What is Globalisation:

  • Globalisation is the word used to describe the growing interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.
  • Its origins can be traced back to 18th and 19th centuries due to advances in transportation and communications technology.
  • The term gained popularity after the Cold War in the early 1990s, as these cooperative arrangements shaped modern everyday life.
  • Globalization is driven by the convergence of cultural and economic systems.
  • This convergence promotes and, in some cases, necessitates increased interaction, integration and interdependence among nations.
  • Globalization is primarily an economic process of interaction and integration that is associated with social and cultural aspects.
  • The more countries and regions of the world become intertwined politically, culturally and economically, the more globalized the world becomes.

The need of Globalisation:

  • In a globalized economy, countries specialize in the products and services they have a competitive advantage in.
  • This generally means what they can produce and provide most efficiently, with the least amount of resources, at a lower cost than competing nations.
  • This can result in increased efficiency in production worldwide, lower prices and widespread economic development.
  • This increase in global interactions has caused a growth in international trade and the exchange of ideas, beliefs, and culture.

What promotes Globalisation:

  • Policies that promote free trade, open borders and international cooperation all drive economic globalization.
  • They enable businesses to access lower priced raw materials and parts, take advantage of lower cost labour markets and access larger and growing markets around the world in which to sell their goods and services.

The technologies which promote Globalisation:

Internet and internet communication:
  • The internet has increased the sharing and flow of information and knowledge, access to ideas and exchange of culture among people of different countries.
  • It has contributed to closing the digital divide between more and less advanced countries.
Communication technology:
  • The introduction of 4G and 5G technologies has dramatically increased the speed and responsiveness of mobile and wireless networks.
IoT and AI:
  • These technologies are enabling the tracking of assets in transit and as they move across borders, making cross-border product management more efficient.
  • This technology is enabling the development of decentralized databases and storage that support the tracking of materials in the supply chain.
  • Blockchain facilitates the secure access to data required in industries such as healthcare and banking.
  • Advances in air and fast rail technology have facilitated the movement of people and products.
  • And changes in shipping logistics technology moves raw materials, parts and finished products around the globe more efficiently.
  • Advances such as automation and 3D printing have reduced geographic constraints in the manufacturing industry.
  • 3D printing enables digital designs to be sent anywhere and physically printed, making distributed, smaller-scale production near the point of consumption easier.
  • Automation speeds up processes and supply chains, giving workforces more flexibility and improving output.

Concerns about Globalisation:

  • As with major technological advances, globalization benefits society as a whole, while harming certain groups.

Destabilizes markets:

  • Labour markets in particular are affected when people move across borders in search of higher paying jobs or companies outsource work and jobs to lower cost labour markets.

Damages the environment:

  • The transport of goods and people among nations generates greenhouse gas and all the negative effects it has on the environment.
  • Global travel and trade also can introduce, sometimes inadvertently, invasive species to foreign ecosystems.

Lowers living standards:

  • When companies move operations overseas to minimize costs, such moves can eliminate jobs and increase unemployment in sectors of the home country.

Damages cultural identities:

  • Critics of globalization decry the decimation of unique cultural identities and languages that comes with the international movement of businesses and people.