Geographers like to talk about Core-Periphery Theory to explain how the world works. This division distinguishes between the developed countries (also grouped under names like «Western World», «Economic Triad» or just «the North») and not-fully-developed countries (those are the vast majority of the nations, known as «developing countries», «Third World», «the South» or «emerging countries»).
It all started with colonialism, back in 16th and 19th centuries. The Core has had the economic and political power for centuries, and the Periphery remained forgotten -and exploited by the Core- until recent decades.
- The Core: formed by the western countries, the Core is characterized by a very high Human Development Index, good infrastructures and services (health, education, transport, administration…), a high life expectancy, democratic systems, development of the Tertiary Sector, a decreasing and old population and economies based on knowledge.
- The Periphery: formed by the developing and emerging countries, the Periphery is characterized by a low or medium (or sometimes high) Human Development Index, bad infrastructures and services, a lower life expectancy than in the Core, political systems that are not always democratic, a weak Tertiary Sector (Primary and Secondary Sectors are more developed in the Periphery), a fast-growing population, that is also very young, and economies based on low-skilled jobs.
Thanks to globalisation the Periphery has managed to grow and get a bigger share of the world’s power, measured in the share of the world’s anual GDP generated by each region (Core and Periphery). During the 20th century Periphery just generated a 25% of the world’s GDP (gross domestic product), whereas in 2010 that percentage rose up to 45%. The 2008 financial crisis helped decreasing the economic differences between the Core and the Periphery, as the most affected countries by it were those in the Core. 20+ years of offshoring and a large population have also boosted the Periphery’s economy, although we still find extremely poor nations in the margins of the world, far from the Core.
Offshoring can be perfectly seen in the textile industry, the sector that manufactures clothes and other textile products. In the Periphery, people that work in this industry suffer inadequate and insufficient working conditions: long-hour work shifts, poor infrastructures, no labour rights (no unemployment benefits, no right to strike…), bad safety measures, low salaries, use of child labor… Also, the health of the workers is compromised by the toxic products and dyes used in the production process.
Textile industry is usually related to laboral accidents. The investment in improving the working facilities is almost zero, and so workers are crowded in old factories and buildings, with bad infrastructures and bad ventilation systems. In 2013, a textil factory in Dhaka, Bangladesh, collapsed killing more than 900 workers.
Governments -both in the Periphery and those from the Core- allow this to happen because it benefits -almost- everyone: the company that relocates its production is happy because it reduces costs, the government of the country that receives the factory is happy because it creates jobs, the government of the country where the company comes from is also happy, because its economy moves towards the Tertiary and Quaternary sectors (instead of the Secondary sector). Low-skilled jobs are not wanted in the Core. It is not so clear that the workers in the Periphery are as happy as their governments and businessmen. Also, workers in the Core denounce the lack of jobs in the Secondary sector, as they all have relocated to the Periphery.
- Outsourcing means to contract out a part of your business to an external supplier, so they can handle that business activity for you.
- Offshoring is to relocate part of your business to another country to take advantage of lower costs and better resources.