Lecture on Globalization and Economic Restructuring

Introduction to Globalization

• Globalization has led to significant changes in the world economy.
• Economic restructuring is occurring as businesses exploit global markets.

Movement of Production

• Core Countries: Production is moving from core countries to semi-peripheral and peripheral countries.
• Job Loss: Core countries losing secondary and some tertiary sector jobs.
• Offshoring: Relocating services/processes to foreign countries to cut costs by using cheaper labor and less regulation.

Outsourcing vs. Offshoring

• Outsourcing: Contracting external providers to cut costs and increase efficiency.
• Economies of Scale: Achieved by companies through larger scale production, reducing costs per unit.
  • Examples: Large agribusinesses, Walt Disney Company.

International Division of Labor

• Countries specialize in economic activities based on comparative advantage.
• Impact:
  • Positive: Increased efficiency and trade.
  • Negative: Economic restructuring can devastate economies (e.g., Detroit's de-industrialization).

Economic Restructuring in Developing Countries

• Special Economic Zones (SEZs): Provide incentives like tax breaks to attract foreign investment.
  • Free Trade Zones: Promote global trade by allowing tariff-free movement of goods.
  • Export Processing Zones: Focus on manufacturing for export purposes (e.g., Maquiladoras in Mexico).

Multiplier Effect

• Describes how investment can create a chain reaction of economic growth.
• Example: Apple's investment in India creates ripple effects in the local economy.

Production Methods: Fordism vs. Post-Fordism

• Fordism:
  • Mass production and assembly line methods.
  • Centralized production and standardized goods.
• Post-Fordism:
  • Flexible production methods adjusting to market changes.
  • Decentralized production; more custom goods.
  • Just-in-Time Delivery minimizes inventory costs but risks delays.

Economic Benefits: Agglomeration and Growth Poles

• Agglomeration: Clustering of industries reduces costs, utilizes infrastructure.
• Growth Poles: Areas targeted for economic growth (e.g., Silicon Valley, Dubai).

Conclusion

• Continued globalization and trade enhance interconnection between economies.
• Future sustainability of global practices is uncertain and to be discussed further.

Additional Resources

• Look for more content on AP Human Geography and subscribe for further videos.
• Mr. Sin's Ultimate Review Packet for more study resources.