UNIT 21 Globalisation of Trade Benefits and Challenges of Globalisation Positive impacts


Multinational companies can create employment both directly and indirectly in an area.


Multinational companies pay a fair wage and so the standard of living in the area will improve.


With more people employed, more income taxes will be paid. Also, the multinational company will have to pay taxes in Ireland. This tax is known as corporation tax.


Multinational companies which locate in less developed countries can have a positive effect on their economic development and the condition of human rights.


Know It!


Positive ‘impacts’ can also be called ‘benefits’ or ‘rewards’. Negative ‘impacts’ can also be called ‘challenges’ or ‘drawbacks’.


Why has Globalisation Expanded? The speed of globalisation has increased for a number of reasons:


1. Improvements in technology and communications have helped the development of globalisation. The internet enables global communication 24 hours a day, seven days a week and 365 days a year.


2. Improvements in transportation and the introduction of standardised containers in shipping (see below) allows huge quantities of goods to be shipped around the world at very low cost.


3. Sophisticated online payment methods have increased the speed of trade and movement of money.


4. The growth of multinational companies and the increase in global brands like Apple, Microsoft and McDonald's has been central to the development of globalisation.


Containerisation


This is a system that uses standard-sized containers to transport goods. These containers can be loaded and unloaded between ships, trains and trucks using


Negative impacts


Multinational companies are footloose, meaning they have no loyalty to an area and so can close and move if the economy or the company is not doing well.


Critics of globalisation believe that multinational companies have too much power and influence over governments and decision- makers in a country.


The production and transport of products can lead to increased CO2


emissions.


Multinational companies may have to alter products/services for different markets globally.


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