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Human Geography

Economic Geography

NIDL

LO:Discuss the causes and impact of the emergence of the NIDL on global economic activities

The New International Division of Labour refers (quite broadly) to the global spread of labour use across international borders in the face of globalization and increasing industrial competition.

Characteristics of NIDL

TNC Driven – large capital outlay for global investments

Hierarchical, tripartite – see TNC notes

Profit driven – capital accumulation near the top of the hierarchy (where R&D is concentrated)

Organic and dynamic relationships – Producers and ‘actors’

Uneven – some countries benefit from globalization much more than others. NIDL favours

Geopolitically stable economics

Competent, capable governments

Good and reliable infrastructure

Causes of NIDL

Pushes to a NIDL

Pulls of a NIDL

High labour costs, unionisation in DCs

Cheap, docile workforce in LDCs. Low/no unionisation

Saturated markets, product life cycles need to be extended

Search for new markets for investments

Resistance to change from supranational institutions

Improvements in transport and communications = increased mobility and efficiency

Active role of governments in ELDCs in attracting foreign investements – EPZs, tax holidays etc.

Impacts of NIDL

LDCs

DCs

Employment

Push towards tertiarisation and beyond

Increased SOL

More competitive product pricing from NIDL – consumers benefit

Technology, skills transferred

Profit maximization for TNCs

Limited to selected, mainly labour-intensive industries

Loss of lower level jobs – blue-collar workers

Limited transference of technology and skills

Socio-political resentment towards LDCs – protests and protectionism (EU)

Profit repatriation

Subject to mobility of TNCs – vulnerable to restructuring and reorganization

Economic and political dependence

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