What this lesson teaches
I can evaluate the economic, social and environmental effects of TNC networks on home and host economies.
Syllabus 9173, Topic 1.2, 2. Geography of the Global Economy and Transnational Corporations (TNCs). How do TNCs' global production networks impact their home and host economies?
Make a guess
A rich country closes its polluting factories and imports the same goods instead. Has pollution fallen?
- No, not necessarily. It may have moved abroad.
- Yes, because importing goods causes little pollution.
- No, because closing factories increases pollution.
- Yes, because the air at home is cleaner.
Show the answer
No, not necessarily. It may have moved abroad.
Air at home may get cleaner, but if the goods are now made elsewhere, the pollution happens there. Global pollution may not fall.
A cleaner factory or a new job can be a real gain, but a full judgement follows people and pollution across the whole network.
In host economies, TNCs may bring better skills, more secure jobs and higher standards. They can also bring unsafe work, long hours, discrimination or people pushed off their land. Results depend on the firm, its suppliers, regulation and whether workers can speak up.
Home economies may gain professional jobs and cheaper goods. But factory closures can weaken communities, reduce young people's prospects and cause stress for laid-off workers. The same change can benefit consumers while harming workers in one town.
Environmental gains are possible in host economies when efficient equipment and enforced standards cut waste and emissions. But TNC activity can also use up resources, pollute and add transport. Weak oversight lets polluting production move to places with less power to object.
At home, air or water may get cleaner when polluting factories close. But importing the same goods may just move the pollution abroad. Cleaner air in one place does not prove global pollution fell. So ask both where pollution happens and whose consumption drives it.
- Social impacts
- Skills and jobs, or unsafe work and displacement.
- Environmental impacts
- Cleaner methods, or pollution and resource use.
- Displacement
- Pollution moved, not reduced.
Step by step
Separate the dimensions
Social and environmental, not just economic.
Follow both places
Where do gains and harms happen, and to whom?
Check for shifting
Was the problem reduced or just moved?
Real examples to use
Rana Plaza, Bangladesh, 2013
A factory building making clothes for global brands collapsed, killing over 1,100 garment workers.
Worked example: A false environmental success
In a made-up network, a polluting factory closes in A and production moves to B, where treatment is weaker. Air near A improves, but total pollution may not fall. Compare output, treatment, transport and consumption in both places.
Watch out for this
Cleaner air at home proves overseas production is sustainable.
It may hide pollution moved to the host country.
Check your understanding
A host factory uses clean technology, but its suppliers dump untreated waste. What is the best judgement?
- The whole network is sustainable because one site improved.
- There is a gain at the factory, but suppliers need assessing.
- Clean technology at one factory does little for the environment.
Show the answer
There is a gain at the factory, but suppliers need assessing.
Yes. Judge the whole network.