5.8 - Globalised Production
Globalised production
Globalised production has both positive and negative impacts. Views vary widely between stakeholders such as producers, consumers, and local economies.
Advantages of globalised production
- Cost efficiency for producers - Allows for the production of goods at a lower cost and to a uniform standard.
- Availability for consumers - Offers a wide variety of products year-round at affordable prices, driven by competition among producers.
- Economic gains for local areas - Enables regions to specialise in specific products, leading to intensified production and potential contracts with major TNCs.
Disadvantages of globalised production
- Environmental impact - Increases air miles as goods are transported globally, contributing to a larger carbon footprint.
- Rising input costs for producers - Higher expenses for essentials like fertilisers and fuel, which can squeeze profit margins.
- Hidden costs for consumers - Indirect consequences such as pollution, soil erosion, and declining water quality often result in additional costs passed on to buyers.
- Economic vulnerability in local areas - Local farmers may be undercut by global competition, leading some to abandon farming, while producers remain dependent on the fluctuating demands of TNCs.
Local commercial production versus globalised production
Local commercial production focuses on growing and selling goods within a specific region, contrasting with the broader reach of globalised systems. Both approaches have distinct advantages and challenges for producers, consumers, and local economies.
Comparison of local and globalised production impacts
| Aspect | Local Commercial Production | Globalised Production |
|---|---|---|
| Benefits for Producers | - Greater access to local markets and potential for direct farm-gate sales. | - Ability to produce at lower costs with consistent quality standards. |
| Benefits for Consumers | - Access to fresher, in-season products with a smaller carbon footprint due to reduced transport. | - Year-round availability of diverse, competitively priced products. |
| Benefits for Local Economy | - Boosts local farming through multiplier effects like demand for equipment and services. | - Potential to supply large quantities of a single product to TNCs, increasing production. |
| Costs for Producers | - Higher input costs due to rising oil prices and a focus on quality over quantity. | - Increased transport costs and squeezed profits due to high input expenses. |
| Costs for Consumers | - More expensive products and limited choice outside of local growing seasons. | - Indirect environmental costs like pollution and water quality issues often passed on. |
| Costs for Local Economy | - Requires subsidies to support sustainable farming practices. | - Undermines local farmers and leaves producers vulnerable to TNC demand shifts. |
Alternatives to globalisation through global civil society
As a response to the challenges posed by globalised systems, global civil society has emerged as a collective of groups and individuals seeking to address inequalities and promote alternative approaches. These movements vary widely in their scale, methods, and ideologies.
Characteristics of global civil society movements
- Diversity in approach - Includes a range of organisations, from large, peaceful entities like Oxfam to smaller, focused groups such as Operation Hunger in South Africa.
- Shared goals - Despite differences, many aim to challenge the dominance of globalised systems and advocate for fairer economic and social structures.
- Grassroots influence - Often works from the bottom up to influence change, focusing on community-driven solutions rather than top-down policies.
The rise of non-governmental organisations (NGOs) in response to global institutions
Non-governmental organisations (NGOs) have become significant players in countering the perceived inequalities created by global institutions like the World Bank and the International Monetary Fund (IMF). These organisations strive to reform global systems by addressing disparities and promoting accountability.
Role and focus of NGOs in global reform
- Challenging undemocratic practices - Many NGOs argue that institutions like the World Bank, IMF, and G7/G8 countries prioritise the interests of wealthier nations over others.
- Prominent examples of NGOs - Well-known groups include Greenpeace (environmental focus), The Fair Trade Network (economic equity), Stop The War Coalition (peace advocacy), Globalize Resistance (anti-globalisation), CAFOD (development aid), and Amnesty International (human rights).
Key areas of action:
- Creating fairer opportunities for countries in the global south to compete economically.
- Advocating for open access to information to empower communities.
- Pushing for greater transparency and accountability within global civil society and institutions.
- Building new, equitable relationships with global bodies to address systemic imbalances.
NGOs often form coalitions such as the global environmental movement, the anti-globalisation movement, and the global women's movement to amplify their impact on reforming global systems.