Human Geography – The Globalisation of Economic Activity Uneven Development in the Global Economy

Global Structure

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  Japan’s 5^th largest automobile producer
  
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  3 head offices in Japan, North America and Australia
  
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  Research and development, product testing in Japan, North America and Germany
  
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  Manufacturing in the Netherlands, Japan, North America, Thailand, the Philippines and Australia
  

Impacts

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  Economic
  
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    Direct job creation
    
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      Eg. expansion of Mitsubishi Motors plant in Illinois, USA in 2003 provided 300 new jobs in the manufacturing sector
      
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    Tax revenue which can be channeled into public projects like education and healthcare to aid national development
    
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    Transfer of technological skills and nurturing of local talent in the automobile industry through joint ventures
    
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      Eg. 22-year long partnership with Proton of Malaysia from 1983-2005 to develop Proton’s first product, the Proton Saga
      
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    Consumers have greater variety of products to choose from
    
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    Footloose nature: at risk of losing jobs
    
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      Mitsubishi Motors decided to close down its Lonsdale plant in Adelaide, Australia in 2004 due to global debts, causing 650 workers to lose their jobs
      
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    Profit repatriation, so host countries only receive a small percentage of profits earned
    
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    Competition to local firms
    
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  Environment
  
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    May have outsourced to LDCs to evade strict environmental regulations to save production costs – may cause environmental damage
    
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    But Mitsubishi Motors has set behavioural standards to reduce emissions of greenhouse gases and maximize efficient use of natural resources
    

Global Structure

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  World’s largest mobile telephone manufacturer
  
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  Headquarters in Finland
  
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  Customization and logistics centre in US
  
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  Research and development in Finland, Japan, China, USA, Germany, Hungary
  
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  Production units in Brazil, China, Finland, Germany, Great Britain, Hungary, India, Mexico, South Korea
  
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  Against outsourcing production stream so that they can control the quality of its products
  

Impacts

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  Economic
  
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    Teams up with local small-medium enterprises in host countries to help develop local SMEs and help Nokia understand how to better market their products to penetrate into the market
    
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    Job opportunities
    
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      Eg. established 5 research institutions and 4 production bases
      
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    Transfer of technology
    
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  Social
  
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    Provide solutions for the locals
    
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      Eg. Nokia teamed up with the Grameen Foundation to provide telecommunication services to rural villages in LDCs
      
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  Environmental
  
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    Nokia ranked as the top mobile and PCs producing company by Greenpeace International based on their practices to eliminate harmful chemicals and on taking responsibility for their products once they are discarded by consumers
    

Global Structure

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  World’s largest retailer
  
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  Headquarters in Arkansas, USA
  
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  Regional outlets in Central America (Guatemala, Honduras), Europe (UK), Canada, Asia (Japan, China)
  
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  Manufacturing plants in Jordan
  

Impacts

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  Economic
  
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    Provides jobs and reduces poverty
    
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      Walmart is the largest private employer in the US and Mexico
      
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    Provides goods at lowest prices possible
    
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      Eg. Global Insight recently released a study which found that Walmart saved each American household on average $2329 in 2004
      
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    Poor working conditions and standards: lowly paid yet subjected to long working hours of up to 20h a day, lack of workers’ welfare as they will be severely punished for any minor mistakes made
    
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  Political
  
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    Policies against labour unions: risk that the welfare of workers would not be protected due to disallowance to unionize
    
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  Environmental
  
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    Stockpiling tons of lawn and garden products on pallets outdoors results in chemicals washing into storm drains when it rains, affecting drinking water
    
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      Eg. fined $1m in civil penalties for violating Clean Water Act