IBUS2002 Chap.1 Globalisation and Employment
Globalisation and Employment
Is the economy really global?
The course starts by testing a familiar claim. Trade data shown in the first workshop put Western Europe, Asia and North America behind 85.6 per cent of world merchandise exports, and much of that trade stays inside each region. Western Europe sends 29.7 of its 43.0 points of world exports to itself.
The conclusion drawn on the slides is that the economy is highly internationalised but not truly global, which matters because employment effects follow the same uneven geography.
Supply chains, convergence and divergence
Supply chains now carry about 80 per cent of global trade and 60 per cent of global production, according to the Week 1 slides.
They separate the brand from the firm that employs production workers, spreading risk and often driving down labour costs where public governance is weak. The chapter then sets out the convergence argument, that global competition pushes countries towards similar practices, against the divergence argument, that institutions filter those pressures.
A legal services case shows how outsourcing and automation moved routine professional work offshore. The analytical habit to take away is to ask who gained, who lost and through which mechanism, rather than declaring globalisation good or bad.
Where this topic appears in assessment
Globalisation framed the first weeks drawn on by the case study, and it supplies the background for every later essay.
In Section A, expect to define a concept such as convergence or a supply chain in a few precise sentences. In Section B, the chapter's supply chain material returns whenever a question asks why multinationals organise production across borders.
What this chapter covers
- 01
Regional concentration of world trade
- 02
Supply chains and the employment relationship
- 03
Free market and race to the bottom readings
- 04
Convergence and divergence
- 05
Winners and losers in offshored professional work
Worked example · free
Read the regional trade shares for an argument about globalisation
- 2Add the three largest regional shares and state the total.
- 2Use the intra-regional figure to show clustering.
- 2State the conclusion and one limit of the data.
Key terms
- Supply chain
- A supply chain is the set of linkages within and between organisations that connects raw materials to final consumers.
- Race to the bottom
- A race to the bottom is the claim that competition for investment drives labour standards down across countries.
- Intra-regional trade
- Intra-regional trade is the share of a region's exports that goes to destinations within the same region.
Globalisation and Employment FAQ
Why do the slides say the economy is not truly global?
Trade is concentrated in a few regions and much of it stays within them. Western Europe, Asia and North America dominate world merchandise exports, and Western Europe trades most heavily with itself, so integration is real but uneven.
How do supply chains change the employment relationship?
They legally separate the multinational from the workers who make its goods. Risk is spread across suppliers, labour costs can be pushed down, and weak public governance in producing states gives governments little incentive to raise standards.
What is the difference between convergence and divergence?
Convergence predicts that global competition makes national employment practices more alike. Divergence predicts that laws, bargaining systems and training regimes keep practices different, or even widen the gaps, because institutions filter global pressure.
What did the legal services case show about globalisation?
Routine, rules-based legal work moved to outsourcing providers in India and later South Africa, and automation took over repetitive tasks. Corporate legal departments saved money, while traditional firms whose revenue relied on junior lawyers' hourly charges faced disruption.
Exam move
Start with the trade table: memorise the three largest regional shares and the intra-regional figure for Western Europe, because they give you a concrete basis for any claim about how global the economy is. Then write two short paragraphs, one arguing convergence and one arguing divergence, each with a named mechanism and an example.
For the supply chain material, practise drawing the chain from raw materials to consumer and marking where the legal employer changes. Use the legal services case to rehearse winners and losers: name each group, its gain or loss, and the cost difference that caused it. Finally, write a 120-word answer explaining why the course avoids culture as a catch-all explanation and prefers institutions.
Time yourself, check that every sentence either defines, explains or concludes, and cut any sentence that only repeats the question.
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