Globalisation

Changing Employment Patterns

Employment sectors

The global economy is divided into four sectors, each involving a different types of employment:

Primary Sector
This sector involves people working with natural resources. The largest and most important activity in this sector is agriculture, but it also includes fishing, forestry, mining and quarrying.

Secondary Sector
This sector involves making new things. This could either be by manufacturing a good, such as a car, or constructing something, like a house or a road.

Tertiary Sector
This sector provides services for the population. The services include commercial services (shops and banks), professional services (solicitors and dentists), social services (schools and hospitals), entertainment services (restaurants and cinemas) and personal services (hairdressers and fitness trainers).

Quaternary Sector
This sector is mainly found in developed countries only and involves research, information and communication.

Clark Fisher Model

As a country develops, the sectors which people are working in are going to change which the Clark Fisher model shows.

There are three stages of development. These are:
  1. Pre-industrial stage
    • In this stage, the majority of people are employed in primary industries, agricultural working, fishing and mining.
  2. Industrial stage
    • Lots of jobs are created in factories and industries, e.g. steel, textiles, steel and engineering goods. Chemical and vehicle industries being to develop.
    • Secondary industries, such as manufacturing and construction, increase in importance in terms of the economy and employment and peaks in the industrial stage.
    • The tertiary sector also begins to grow while the primary sector beings to decrease
  3. Post-industrial stage
    • The tertiary sector, providing services to the population, becomes the most important sector and continues to grow.
    • The quaternary sector begins to make an appearance while the primary and secondary sectors continue to decline.

Employment Sectors

LICs, MICs and HICs

LICs: Low-income countries, least developed
MICs: Middle-income countries, more developed
HICs: High-income countries, higher developed

LIC case study - Ethiopia

The primary sector is the largest employment sector in Ethiopia. 75% of people work in this sector, mainly working in agriculture and as subsistence farmers who need the food to support their families. They will often work long hours and in harsh physical conditions to produce just enough food to for their family to survive on. There is a small amount of commercial agriculture, mainly growing coffee which is a major export crop.

The secondary sector is very small with mainly men working in factories receiving little pay. Foreign investment has created these jobs in textile and leather factories.

The tertiary sector accounts for around 15% of the population, men and women, working in services including tourism.

Due to Ethiopia's level of poverty and the lack of work which isn't farming, many people are working in the informal sector. People (including children) who work in this sector work on the streets of towns and cities trying to make some money by selling goods or providing services for passers by such as shoe polishing). The wide range of jobs in the informal sector aren't officially recognised and the people working in them are often subject to abuse and exploitation.

MIC case study - China

The primary sector is the largest employment sector in China, but unlike Ethiopia it also involves mining as well as agriculture. Coal mining, worked by men, is significant and mining accidents are common showing the consequences of weak safety regulations. Women will often work in farming.

The secondary sector is not as large as the primary sector but generates the most money; driving China's economy. Both men and women work in this sector, manufacturing goods which are sold around the world. The hours are long and the working conditions are quite unsafe but the pay is better than farming.

The tertiary sector is similarly large to the primary sector however people working in this sector and the secondary sector are earning more money, and are able to spend it on services and leisure. Although the working hours are long, the working conditions are much safer than those found in the secondary sector.

HIC case study - UK

The primary sector accounts for roughly only 2% of the UKs employment structure. There is very little fishing or mining and mechanisation in farms means there is no need for large labour forces on farms.

The secondary sector isn't as small as the primary sector but is still quite small at 18%. This is down to the deindustrialisation of the UK and the relocation of traditional industries. Despite there still being some factories in the UK, they are now very high-tech and automated reducing the need for a large work force.

The tertiary sector dominates the UK, with people using technology to work from home, known as tele-working. More than 2 billion people are self-employed and work from home, relying on phones, internet and computers. This technology has benefitted many people who live in rural areas who would have to make long commutes to go to work.

Overall, the working conditions in the UK are of a high standard thanks to strict safety regulations and trade-unions representing employees. There is also a national minimum wage and equal opportunities laws to ensure there is no discrimination on the basis of gender, ethnicity or age.

Globalisation and the global economy

There are three critical parts which are needed for the global economy to work and for globalisation to occur. They also provide links between the employment sectors and different parts of the world. These three parts are:

  • Networks - the things which link countries together, e.g.: transport networks, phones, internet and trade blocs, known as 'spider's webs'
  • Flows - the things which move through the networks, e.g.: raw materials, manufactured goods, money, migrant workers, information and aid.
  • Players - the organisations which influence the workings of the global economy, including transnational corporations (TNCs), the huge businesses empires, as well as many other global organisations.

