What is globalization? What are the positives and negatives of Globalization?

 

Globalization is the process through which integration and interaction of countries, companies, and people across the globe take place. The process is supported by information technologies, with the aim of bringing economies of various countries together. It is only through globalization that people, services, and goods get to move freely across the world, in a manner that is linked and smooth.

Globalization has increased international trade, thus allowing different countries to utilize competitive advantages in terms of production. If a manufacturing company suffers lack of resources, it can transfer production to another country which is richer in or closer to necessary natural resources, where labour is cheaper and the production cost is lower. Thus, both sides enjoy the benefits, through the creation of employment in shipping, retailing, marketing and manufacturing industries.

Globalized trade is the practice of importing and exporting products from and to other nations. Typically, companies do this in order to access products that they can't find domestically, to open new markets for their products, or to find cheaper business environments through a competitive advantage, i.e. afavourable position a business holds in the market which results in more customers and profits. It is what makes the brand, product, or service to be perceived as superior to the other competitors. For example, a well designed distribution networks, maintenance or a brand itself can create a competitive advantage.

 Some global trade is about bringing in something that you simply can't find at home. A company with something to sell will try hard to trade into new countries, because doing so means access to a new population of consumers. Trade also allows companies to seek cheaper business environments, often by finding more inexpensive sources of materials and labor. For American consumers it appears in the form of products made in China, for example, or callcenters moved to India. Both nations offer inexpensive source of labor, driving companies to relocate certain operations in an effort to gain an advantage over their competitors.This is known as competitive advantage.

Global trade allows countries to specialize in products and services that they are well suited to provide. This is known as comparative advantage. It's the process of countries using trade to buy cheaply the products it would be more expensive for them to produce, while at the same time specializing in the products they produce most efficiently.

Technology is the main drive behind globalization. In the 21st century it has allowed globalization to take on a more immediate presence in people's lives than ever before. Telecommunications infrastructure (namely: the internet) and transportation infrastructure have become faster, cheaper and easier to move products, people and ideas around the world than ever before. Individuals can access intellectual property created anywhere, consumers can order products made almost anywhere and have it shipped to almost anywhere with few restrictions and at increasingly inexpensive costs.

On the other hand, the phenomenon of globalization is under discussion and is considered quite controversial as it has both positive and negative sides. As a result of globalization, the economic growth of both developing and developed countries is affected positively and negatively.

We can experience the most visible impacts of globalization affecting the economic sphere. Globalization has led to a sharp increase in trade and economic exchanges. It also fostered a rapid global industrial development that allowed the rapid development of technologies and commodities available nowadays. Knowledge became easily shared and international cooperation among the brightest minds speeded things up.

Competition in the market also occurs largely due to globalization. As a result, the positive effects are visible, since global competition leads to manufacturing products of high quality. For domestic companies to survive in the market, they are forced to raise their customer satisfaction level, as well as their standards, while fighting keen competition from foreign companies. However, globalization has led to increased market competition, hence leading to fluctuation in prices. For example, developed countries such as the USA have been forced to reduce their prices, because countries such as China offer the same products at cheaper prices. This is because the production cost in China is lower than in the USA so the latter are forced to lower their prices to withstand the competition.

Globalization has resulted in numerous positive effects on culture. Instead, coming together of various cultures has made the world today a better place. The welcoming of people from various backgrounds and civilizations has resulted in the creation of new cultures, thus leading to societal growth.On the other hand, cultural globalization refers to the interpenetration of cultures which means nations adopt principles and beliefs of other nations, losing their unique culture.

Due to globalization, most jobs are insecure and temporary. The impact is mostly felt in developed countries since they can outsource cheaper white collar and manufacturing jobs. As a result people in developed countries lose or have fewer jobs.

However, growth of production means growth of utilization of natural resources. As a result, pollution has increased, leading to climate change. The changes in climate are now a serious threat to humanity and the future of the world, all because of globalization.

 

https://youmatter.world/en/definition/definitions-globalization-definition-benefits-effects-examples/

 

Comprehension

I. Read the text again. Give extensive answers to the questions. Use the following expressions to start your answer: (for more useful phrases use App2)

I'm inclined to think that...................

I think no one doubts that.............

I do not pretend to be the expert in this issue but I think.......

1. What is globalization?

2. How does globalization facilitates consumers access to goods and services?

3. How do technologies help trade internationally?

4. What are positive consequences of globalization?

5. What are negative consequences of globalization?