13 February 2016

GEOGRAPHY CHAPTER 2: The United Kingdom in a Global World

I – The UK: part of a global world

A – What is globalization?

Globalisation = process by which the world is becoming increasingly interconnected as a result of massively increased trade (hard power) and cultural exchange (soft power). Globalisation has increased the production of goods and services. The biggest companies are multinational corporations with subsidiaries in many countries. Globalisation has speeded up over the last half-century.

Key factors:

·       Improvements in transportation (economies of scale)

·       Freedom of trade

·       Improvements of communications

·       Labour availability and skills

 

B – The actors of globalization

1 – Global organisations

·       International Monetary Fund (IMF)

·       The World Bank: an international organization affiliated with the United Nations. Its purpose is to finance projects that promote economic development in member nations.

·       World Trade Organization (WTO): inter-government organisation that promotes the free flow of trade around the world

 

2 – The role of the TNCs

Firms whose headquarters are generally located in a Northern hemisphere country, while they relocate/outsource part of their operations in developing countries through branches/affiliates. Conception, design, research and development remain in Western countries, while production goes to cheaper countries: TNCs enforce the international division of labor.

C – Impacts of globalization

1 – Positive impacts

·        Inward investment by TNCs helps countries by providing new jobs and skills for local people.

·        TNCs bring wealth and foreign currency to local economies when they buy local resources, products and services. The extra money created by this investment can be spent on education, health and infrastructure.

·        The sharing of ideas and lifestyles of people and cultures. People can experience new foods and other products.

·        Globalisation increases awareness of events in far-away parts of the world. For example, the UK was quickly made aware of the 2004 tsunami tidal wave and sent help rapidly in response.

·        Globalisation may help to make people more aware of global issues such as deforestation and global warming - and alert them to the need for sustainable development.

2 – Negative impacts

Globalisation operates mostly in the interests of the richest countries, which continue to dominate world trade at the expense of developing countries. The role of LEDCs in the world market is mostly to provide the North and West with cheap labour and raw materials.

·        There are no guarantees that the wealth from inward investment will benefit the local community. Often, profits are sent back to the MEDC where the TNC is based. Transnational companies may drive local companies out of business.

·        An absence of strictly enforced international laws means that TNCs may operate in LEDCs in a way that would not be allowed in an MEDC. They may pollute the environment, run risks with safety or impose poor working conditions and low wages on local workers.

·        Globalisation is viewed by many as a threat to the world's cultural diversity. It is feared it might drown out local economies, traditions and languages. An example of this is that a Hollywood film is far more likely to be successful worldwide than one made in India or China.

·        Industry may thrive (= develop successfully) in LEDCs at the expense of jobs in manufacturing in the UK and other MEDCs, especially in textiles.

·        Anti-globalisation campaigners sometimes try to draw people's attention to these points by demonstrating against the World Trade Organisation.

Source: http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation

II – The UK, a global player

A – British Soft Power

Soft power = ability to get people to do what you want by the power of attraction rather than by forcing them. Soft power is non coercive; it uses culture, political values, and foreign policies.

·        British Empire became a global hegemonic power (‘the workshop of the world’) during the Pax Britannica, today Commonwealth of Nations

·        Democratic system (= Westminster system): system of government modelled after that which developed in the UK

·        British culture:

o   Music industry (British Invasion, Cool Britannia, today Adele)

o   Films (James Bond) and literature (Harry Potter)

o   Education (prestigious universities – Oxford, Cambridge, LSE)

o   Royal Family (Diamond Jubilee, 2012)

o   Tourism (London = one of the most visited cities)

·        British sport: 2012 Summer Olympics (the only city that hosted the Olympics three times: also 1908 and 1948) – worldwide audience

·        British media broadcast internationally and spread British values

o   BBC: weekly global audience of 308 million people (May 2015)

o   The Economist

 

B – British Hard Power

Hard power = use of military and economic means to influence the behavior of others. This form of political power is often aggressive, and is most effective when imposed by one political body of lesser military and/or economic power.

