Contemporary World Activity 1

 

                       Globalization

  Globalization is the process by which ideas, knowledge, information, goods and services spread around the world. In business, the term is used in an economic context to describe integrated economies marked by free trade, the free flow of capital among countries and easy access to foreign resources, including labor markets, to maximize returns and benefit for the common good. Globalization, or globalisation as it is known in some parts of the world, is driven by the convergence of cultural and economic systems.

A. Broad and Inclusive Definition

The Advantages and Disadvantages of                    Globalization

The Advantages of Globalization 

• Increases economic growth.

By increasing the international exchange of goods, technological advances, and information, globalization increases economic development for any country participating in the global economy. An increase in economic growth means better living standards, higher incomes, more wealth in a country, and, often, less poverty—in short, the overall well-being of a country.

• Makes production more affordable. 

A global market allows businesses wider access to production opportunities and consumers, meaning that there are more goods available at a wider range of price points.

• Promotes working together. 

When different countries come together to engage in trade and investments in a global financial market, they become interdependent and often come to rely on one another for certain goods and services.

• Brings opportunities to poorer countries.

Globalization allows companies to move their production from high-cost locations to lower-cost locations abroad—this means bringing jobs, information technology, and other economic opportunities to countries with fewer resources.

The  Disadvantages of Globalization

• Unequal economic growth. 

While globalization tends to increase economic growth for many countries, the growth isn’t equal—richer countries often benefit more than developing countries.

• Lack of local businesses. 

The policies permitting globalization tend to advantage companies that have the resources and infrastructure to operate their supply chains or distribution in many different countries, which can hedge out small local businesses—for instance, a local New York hamburger joint may struggle to compete with the prices of a multinational burger-making corporation.

• Increases potential global recessions.

When many nations’ economic systems become interdependent, the likelihood of a global recession increases dramatically—because if one country’s economy starts to struggle, this can set off a chain reaction that can affect many other countries simultaneously, causing a worldwide financial crisis.

• Exploits cheaper labor markets.

Globalization allows businesses to increase jobs and economic opportunities in developing countries, where the cost of labor is often cheaper. However, overall economic growth in these countries may be slow or stagnant.

• Causes job displacement. 

Globalization doesn’t result in an increased number of jobs; rather, it redistributes jobs by moving production from high-cost countries to lower-cost ones. This means that high-cost countries often lose jobs due to globalization, as production goes overseas.

B. Narrow and Exclusive Definition

        Advantages of Globalization

Globalisation helps in pooling all the resources together. Globalisation helps in the development of underdeveloped countries. Globalisation encourages free trade among nations. Globalisation creates more employment opportunities.

   

      Disadvantages of Globalization

It will benefit the wealthy people more than the poor. It may lead to outsourcing of jobs from a native country due to availability of cheap labour in another country. It will result in an increase in emission of greenhouse gases that will have a direct impact on the environment.

Resources: https://www.investopedia.com/terms/g/globalization.asp 

https://www.masterclass.com/articles/how-globalization-works-pros-and-cons-of-globalization#what-are-the-disadvantages-of-globalization

https://byjus.com/questions/what-are-the-advantages-and-disadvantages-of-globalisation/