003 - Foreign Direct Investment and Outsourcing

Geographic Knowledge and Understanding

Foreign Direct Investment (FDI) and outsourcing by transnational corporations (TNCs), and ways in which this networks places and markets.

Concepts

FDI and TNCs create powerful hubs of development in different places.

Aims

  • To have knowledge of what FDI and TNCs are.
  • To have knowledge of how FDI and TNCs are able to operate in a variety of places and markets.
  • To understand how FDI and TNCs connect places and markets.

Key Terminology

            • Foreign Direct Investment
            • Outsourcing
            • Telemedicine

Define the terms above by using your 'Geography Global Interactions' textbook by Simon Oakes Pages 20-21 and the 'Useful Links' below:


Useful Links

Activity One - Comprehension

Taken From - via GIPHY

For any outsourcing to occur there has had to be a shift in how places connect with each other. The internet has completely changed how we connect and the speed in which we do so. Having a common language is also important but without the development of ICT the process would still be slow. Answer the following questions by using your 'Geography Global Interactions' textbook and the 'Useful Resources' below:


      1. What infrastructure is now in place that has allowed business to outsource elements of their business to different countries.
      2. Looking at the second article in the 'Useful Resources' box describe the development of outsourcing and the trend of the locations.
      3. Looking at the first article in the 'Useful Resources' box describe the general pattern of where businesses are outsourced to.
      4. Using the 'Geography Global Interactions' textbook Page 20, describe the shift of global TNC headquarters.
      5. Describe the four different foreign direct investment strategies that are used by TNCs. These are in the textbook.

Activity Two - Detailed Example One - Commodity - Apple iPhone

We are now going to look at two different TNC examples which explore how they help to create networks between places. The first example is Apple. We are using Apple as most of you will own at least one of their products; whether it is a classic iPod shuffle or the most recent watch. We will watch the Youtube clip together and then you will need to read the sources below and record the following pieces of information:

        1. What? - What is being transferred?
        2. Where? - What places are involved?
        3. When? - How long has the process been happening? Has it evolved?
        4. Why? - How does the process happen? What has developed to allow the process to happen?
        5. Who? - Who are the stakeholders involved?

Activity Two - Detailed Example Two - Service - Telemedicine

We have now looked at a brand that is easily recognisable across the world and discussed why the TNC outsources its production to different areas of the world. We are now going to look at a service. As more people become well educated and the middle class sector grows there are increasing opportunities for the service sector to develop. The biggest growth area for this is India. India shares a common language with the USA and the UK and as a result areas such as Bangalore become important telecommunication hubs. We are going to focus on telemedicine.

        1. What? - What is being transferred?
        2. Where? - What places are involved?
        3. When? - How long has the process been happening? Has it evolved?
        4. Why? - How does the process happen? What has developed to allow the process to happen?
        5. Who? - Who are the stakeholders involved?

Useful Resources

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