Globalization has meant that there is an international division of labour. The fabrication of many products is divided into several steps (from design to assembly) spread out over the world according to the advantages offered by each country.
Decision making functions are concentrated in the most developed countries. For example, the USA dominates research and development (R&D) and accounts for 1/3 of global spending in this domain.
Processes requiring low levels of skill are dispersed throughout the developing world. Companies locate the manufacturing process in whichever economy offers the lowest costs (e.g. often countries in South-East Asia such as China).
Globalisation is dominated by flows of merchandise across countries, continents and oceans and by HUGE companies known as TNCS – Trans National Corporations.
Silicon Valley Case Study:
Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical Santa Clara Valley.
Silicon Valley Resources:
Singapore Case Study
Singapore is another global centre for high-tech industry. It is the smallest country in South-East Asia and is located on one of the world’s busiest maritime routes. It is also a major financial centre and production space which is fully integrated into the regional and wider world economy.