Back in the day, if any nation had economic problems, it was their problem alone. What happened in one country did not necessarily affect the other nation’s economy. But, things are a lot different today. We now see how an increase in oil prices can affect the economy of several countries at the same time. Or do we talk about foreign currency? For instance, the rise or fall of the American dollar will impact other currencies. It is easy to weaken a country’s economy with international sanctions these days. Let us see what globalization is, and some other information relevant to the subject in other parts of this post.
What is Globalization?
There have been conflicting opinions made by experts regarding when globalization started. While some commentators believe it has been existing since the 14th century, others opined that the effect of globalization was not felt until the 19th century when the world’s economy was impacted by international trade. The two schools of thought may not agree on the timing of globalization. But, one thing is common to both of them – globalization is not new as many people claim.
There are different perspectives to the definition of globalization, depending on how you see it. We will look at a couple of those definitions here.
Globalization could be about businesses or organizations building international influence or how they organize their operations in different places worldwide. Globalization can also be used to explain the synergy of national economies with the help of technology, capital flow, labor force migration, and trade. Globalization could equally mean processes that are driven by various purposes and needs. Globalization is what makes it easy for people, information, culture, goods, services, and money to be exchanged across borders.
From the above definitions, it is obvious that globalization cannot be viewed through a single lens. Rather, it is a phenomenon that can be defined in various regards. It is also possible to deduce possible globalization examples from the definitions given above.
Merits of Globalization
As one would expect, the benefits of globalization are numerous. According to Amartya, globalization has been behind many of the economic benefits that are currently being enjoyed by developing countries today. It has equally provided scientific and cultural enrichment globally. The UN has also made forecasts that globalization has a major role to play in the eradication of poverty. Let us break down these benefits for your reading pleasure.
- Globalization consists of the integration of information technology, cultures, international trade, and investment.
- Globalization affords corporations the ability to acquire competitive advantages. It helps them to reduce operational costs.
- Foreign trade agreements, a product of globalization, makes it possible for governments to incorporate free market economic systems.
- Thanks to globalization, it is now easier for consumers around the globe to discover investment opportunities, new products, and economic trends.
- Globalization has also made it possible for countries in the developing world to level up with nations with the advanced economy through manufacturing, diversification, and economic growth.
- The outsourcing industries have benefitted immensely from this, as technology and other job opportunities have been exported to other nations.
- Globalization is the main reason why innovation is on the rise today. Companies need to come up with ways they can raise their capital and improve their R&D, so they will not be left behind.
- Globalization has led to the provision of more employment opportunities, particularly within the export and import sectors.
Demerits of Globalization
Does globalism have any shortcomings? The question of – is globalization good or bad – has always been asked. No system is perfect in this world. Two renowned economists from Cambridge University believe that globalization is breeding inequality in the world today. This view was further corroborated by the IMF, which disclosed that the introduction of new techs may have been responsible for the inequalities between countries. It will amaze you to learn that some developed nations like France do not believe in industrialization. Outlined below are some of the disadvantages of globalization.
- Globalization has not been helpful to local and national economies. Global firms accessing developing terrains are likely to introduce their standards in such places.
- Globalization can lead to the disappearance of minor languages.
- There is also the issue of workers getting displaced because they are being replaced by technology. No thanks to globalization.
- As the scope of industrialization continues to expand across countries, communities, and cities because of globalization, we are beginning to experience climate change, loss of biodiversity, pollution, and an uncontrolled increase in the local population.
- Free trade is not that favorable to small-scale businesses that are competing in the world market. Part of globalization’s demerits is that such businesses have to compete with bigger companies that have more resources.
Conclusion
Globalization is so broad that it will be impossible for you to cover everything in one swoop. You need more than just one blog post to cover the different facets of the subject. That said, if you have been looking for a comprehensive definition regarding what globalization is, then this is a good place to get started.
