What actually is Globalization?
A more often thing a person nowadays gets to hear is: We are developing as globalization is increasing. But, what exactly does globalization mean?
According to John B. Larson (U.S. Representative), Globalization is not a monolithic force but an evolving set of consequences- some good, some bad and some unintended. It is the new reality.
As in the dictionary, the typical meaning of the word ‘Globalization’ is:
‘The process by which businesses or other organizations develop international influence or start operating on an international scale.’
The movement of goods, capital, people and information freely anywhere, anytime is what we refer to as Globalization. It is an emerging trend in business. This has basically increased the interdependence of economic and cultural activities hugely. It has triggered the integration and interconnection of international world views, products, ideas, information and so much more. The term Globalization is only recent, but has its roots deepened in the 1970’s. Thus, the basic four aspects are varying from all the basic keys of everyday living as trade and transactions, capital and investment movements, migration and movement of people, and the dissemination of knowledge. There are recent further factors added too such as global warming, cross-boundary water and air pollution and overfishing of the ocean. It opens the local and national perspectives of the people for a broader outlook with the transfer of goods and capitals across national frontiers. It is the key factor for the development in today’s era.
As usual, everything comes with a huge number of pros and cons. The word Globalization in itself has become a huge controversial topic for people all over the world. Those in favor say that it allows poor countries and their civilians to become economically strong and raise their standards of living. Those opposing the concept say that globalization has enhanced the international free market, thus benefitting the multinational corporations, but on the stake of local cultures, local markets and the common people. These critics actively work to strengthen domestic economics at the expense of free trade. Here are some of the major pros and cons of globalization:
Pros of globalization:
For a normal person, it affects the standards of living and the quality of life. Standard of living typically refers to the level of wealth, comfort and necessities of a certain class relatively to its geographic area. Quality of life is the degree of a person enjoying his/her possibilities. Positively it has improved the standard of living for the masses through transportation, health care facilities, education, trade ease and many such more factors.
On corporate level, it affects the productivity and the balance sheets. It is the major factor now deciding the product and service lifecycles. Product life cycle refers to the period of time over which an item is developed, brought to the market, and finally removed from the market. It is also a major factor for the policies by the government, affecting the people’s regulations and trades. It decides the governments monetary policies. A monetary policy is the action of a bank, currency board or other regulatory committee that determines the size and rate of the money supply a growth. So, as a result if the monetary policies are good enough this will attract huge foreign investors, thus developing the economy. Technology has been another major factor for driving the wave of globalization. The huge advancement of information technology has dramatically enhanced the economic life, giving a more detailed, faster and informed view of the economic trends across the globe, thus allowing easy transfers of the assets and more often collaborations with the far-flung partners.
Globalization has rightfully increased the tendency of investment funds and businesses to move beyond domestic and national markets to markets all-round the globe, thereby increasing the interconnection of the world. It has positively increased the international trade and cultural exchange, thus minimizing the differences and distances between us.
Cons of globalization:
On the other hand, it has been affecting badly the developed nations. This is because the manufacturing operations prefer places where manufacturing and production costs are low, thus moving to the developing nations. The monetary policies if are not up to the mark, not providing the right amount of profit to the investors, it can thus work the other way around which can hugely affect the country’s economy by degrading it. It is bluntly widening the gap between the rich and the poor. Due to outsourcing, it has deprived many of their rightful jobs and resources. This is exacerbating the income inequalities. The interchange and interconnection of cultures has led to the loss of traditional values. It has increased the dependence of a country on another for goods and services.
Thus, a proper amount of resistance both at popular and governmental level as people has become extremely important to manage the flow of labor, goods, capital and ideas constituting the huge wave of globalization.