Challenges to National Identities
Geography: Edexcel A Level, topic 11.5.3
Challenges to National Identity - TNCs
In a more globalised world, there are threats and challenges to national sovereignty. Foreign companies and TNCs are one example of this.
FDI and other investment
- Flows of investment by foreign governments, manufacturing and media companies and wealthy individuals have bought or taken over many assets in the UK.
- Norges, the Norwegian Sovereign Wealth Fund, bought 25% of the leasehold on the landmark office building, 30 Warwick Street.
- A Qatari-led group purchased the Canary Wharf complex in London in 2015.
Foreign takeovers
- International companies may takeover (acquire) British companies.
- The shareholder acceptance level for a foreign takeover in the UK is only 50% - other countries have higher threshold levels. In the USA, a department called CFIUS bans many takeovers on the grounds of national security (such as the proposed takeover of Qualcomm by Broadcom).
International investors
- Several TNCs in the UK have been bought by Chinese and Indian investors.
- Jaguar Land Rover (JLR) is owned by the Indian company Tata Motors.
- Some people argue these takeovers can threaten a national identity. What does 'Made in Britain' mean in the global age?
Employment
- Sometimes takeovers by international companies can lead to significant job losses.
- Kraft completed a takeover of Cadbury in 2009. It promised to keep plants and factories open but shut many down within a few years.
Challenges to National Identity - Westernisation
Westernisation is the promotion of European and North American cultural values. It can be a soft challenge to national identity through a number of factors:
Global retail
- TNCs like Apple and Inditex (Zara) sell smartphones and clothes internationally.
- People in almost all countries in the world can wear the same clothes and use the same software and hardware.
Food
- McDonald's has 34,480 restaurants in 119 different countries in the world.
- Although low-cost food that people enjoy eating may show the benefits of capitalism, the spread of obesity (30-35% of Americans are obese), may not be a positive trend.
- However, TNCs often adapt to the local culture. McDonald's in India serves Paneer Burgers.
Media
- Disney's films like Toy Story and Monsters Inc are watched internationally.
- However, TNCs increasingly gain new ideas from local cultures, rather than attempting to supplant them. Disney released 'Arjun: The Warrior Prince' in India in 2012.
- Changing the nature of products to meet local tastes, demand or laws is called 'glocalisation'.
Challenges to National Identity - Property Markets
The ownership of property, land and businesses is increasingly becoming non-national, and this can be seen as a threat to national identity.
Foreign buyers
- In many parts of London (including St John's Wood, Knightsbridge and South Kensington), foreign buyers own a high percentage of the residential property.
- French & Greek residents are particularly concentrated in South Kensington.
- Similarly, many English retirees own property in the South of Spain.
- This can impact the national identity and also create resentment towards migrants if this demand increases house prices and makes them unaffordable for locals.
- For example, in 2013 the Financial Times reported that 82% of property deals in Central London involve foreign buyers.
Bans on property purchases
- In 2018, New Zealand introduced a ban on the purchase of residential property by foreigners. This excluded foreigners from Australia and Singapore because of trade pacts that already existed.
- Silicon Valley billionaires like Peter Thiel had purchases 400+ acre farms in New Zealand. Many think it is a doomsday backup plan to escape to New Zealand if there is a breakdown of society in the USA.
Test yourself on Challenges to National Identities
Which country's Sovereign Wealth Fund bought 25% of 30 Warwick Street?
Which country's investors own Canary Wharf?
Which US department bans many takeovers on the grounds of national security?
Obesity is becoming more common internationally. What percentage of Americans are obese?
What is an example of glocalisation from Disney?