Globalization
Globalization is the process by which ideas, goods and services spread throughout the world.
Globalization is the process by
which ideas, goods and services spread throughout the world. In business, the
term is often used in an economic context to describe an integrated economy
marked by free trade, the free flow of capital and corporate use
of foreign labor markets to maximize returns and benefit the common
good.
How globalization
works
Globalization
is driven by the convergence of political, cultural and economic systems that
ultimately promote -- and often necessitate -- increased interaction,
integration and dependency amongst nations.
The
more that disparate regions of the world become intertwined politically,
culturally and economically, the more globalized the
world becomes. flow of knowledge
These
international interactions and dependencies are enabled and accelerated
by advances in technology, especially in transportation and telecommunications.
In general, money, technology, materials and even people flow more swiftly
across national boundaries today than they ever have in the past. The ,
ideas and cultures is expediated through internet communications.
Types of globalization: Economic, political, cultural
There
are three types of globalization:
1.
Economic globalization. This type focuses on the unification and integration of
international financial markets, as well as multinational corporations that
have a significant influence on international markets.
2.
Political globalization. This type deals mainly with policies designed to
facilitate international trade and commerce. It also deals with the
institutions that implement these policies, which can include national
governments as well as international institutions, such as the International
Monetary Fund and the World Trade Organization.
3.
Cultural globalization. This type focuses on the social factors that cause
cultures to converge -- such as increased ease of communication and
transportation, brought about by technology.
It's
important to note that all the types influence each other. For example,
economic globalization is made possible by certain liberal trade policies that
fall under the category of political globalization. Cultural globalization is
also affected by policies passed in political globalization and is affected by
economic globalization via the imports and exposure a culture has to other
cultures through trade.
The
unifying thread between the three types of globalization is the advancement of
technology. As mentioned previously, technology plays a role in expediting each
type.
Effects of
globalization
The
effects of each type of globalization can be felt both locally and globally,
and can be observed in interactions at every level of society, from an
individual at the micro level to a society at the macro level.
·
The individual level includes
the way international influence affects ordinary people within a nation or
region
·
The community level includes
effects to local or regional organizations, businesses and economies.
·
The institutional level includes
effects to multinational corporations, national governments and higher
education institutions that have international students. At this level,
decisions are made that affect the lower levels.
While
the effects of globalization can be clearly observed, analyzing the net impact
of globalization is a complex proposition, as specific results of globalization
are often seen as positive by proponents and negative by critics. Many times, a
relationship that benefits one entity may end up damaging another, and whether
globalization benefits the world at large remains a point of contention.
Examples of globalization
One
relevant example of globalization is the existence of multinational
corporations. The term multinational corporation simply refers to a business
that conducts operations in more than one country. McDonalds, for instance, is
a multinational fast-food corporation with 37,855 restaurants spread over 120
countries and territories as of 2018. With 1.7 million employees, it is the
second-largest private employer in the world behind Walmart.
Other
examples of multinational corporations include the following:
·
Ford Motor Company, an
organization that works with about 1,200 suppliers it identifies
as tier 1 around the globe; and
·
Amazon, an
organization that uses tens of thousands of suppliers and employs more than
250,000 full-time workers in 175 distribution centers around the
world.
Through
their expansive presence and influence on social and economic development in
the countries that host them, multinational corporations like McDonalds, Amazon
and Ford are symbolic of the contradictions of globalization. On the one hand,
the multinational corporations can bring jobs, skills and wealth to the region
they are in by investing in the local people and resources.
On
the other hand, multinational corporations can destroy local businesses,
exploit cheap labour in developing countries and threaten cultural diversity.
While they do offer benefits to the regions they operate in, they are often
unsustainable because the loyalty of the corporation ultimately is to its
bottom line and not the culture it has integrated itself into.
Advantages of globalization
Proponents
of globalization argue that it can solve fundamental problems with the global
economy, such as poverty and unemployment, by promoting a free market that
benefits rich and poor nations alike.
Free
trade aims to reduce the amount of trade barriers between nations. A trade
barrier is any imposed restriction on international trade, including tariffs
and subsidies. This consequently promotes economic growth, creates jobs, makes
companies more competitive and lowers prices for consumers.
It
also theoretically gives poorer countries an opportunity for economic
development through exposure to foreign capital and tech, resulting in
conditions that foster an improved standard of living for the citizens of that
nation.
Disadvantages of globalization
The
biggest advantages of globalization are also its biggest disadvantages. While
many proponents view globalization as an avenue for solving core economic
problems, critics see it as worsening global inequality.
For
instance, while some proponents say globalization creates new markets and
wealth -- and promotes greater cultural and social integration by eliminating
barriers -- critics blame the elimination of barriers for undermining national
policies and cultures and destabilizing advanced labor markets in favor
of lower-cost wages elsewhere.
Similarly,
some proponents point to the rising economies of poor countries benefiting from
companies moving operations there to minimize costs. Meanwhile, some
critics say such moves could lower living standards in developed countries by
eliminating jobs.
While
proponents focus on the increased trade benefits and political cooperation that
come from a united global economy, critics acknowledge that tightly integrated
global economic markets carry greater potential for global recessions.
Advocates
of cultural globalization point to improved acknowledgement of human rights on
a global scale and shared understanding of our impact on the environment, while
critics decry the decimation of unique cultural identity and language,
especially in the age of social media.
Advocates
view the increased ability to travel and experience new cultures as a selling
point of cultural globalization. However, critics point out that increased
travel has the potential to increase the risk of pandemics, with the H1N1
(swine flu) outbreak of 2009 and the coronavirus of 2020 serving as two
examples of serious diseases that spread to multiple nations very quickly.
History of globalization
Although
many consider this process a relatively new phenomenon, globalization has been
happening for millennia.
The
Roman Empire, for example, spread its economic and governing systems through
significant portions of the ancient world for centuries.
Similarly,
the trade routes of the Silk Road carried merchants, goods and travelers from
China through Central Asia and the Middle East to Europe and represented
another wave of globalization.
European
countries had significant investments overseas in the decades prior to World
War I, prompting some economists to label the prewar period as an earlier
golden age of globalization.
The
term globalization as
it's used today came to prominence in the 1980s, reflecting several
technological advancements that expediated international transactions.
Globalization
has ebbed and flowed throughout history, with periods of expansion, as well as
retrenchment. The 21st century has witnessed both. Global stock markets
plummeted after the Sept. 11, 2001, terrorist attacks in the United States, but
rebounded in subsequent years.
Overall,
however, the early 21st century has seen a dramatic increase in the pace of
global integration, driven primarily by rapid advances in
technology and telecommunications.
Future of globalization
Technology
advances, particularly block chain, mobile communication and banking are fuelling
economic globalization.
Nonetheless,
the rapid pace of globalization in the early 21st century could be slowed or
even reversed by potentially rising levels of protectionism and
anti-globalization sentiment happening in several countries.
Aside
from nationalism and the growing trend of increasingly conservative economic
policy, global trade is under rising threat from climate change, decaying
infrastructure, cyberattacks and human rights abuses, all requiring responses
from both corporations and governments, according to the Council on Foreign
Relations.
(tahirpashton@gmail.com)
