great promise. In the meantime, no one ever said growing up was easy.”Wall Street Journal 10/11/98Drivers of globalization?6Search for markets www.richs.com Improved technologies (transportation/communication)Decreased economic barriers (increased trade, investment)Multinational corporations expansionGlobalization (continued)Globalization of culture Culture: body of beliefs, customs, traditions, social forms, material traits constituting a distinct social tradition of a group of peopleGlobalization -> leading to increased cultural homogeneityImproved communications and transportation promote global consumer cultureAll people do not have equal access to globalizationDistinctive local cultural traits threatened by global diffusion of consumer culture (synonymous with Americanization)International consumer productsBlue jeans, Nike, Coca-cola, Pepsi, Marlboro cigarettes, McDonalds, Lady GagaGlobalization (continued)Globalization of telecommunicationGrowth of global digital telecommunicationTelevision, cell phones, InternetDevelopment of ICT has accelerated pace of globalizationGeneration youtube http://www.youtube.com/watch?v=oDrw77bMALgConsumers use the internet to gather informationNot ubiquitousGaps in access to technologyEric Whitacre: A virtual choir 2,000 voices strong9http://www.youtube.com/watch?v=2NENlXsW4pMGlobalization (continued)Globalization of the economyTransnational corporationsForeign direct investment from core regionsGlobal specialization in location of productionTertiary sector International finance, legal (advanced producer services)Services (retail, wholesale, teaching, government, medicine, law, recreation)Office functionsTourism(textbook pg. 13)11Globalization of services and tourism12US business service exports responsible for 1/3 of foreign revenues. Larger than auto exports- e.g. legal counsel, consulting, accounting, marketing, computer servicesTourism – manifestation of globalization12% of world GDP in 2009Niagara fallsForbidden CityGrand Bazaar, IstanbulConsequences of globalization?13Deregulation, less government intervention gives rise to new areas of growth (e.g. Asia)Globalization of culture: Facilitates the globalization of consumptionDistance no longer matters?Impact on trade -> protectionism?All of the above dominance of western civilization over developing countries  creating a homogenized landscape.Globalization and homogenization: guess where?NYC Times Square14TorontoArchitectural skills marketed throughout the world  homogenization of office buildings15Toronto NYCTNCs – global spaces16Does globalization mean the death of distance and local places? (Globalization vs. local diversity = glocalization)Geography’s emphasis on local diversityLocal diversity arising from:Loyalties are subnational levels (local, regional, national) e.g. local identities http://buffalofirst.org/Locality and place matter because most economic problems are still local (e.g. decline of rustbelt, Buffalo’s economic growth, unemployment arising from plant closures)Many companies still serve local markets (see HSBC’s advertisement)L117Going global –McDonald’s commercials18Japan http://www.youtube.com/watch?v=K88g62v9r0IRussia http://www.youtube.com/watch?v=0QVEcltAxQUIndia http://www.youtube.com/watch?v=21wsqNqqqsgGlobalization versus Local DiversityMany current political, social and economic problems form tension between those that promote globalization of culture and economy and those striving to preserve local traditions and economic self-sufficiencyWill coexist and shape each other (“glocalization”)In globalized world more people become aware that their well-being is dependent upon events and trends elsewhereCARIBOU COFFEE –20Rainforest alliance certified.www.cariboucoffee.com/page/1/about-our-coffee.jspA sustainable cup of teahttp://www.rainforest-alliance.org/multimedia/china-tea-video21Facts about Coca Cola (6 mins of branding Coke)22Coke is sold in 200 countries1.7 billion Coca Cola products are sold each DAY and makes over 3500 different beveragesIt has 48% of market share, while Pepsi has 31% (2009)The red and white COKE logo is estimated to be recognized by 94% of the