Globalization is the tendency of investment funds and businesses to move beyond national and domestic markets into other markets around the globe, thereby increasing the interconnection of the planet. Globalization has had the effect of increasing global trade and cultural exchange.
BREAKING DOWN ‘Globalization’
Proponents of globalization say that it assists developing countries catch up to industrialized countries much faster through improved employment and technological advances; critics of globalization say that it disturbs national sovereignty and allows rich nations to ship domestic jobs overseas where labor is significantly cheaper.
Globalization can be used to explain the recent integration of national economies, businesses, cultures and government policies around the world. This integration has occurred through increases in the technical skills and efficiency of world commerce, communication and transportation. Mostly, globalization refers to the economic integration of the global markets, but it’s also utilized to refer to the socio-cultural integration that’s been brought on by the rise of the Internet.
Public policy and technology are the two main driving factors behind current globalization. Recent implementations of government policy, both nationally and internationally, have opened economic borders for countries throughout the world. Over the last twenty years, world governments have incorporated a free-market financial system into fiscal policies, monetary policies and trade agreements. This evolution of economic systems has stimulated domestic production potential and opened countries to increased financial opportunities overseas. World governments now focus on decreasing barriers to trade and actively promote global commerce concerning investments, goods and services.
Technology has also been a significant reason for the growth in globalization. Advancements in information technology (IT) and the flow of data across boundaries have enabled individuals to take charge of their financial lives. Technology has helped people become more educated about economic trends and enables people to move financial assets and take advantage of investment opportunities. Technology has increased the capacity to communicate globally, closing the gap between different cultures.
The Controversy Behind Globalization
At first glance, globalization is an wonderful development. Those who do not believe in globalization, however, cite the fact that it has benefited corporations in the Western world at the damage of developing economies, cultures and people. These critics actively work to strengthen domestic markets at the cost of free trade.