1 - Politics: a world leader

·        Permanent seat in the UN Security Council (but will probably hand it over to the EU)

·        5th largest economy in the world (2015 World GDP ranking by IMF)

·        Member of the G7, G8, G20

2 - An open economy

·        An important exporter: a connecting point between North America, Europe and Asia thanks to its maritime trade routes

·        Trading partners: U.S.A., EU, Commonwealth, increasing towards BRICS

·        Export products: manufacturers (machinery), mineral fuels (BP)

·        Global actors: 8 TNCs among the Top 100 (but decreasing)

·        Neoliberal, Anglo-Saxon economic model

3 - A military power

·        A nuclear power: 5th greatest number of warheads, the Trident programme

·        5th highest defense budget, increased in 2015

 VIDEO 'How powerful is the UK?'

III - Hearts and impulse centres of globalisation

A – London, a global city (term coined by Saskia Sassen)

Global city: A major urban area that has a significant role in controlling the international flows of capital and trade.

Megacity (population > 10 million) / metropolitan area (15% of residents work in the central city)

London vs Paris

London

Inner London

(3,2 million)

Greater London

(8,6 million)

London metropolitan area (13,6 million)

Paris

City of Paris

(2,2 million)

Grand Paris (created in Jan 2016)

(7 million)

Ile-de-France

(12,3 million)

 

·        Economic power: the City (colloquially known as the Square Mile) with London Stock Exchange, Lloyds (insurance), Bank of England, TNCs headquarters (Unilever)…

 

·        Political power:

o   Capital cities

o   Royal family (Buckingham Palace, Clarence House)

o   British Parliament: Palace of Westminster

o   British Government: 10 Downing Street, Whitehall

o   World influence: consulates, Commonwealth

·        Cultural power: sports and cultural events, education, tourism (15 million visitors/year), powerful media

·        Infrastructure: advanced transportation system, a transport hub

o   High-speed trains (Eurostar: 2h to Paris and Brussels)

o   Highways (M4 corridor)

o   Airports (5 major airports; Heathrow, Stansted, Gatwick…)

o   Mass transit system (405 of the oldest underground in the world – not in South-East because of London Clay)

·        Skyline dominated by skyscrapers that tower above historical buildings, a threat for historic urban landscape but necessary to compete with other global cities.

 VIDEO 'The (Secret) City of London - History', VIDEO 'The (Secret) City of London - Government, VIDEO 'The City of London, Money and Power'

 

     B – London’s CBD

1 – The City

London is an example of an economic cluster, in which businesses locate close to one another because they gain from proximity. The distinctive feature of the City cluster is the pre-eminence of foreign financial firms. There are further benefits from locating in the cluster. Firms can call upon all the external services, such as advice from lawyers and accountants. This in turn creates a fertile environment for innovation to flourish—a vital attraction for a global financial centre.

2 – Canary Wharf

A second financial district has developed at Canary Wharf located in Tower Hamlets, east London. It contains many of Europe’s tallest buildings, including One Canada Square. It was completed in 1991 and became the UK’s tallest building (it was surpassed by The Shard, completed in 2013) and a symbol of the regeneration of Docklands. Headquarters of two world’s largest banks, HSBC and Barclays, are located here, such as the headquarters of the international news agency Reuters. Canary Wharf is already accessible by bus and underground. A Crossrail railway station is currently under construction and is expected to open in 2018.

3 – Central Activities Zone (CAZ)

In 2004, the Greater London Authority (= regional authority established in 2000, with powers over transport, economic development…)published the London Plan (regional planning document) defining the ‘Central Activities Zone’ (CAZ) comprising the City of London, most of Westminster and the inner parts of other Inner London’s boroughs. The CAZ is described as ‘a unique cluster of vitally important activities including central government offices, headquarters and embassies, the largest concentration of London’s financial and business services sector...’ It also ‘embraces much of what is recognised around the world as iconic London’. But the CAZ also contains ‘the largest concentration of deprived communities’.*

*Source: BAKER, Gideon, Hospitality and World Politics, Palgrave Macmillan, 2013

Conclusion: the North-South divide in the UK

London makes a large and growing contribution to the UK economy. It now accounts around 19% of jobs, 21% of businesses and 25% of economic output. Its rapid growth after the financial crisis of 2008 has prompted further debate about the role it plays in the UK economy.

·       On one side people claim that London has become too dominant, and that the UK economy needs to be rebalanced away from the capital.

·       On the other side there are commentators who say that London is critical for the country and should be given more investment to grow.

Example of London domination: Heathrow is a major business centre as well as a transport hub. There is more office stock in the surrounding area than there is in the CBD of Birmingham, the U.K.’s second largest city

 

See also pages 22-24 of the chapter ‘Mapping the UK’