The literal definition of globalization is the process by which businesses or other organizations develop international influence or start operating on an international (read: ‘global’) scale. While the definition certainly offers the basic meaning of globalization, it doesn’t really reflect or shed light on the true nature, scope and impact of globalization. It is not as simple as an American manufacturer finding a market in Europe or a Japanese startup selling technology to an Australian telecom. Globalization, in its truest sense, is industrial and obviously economic, cultural and geopolitical as well as personal in its scope.
Globalization is clearly a doubled edged sword. It can do wonders for a country, its people and indeed for the world. It may also put a country, its people and all their interests in jeopardy. One must carefully assess the advantages and disadvantages of globalizations.
A Piece Of History!
Many experts say that globalization has existed for hundreds of years, ever since traders took to the Silk Route, explored new worlds and established trade. It is true that explorers and increasing trade across continents had planted the seeds of the concept that has developed into globalization today. However, it is just outright inaccurate to even presume that globalization existed hundreds of years ago. International trading doesn’t encompass globalization, nor vice versa.
Globalization is the evolution of a world into one market, a connected economy, a shared and associated community, inseparable cultural and religious values despite the differences of hundreds of languages, thousands of dialects, dozens of religions and innumerable ethnicities, a world where everyone is an integral part of humanity at large and everything that affects one spectrum has a rippling effect on others.
Advantages of Globalization
1. Empowerment to Businesses
Most regions on the planet have something special to offer to the rest of the world. A particular region may be known for its grapes and thus wine. A region may be known for its apples. Some regions are rich in minerals, from iron ore to bauxite. Some regions have treasure troves of oil or coal, natural gas or gold and diamond. Then there are regions that have championed manufacturing, some regions are the sheer leaders in technology while some other regions have taken up the responsibility of farming to feed millions, if not a billion. Globalization allows every region to offers its finest products or services to other regions. You could procure cheaper steel or cheaper food, better technology or better quality manufactured goods.
2. Offers A Larger Market for Businesses
Ecommerce is a byproduct of globalization, so was the internet and the social networks or social media. If the world had not been connected already, albeit in myriad ways and not as efficiently and in real time as we are now, then these twenty-first century wonders would have taken some time to evolve. In other words, globalization allows companies to thrive, the economy benefitting from globalization gets a boost, there are more new businesses, new jobs and people can attain the prosperity that they usually desire. Globalization helps startups to grow, it helps established businesses to become larger and better, jobseekers have more options and one doesn’t have to stay confined to one location or place to live the life one desires.
3. Helps Consumers
People can get cheaper goods, better services, technologically enhanced products, one gets more choices, there is fiercer competition, predatory pricing and strategies don’t work and even countries get to pick and choose how they would want to run their economy, since there is a plethora of industrial enterprises and policies that one can endorse.
4. Brings People Together
Globalization has a wonderful side effect. It brings people together. Throughout history, people who have traveled and have mingled with different cultures, people from various regions of the planet and have basically understood more of the world have always returned home wiser. Today, people from various countries come together, celebrate the cultures of one another, even the religious festivities. Peaceful coexisting, mutually beneficial relationships and willingness to practice humanity as the primary religion or faith, mindset or belief are the byproducts of globalization.
Disadvantages of Globalization
1. Give too Much Dominance to a Limited Number of Countries
Globalization is not without its share of shortcomings and some dangers. Globalization, very much like industrialization and the erstwhile colonization, can make one country or region very powerful. Whoever gets to dominate global trade and commerce or has the resources to be the primary supplier and not the consumer, will have an upper hand. Having the world or a substantial part of the world depend on one nation or a certain group of companies can be extremely detrimental to the balance of power and influence.
2. Make a Poor Country, Poorer
It can lead to an economic collapse of countries that struggle to change with times and there is an overwhelming challenge of competition that can become unwinnable. For instance, there are countries that offer cheap labor which can never be matched by developed countries. Take China for instance. The costs of manufacturing in China are so low that even Apple, that prides itself as an American company, cannot resist the temptation of having everything made there and assembled in California. This kind of practice, which is integral to globalization and rationally unavoidable, can ruin the economies of countries that don’t have the advantage of labor, low wages and other elements such as weaker labor laws, lenient policies pertaining to doing business and willful corruption that often helps industries.
3. Can Inadvertently Damage the Economy of Certain Regions in the World
While globalization can improve an economy, generate jobs and offer growth to business, it can at the same time cause a recession in certain regions or countries of the world. In such a scenario, instead of a global balance, all one attains is imbalance. There is a reason why international, bilateral and multilateral trade agreements exist so one particular country doesn’t have to deal with a massive trade deficit vis-à-vis another. But there has to be more than a few fair and free trading agreements.
4. Facilitates the Degradation of Our Environment
As economy took to the driving seat, there was scant regard for the means adopted to attain that desired prosperity. Globalization can affect everyone but there is no universal or global law to be applied to all countries participating and benefiting from globalization. Hence, something that may be banned in the United States or the United Kingdom, for instance certain types of cars, may not be banned in a South American country or China. In effect, globalization can worsen the climate problem. There is also a flip side. It isn’t that only developed nations are the worst hit. The industrially developed countries and economic superpowers are the ones who took the initiatives to cause the environmental problem we have today. Despite that, the demands of such countries are now triggering environmental problems in poor or underdeveloped countries. Thailand and other South East Asian nations are indulging in rampant deforestation to supply wood and wooden products to the developed countries.
5. Favors Regions Rich in Resources
These resources can be natural or manmade. From education to skilled labor, fertility of the soil and thus agricultural produce to flora and fauna, economic policies to geographical advantages; all such factors provide unfair but unavoidable advantage to some countries.