The impacts of globalisation vary on a global scale

What you'll learn

• How globalisation creates winners and losers in different countries and communities.
• The benefits and costs of countries hosting TNCs.
• How different types of migration affect migrants, source areas and destination areas.
• How the growth of global tourism, including mass tourism, affects economies, people and environments.

1. The big idea: impacts are uneven

An impact is an effect or consequence. In this topic, you are not just learning “globalisation is good” or “globalisation is bad”. You are learning that its impacts vary by place, scale and group of people.

For example, a new factory may benefit young workers who gain wages, but it may harm nearby residents if it creates pollution. A tourist resort may bring jobs, but it may also increase house prices for local families.

The diagram below summarises the three big impact areas in this section: TNC investment, migration and tourism.

2. TNCs and host countries

TNCs are a major driver of globalisation because they move capital money, jobs, technology and products across borders.

When a TNC invests in another country, this is often called foreign direct investment or FDI. For example, Samsung has major manufacturing operations in Vietnam, while car companies such as Toyota and Nissan have invested in the UK.

Benefits for countries hosting TNCs

Host countries can gain:

• Jobs and wages for local workers.
• Tax revenue for governments, if profits are taxed effectively.
• Exports, which bring money into the country.
• Skills and technology transfer, where workers and firms learn new methods.
• A multiplier effect, where spending by a TNC creates extra income for other local businesses, such as transport companies, food suppliers and construction firms.
• Improved infrastructure, such as roads, ports, energy supply and internet connections.

For an emerging economy like Vietnam, TNC manufacturing can support export-led growth. For a developed country like Ireland, high-tech and pharmaceutical TNCs can bring highly skilled jobs and large tax payments.

Costs for countries hosting TNCs

TNCs can also create problems:

• Jobs may be low paid, insecure or involve poor working conditions.
• Profit leakage can occur when money earned in the host country is sent back to the TNC’s headquarters overseas.
• TNCs may use legal methods of tax avoidance, reducing tax paid to the host country.
• Local firms may struggle to compete with powerful global companies.
• Factories can cause air, water or land pollution if regulations are weak.
• TNCs can be footloose, meaning they can move production elsewhere if wages rise or cheaper sites become available.

Different groups are affected differently

3. Migration: different types, different impacts

Migration is part of globalisation because people move for work, safety, education, family and lifestyle. It can be voluntary or forced, and it can happen within a country or across borders.

Key migration types

• Voluntary migration: people choose to move, often for jobs, education or family reasons.
• Forced migration: people have little or no choice, often because of war, persecution, famine or natural hazards.
• National migration, also called internal migration: movement within one country.
• International migration: movement across a national border.
• Rural-urban migration: movement from countryside areas to towns or cities. This is a major cause of urbanisation, which means an increasing percentage of people living in urban areas.

A refugee is someone forced to leave their country because of conflict, persecution or serious danger. For example, millions of Syrians have moved to countries such as Turkey, Lebanon and Germany since the Syrian civil war began.

Impacts on migrants

Migration can improve people’s lives if they gain:

• Higher wages.
• Better education or healthcare.
• Safety from conflict or persecution.
• Access to family networks.

But migrants may also face:

• Dangerous journeys.
• Language barriers.
• Discrimination or racism.
• Poor housing.
• Exploitation by employers.
• Separation from family.

Impacts on source areas

Source areas can benefit from remittances, which are money transfers sent home by migrants. For example, international migrants from countries such as the Philippines, India and Mexico send large amounts of money back to families, supporting food, housing and education.

However, source areas can also suffer brain drain, which is the loss of skilled or educated workers, such as doctors, engineers or teachers. Rural areas may also be left with older populations if many young adults move to cities.

Impacts on destination areas

Destination areas can gain:

• Workers for farms, factories, care homes, hospitals and construction.
• New businesses and entrepreneurship.
• Cultural diversity, including food, music, language and festivals.
• More tax revenue if migrants work legally.

But they may also experience:

• Pressure on housing, schools and healthcare.
• Competition for some low-paid jobs.
• Social tension if integration is poor.
• Extra short-term costs when receiving forced migrants.

For example, rural-urban migration to Chinese cities such as Shenzhen has helped provide labour for manufacturing, but it has also increased pressure on urban housing and services. International migration from Poland and other EU countries to the UK after 2004 helped fill labour gaps, but also created debate about pressure on public services.

4. Global tourism and mass tourism

Global tourism has grown because of rising incomes, cheaper flights, online booking, paid holidays and better transport. Before the COVID-19 pandemic, international tourist arrivals were around 1.5 billion per year, although exact figures vary by data source and year.

A destination area is the place tourists visit. Examples include Spain’s Costa del Sol, Thailand’s Phuket, Mexico’s Cancún, Venice in Italy and Kenya’s Maasai Mara.

Economic impacts of tourism

Tourism can bring:

• Jobs in hotels, restaurants, airports, guiding and transport.
• Foreign currency earnings.
• Tax income for governments.
• A multiplier effect as tourists spend money in local businesses.
• Investment in roads, airports, water supply and electricity.

But tourism can also cause:

• Leakage, where profits leave the destination because hotels or airlines are foreign-owned.
• Seasonal jobs, meaning work is only available at certain times of year.
• Low wages in cleaning, catering and informal work.
• Dependency on tourism, making places vulnerable to pandemics, terrorism, conflict or natural hazards.
• Rising prices for land, housing and food.

Social impacts on people

Tourism can improve local services and create pride in culture. It can support museums, festivals, heritage sites and local crafts.

However, mass tourism can also cause overcrowding, noise, traffic congestion and conflict between tourists and residents. In cities such as Venice and Barcelona, local people have protested about cruise ships, short-term holiday rentals and rising housing costs.

Environmental impacts

Tourism can have positive environmental effects if entrance fees fund conservation. For example, safari tourism in Kenya can provide income for wildlife protection, and ecotourism in Costa Rica has helped make forests economically valuable.

But mass tourism can damage environments through:

• High water use in hotels, swimming pools and golf courses.
• Waste and sewage pollution.
• Damage to coral reefs from boats, diving and coastal development.
• Habitat loss from resort construction.
• Carbon emissions from flights and cruise ships.

A useful term here is carrying capacity, which means the maximum number of people an environment or place can support without serious damage or decline in quality of life.

5. Why impacts vary globally

The impacts of globalisation vary because places have different levels of development, different governments, different environments and different amounts of power in the global economy.

A developed country may attract high-skilled TNC jobs, while a developing country may attract lower-paid manufacturing. A well-regulated tourist destination may protect local environments, while a poorly planned resort may suffer pollution and overcrowding. A destination country with spare jobs and strong services may absorb migrants more easily than a country already facing housing shortages or conflict.

6. Summary: the core argument

Globalisation increases connections between places, but it does not spread benefits and costs evenly. TNCs, migration and tourism can all create jobs, income and cultural links. They can also create inequality, exploitation, pressure on services and environmental damage.

The best answers do not simply list positives and negatives. They explain who is affected, how, and why the impact may be different in another place.