How has the role of TNCS aided development in poorer countries?

TNCs, or transnational corporations, are companies who have bases in countries other than their "home" or origin country (e.g. Apple, a major global TNC, has its headquarters primarily based in California, however the company has outsourced its manufacturing and assembly components to various countries in Asia and Eastern Europe).
With the rise of globalisation; importantly the liberalisation of trade barriers, and improved communication networks, TNCs have been able to outsource their operations to less-developed countries with greater ease, allowing them to produce and manufacture goods for less, and thus allow the TNCs to earn more profit.
It is precisely this act of outsourcing that results in less developed countries attracting foreign direct investment from TNCs - who set up factories and operations in the host country. Indeed, this can certainly be seen to be of significant aid to the poorer host country, in a social, economic and environmental sense. Economically, the country benefits from increased employment from new and low-skilled job creation, and consequently increased income tax revenue - which can then be used by the government (given they are not corrupt, as is sadly often the case) to improve current infrastructure as a means to further develop and improve the country and its economy. Similarly, job creation and increased wealth among inhabitants, as well as TNC company CSR policies, can also be seen to target social (health and sanitation) issues - which, if tackled correctly, may similarly develop the country and allow for an increased work force as more inhabitants are physically able to work, and no longer suffer from the detriments of sub-standard living conditions. Education is also a major CSR policy for many TNCs, and it is arguably investment in schooling and education in these poorer countries that is ultimately key to the latter development - as domestic firms run by educated locals begin to flourish first on a national scale, and are then introduced to the international stage - bringing profits directly to the host country and thus allowing for the expansion of domestic business and competitiveness. With wealth (supposedly) then comes increased environmental consciousness - according to the Environmental Kuznets Curve - we see a proportional relationship between increasing GDP and lowering Co2 emission levels, as companies invest their increasing profits in greener technologies that minimise greenhouse gas emissions and seek to preserve and look after the environment.
(these are just a few points but social, environmental and economic are 3 key pillars for GCSE and A level answers - I would then begin the argument about development in poorer countries being restricted by TNCS)

Answered by Kate T. Geography tutor

8063 Views

See similar Geography A Level tutors

Related Geography A Level answers

All answers ▸

Explain the role of Cryospheric change in the water cycle (4 marks)


Sustainable approaches to coastal management will become more important than traditional approaches in dealing with the impacts of climate change.


What are the differences between basaltic and andesitic lava?


How are local climates affected by deforestation?


We're here to help

contact us iconContact usWhatsapp logoMessage us on Whatsapptelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2024

Terms & Conditions|Privacy Policy