‘Newly industrialised countries have been, and continue to be, the driving force of globalisation’
To what extent do you agree with this statement
Globalisation can be seen as the increased flow of goods, services and information across countries, and it is driven by rapid technological growth and increased connectivity between countries of the world. It also establishes and maintains economic and political relations between these countries. Some of the factors that have affected globalisation include technological innovation as it had made transport and communication around the world easier, trade has also played an important role in encouraging globalisation. Trade between countries in the developed world and the developing world has specifically been the biggest driving force of globalisation. Newly industrialised countries or NIC’s are countries whose economies have not yet reached first world economic status but their economic growth are still increasing more than other developing countries. NIC’s are switching their current agriculture-based economy into a more industrialised, urban economy.
Current NICs include China, India, Brazil, Malaysia, Mexico, South Africa, Philippines, Thailand and Turkey. The average growth rate between these countries is approximately 7.6% compared to the world average of 3.7%. The first group of NIC’s came from the Asia area, they included Taiwan, South Korea, Hong Kong and Singapore. They called these the Asian Tigers. The Asian Tigers were notable for maintaining exceptionally high growth rates (in excess of 7% a year) and rapid industrialization between the early 1960s and 1990s. By the 21st century, all four have developed into advanced and high-income economies. There are several factors that make Newly Industrialised countries the driving force of globalisation.
Firstly, most newly industrialised countries have a large population; this makes the countries more attractive for investment as these countries have lots of cheap labour. Therefore, these countries seem more attractive to TNC’s as they can make more profits when the cost of labour is cheap. A Transnational Corporation or a TNC is a privately owned company that is based in 2 or more countries. They take advantage of the NIC’s cheap labour and large growth rate. For instance Toyota is one of the world’s leading car manufacturers and is the third largest in the world. Although based in Japan, Toyota produces most of its cars in its transplants in Georgetown, Kentucky, and Burnaston and Derbyshire.