The major players in the global economy

There are some institutions which are very influential in the spread of globalisation and the growth of the global economy:
  • World Trade Organisation (WTO), established 1995 - encourages trade between countries while ensuring it flows as smoothly, predictably and freely as possible.
  • International Monetary Fund (IMF), established 1945 - 188 countries working together to provide financial aid between countries and promoting trade and high employment to try and reduce world poverty.
  • World Bank - Aims to reduce poverty around the world by providing financial and technical assistance to developing countries

Impact of globalisation

Worldwide
  • More gender equality for women, however they still don't receive the same level of pay as men)
  • Working conditions have improved, i.e. health and safety, working hours, pay).
  • More skilled people thanks to new employment areas
  • More goods and services available to everyone
Developed world
  • Improvements in wages
  • Good working conditions
  • Products and services can be charged at high prices
  • More flexibility in working location, i.e. working from home, and when people work
  • Some job losses as companies relocate to the developing world. e.g. call centres, factories
Developing world
  • Their products and services are now available to a wider number of people in a greater number of places
  • Pay high prices for the developed world's products and services
  • Overall, wages are low and there is continuing exploitation of workers and child labour
  • The few who own land have benefitted greatly
  • Few people can afford the goods and services provided by the global economy.
  • The informal sector remains

Trade and foreign investment

Trade

Over the past 50 years, international trade has increased greatly. In particular, international trade has grown massively. In 2010, international trade was 48 times larger than it had been in 1970. Large companies, TNCs, have expanded and invested all around the world. Finance, insurance and banking companies have also recently been globalised offering their services all around the world.

The increase in trade around the world is down to several different reasons:
  • Transport - Improvements in transport around the world means it is now easy to transport goods around the world quickly and cheaply. These improvements include large container ships and air transport.
  • Communication - The developments in technology means it is now easier than ever to communicate with people in different countries. Undersea fibre optic cables and satellites now allow the use of email, phone, text and fax for communication between countries.
  • Trade agreements - Agreements between countries has made trade easier
  • TNCs - The growth of TNCs has increased the amount of trade between countries
  • International Monetary Fund (IMF) - The IMF has made it easier for state-led investment in different countries

Foreign Direct Investment (FDI)

FDI is when a company (normally a TNC) in one country makes an investment in another country. This investment could be buying a business or factory in another country, or expanding their own business in that country. They will make the investment to take advantage of cheaper labour or resources and increase their profit.

China investment in Africa

China currently has a huge demand for oil and natural resources and is now in search of these resources in Africa. They are investing a lot of money into the search of these raw materials, and part of this project involves building new infrastructure in Africa to transport these materials out of Africa. This includes building new roads, railways and ports. Despite this, critics say that all China wants is Africa's resources and is doing little to help Africa's development as most of the investment goes to Africa's governments, TNCs and Chinese companies, not to local companies. Also, the majority of the workers, close to one million, are Chinese and there are few local workers.

Transnational Corporations (TNC)

What are TNCs?

  • A TNC is a large company which operates in countries all around the world
  • In the past 20 years, TNCs have grown in number and importance
  • They cover many different industries
  • The headquarters of a TNC are usually found in 'global cities' such as London or New York
  • A TNC may have wanted to go global for various reasons:
    • take advantage of incentives
    • to spread business risk
    • to sell inside trade barriers
    • to reduce costs of buildings/land
    • to reduce labour costs
    • to be close to markets 
By Carolyn Davidson (Uploaded to Commons by HernandoJoseAJ)
(SVG based on the "swoosh" logo [1]) [Public domain], via Wikimedia Commons

Secondary sector case study - Nike

  • Nike was founded in Oregon, USA in January 1964 as Blue Ribbon Sports and was later renamed Nike in 1978. Its HQ is still in Beaverton, Oregon, USA
  • They produce and sell a vast range of sports clothing and equipment
  • They have offices in 45 countries and 700 stores worldwide
  • The majority of their products are outsourced and manufactured in Asia, but they also own some factories where their goods are manufactured.
  • The components for their goods are sourced from various different countries around the world.
  • Their annual turnover continues to rise
  • Nike maintains its market and reputation by sponsoring and promoting sports events and sports stars.

Tertiary sector case study - Tesco

  • Tesco is a retailer which sells various different products: food, clothing, toys, financial services, electrical goods and more
  • It started life as a grocery stall in East London and has since become the UKs largest food retailer and has expanded globally with 6000+ stores worldwide becoming the 3rd largest retailer in the world.
  • They employ 500,000 people worldwide
  • Despite Tesco being an international company, it is one of the few to have their HQ's in the UK
  • Outsources many products from all around the world
  • Working conditions and pay are good for its employees.