Business

Explanations

Globalisation vs. Localisation

Penny Brooks

17th May 2017

Is consumer support for localisation a rejection of the forces of globalisation? The Monday Briefing, written by Ian Stewart, Chief Economist of Deloitte in the UK, is always worth reading, and I particularly recommend this week's item comparing the moves towards localisation and globalisation in world consumer markets. 

There is plenty of evidence that concerned consumers prefer localisation, promoting products which are distinctive goods made with local ingredients, creating sustainable local employment and reducing the need for transport. For many, as Ian Stewart says, localisation is a "counter to the supposedly anonymous, homogenising forces of globalisation".  

On the other hand, globalisation has led to global supply chains which enable specialisation, more jobs in low-skilled assembly lines in low-cost emerging economies, economies of scale due to access to much larger markets, and consumers benefit from much lower prices for better products.

Stewart analyses the global supply chains in the automotive industry, and for the Apple iPad, with plenty of evidence to support his arguments - data to show that, "despite the fact that its products and components are manufactured offshore, Apple pays more wages in the US than it does overseas." He ends with a strong justified conclusion to answer the question posed at the head of this blog - reaching the top levels for KAA and Ev! Great essay practice - give students a copy of the article, and set them that question, and see if they can do the same.

Penny Brooks

Formerly Head of Business and Economics and now Economics teacher, Business and Economics blogger and presenter for Tutor2u, and private tutor

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