Superpowers & TNCs

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The Global Influence of TNCs

TNCs can be particularly important in cultural and economic globalisation. This includes privately-owned TNCs (mostly Western) and state-led TNCs (more common in developing countries and China).

Historic influence

TNCs have historically had a material influence on globalisation.
In the colonial era, the East India Company ran much of India's global trade and this was a British company.
The Dutch East India Company managed the Netherlands trade and this was founded in 1602.

Cuisine

The growth of many TNCs as global players is more recent. They have benefitted hugely through the global shift and the move of manufacturing to Asia.
TNCs are important in the global economy because they encourage cultural globalisation with their products.
For example, through McDonald's opening in 119 countries, they are spreading the American cultural idea of fast-food around the world.
Subway has over 600 stores in both India and Russia.
Whilst glocalisation is their strategy to adapt to meet local demands, they are still often spreading a Western cultural idea.

Multimedia

In 2018, Kim Kardashian had over 110 million Instagram followers. Only 24% of these followers were from the USA. 1.8% of her followers are in Sao Paulo, Brazil.
Platforms like YouTube, Instagram and Twitter have led to the global transmission of culture.
Disney, Netflix, Amazon, Spotify and Apple Music are all transmitting TV, films and music internationally.
For example, Disney is the 8th most valuable brand in 2018 and the only media brand in the top 10. Through Disney, America is able to spread its culture and this is an important characteristic in superpower status.

TNCs - Technology

TNCs are so important to globalisation because of the technology and know-how that they spread internationally.

Patents

Patents are granted to a company and mean that that company exclusively owns the idea and concept of that product. - They own the intellectual property for a set period of time.
Any new technology or process can be registered for a patent and anyone who uses this technology or process has to pay a royalty to the company who owns the patent.
These rules, which are part of the Trade-related Aspects of Intellectual Property Rights (TRIPS) agreement were introduced in 1995.

Training

When Apple outsourced the production of the iPhone to Foxconn in China, they needed Chinese workers with skills in electronics, manufacturing and supply chains.
Outsourcing different tasks can increase the number of workers in a country with a set of skills. These workers then spread them throughout their country and can start their own businesses.

Shifting balance of power

TNCs are the companies with the money to put into research and development to develop new technologies.
They then charge other companies and governments to use this technology and through receiving royalties, they cement their position of power.
In 2018, the top 3 most valuable brands were American and thus having such powerful TNCs secures America’s superpower status.
The top TNCs are becoming more international. In 2006, 6 of the largest 10 TNCs were American. This had fallen to 3 by 2015 as many state-owned Chinese TNCs grow.