Globalization is referred to as a procedure through which incorporation and collaboration of nations, firms, and people take place throughout the globe. It is the outcome of the investment, international trade and outsourced manufacturing. All of them are assisted by information technology, that focusses on bringing varied economies at a single place.
Globalization is responsible for services, goods and people to move freely throughout the world in a smooth way. Just like any other technology, globalization also has its share of pros and cons. This article will reflect at both the positive and negatives of it on different areas of operation of a country.
Working of Globalization
Globalization is referred to as a monetary concept. It works by facilitating the movement of people and goods across borders. In order to accomplish the process smoothly, all trade, markets and investments get integrated. It reduces and prevents any obstacles to ensure nations get benefitted with uninterrupted flow of services and goods.
Positive effects of Globalization:
Boosts international trade
One of the biggest benefits of globalization is in the area of international trade. Globalization enables business trade between different nations in the world. It generates competition between nations that in turn improves international trade.
Technology is what drives Globalization. The enhanced technology results in quick increase in communication and connectivity. With globalization, people can share ideas with others all across the world within a few minutes via the internet. Earlier globalization, printing press has been the major communication medium. Globalization led to the introduction of email-based communication that is several times faster, reliable and efficient than other modes of communication.
Easy and quick transportation
Globalization has led to an improvement in transportation with introduction of modern age transportation modes. It has made it easier for people to move around the globe with ease. Modern transportation modes such as ships, trains and airplanes have made it quick, safe and efficient for people to reach their destination.
Positive impact of globalization is also seen in the form of increasing number of financial transactions across the international borders. This phenomenon has led to the development of multinational firms. Economies of different nations have been seen to make more investment in other geographical regions that observes high market competition. The rise in competition has led corporations to widen their market and compete with their competitors. It helps them attract more investors, thereby expanding their market.
Increased competition and high-quality products
Globalization is the main factor responsible for competition in the global market. This competition has resulted in production of superior quality products. Several developed economies in the form of multinational firms strive hard to get customers attention and establish their market in a developing country.
This, in turn, benefits the consumer in the form of discounts, offers, high-quality and other lucrative incentives. The improved product and service quality helps in meeting customer demands effectively. In order for domestic countries to survive in this tough competition, they are compelled to increase their standards and customer satisfaction levels to give a good fight to foreign multinational firms.
Improved job opportunities
Globalization has also positively impacted the job sector. It has led to the rise of job openings and new industries in developing nations.
Negative Effects of Globalization:
Damage to the Environment
Globalization is not beneficial for the environmental. It leads to increased production of goods and services that increases use of natural resources. Increased business trade leads to increase in transportation needs. This requires use of more amount of fossil fuels. The overall outcome of globalization is seen in the form of pollution that ultimately leads to the change in climate. Such climatic changes are seen to be an acute risk to the overall humanity and the world.
Fluctuation in prices
Due to increase in competition, there is seen fluctuation in prices of products and services. This is because every company works to attract more and more customers to it. So, if one company is offering product at a lesser price, then the other company will also have to reduce the price of its goods. Only this way it can withstand the competition. This impact of globalization effects the companies in a negative way. Sometimes they are not able to make any profit. The ability to withstand social welfare also gets reduced.
Loss of workforce
Globalization is not seen to be beneficial for developing nations. It leads skilled and talented workforce to leave their homelands and move to developed nations in search of better work opportunities and income. Leaving their family and going to other nations for work, disrupts the family and communities.