Globalization is the way to open a business, improve technological growth on the international level. It is the way to manufacturers and producers of the product to sell their products globally, without any restriction. It provides a huge profit to the businessmen as they get low-cost labour in developing countries easily through the globalisation. It provides a big opportunity for the companies to deal with the markets present worldwide. It facilitates any country to participate, set up or merge industries, invest in equity or shares, selling of products or services in any country.
It has impacted nearly every aspect of modern life. While some US citizens may not be able to locate Beijing, China on a map, they certainly purchase an overwhelming number of goods that are manufactured there. In this article, we will look beyond the implications and the positive effects of globalisation.
How does globalisation work in the business world?
Globalisation helps the global market to consider the whole world as a single market. Traders are extending their areas of business by focusing world as a global village. Earlier, there were restrictions on importing certain products which were already manufactured in India like agricultural products, engineering goods etc. However, at that time there was pressure from rich countries over world trade organisations, world bank and international monetary fund to allow other countries to spread their business by opening trade and market in the poor and developing countries. In India, the globalisation and liberalisation process was started in 1991 under union finance minister of that time.
After many years, globalisation has brought major revolution in India market when multinational brands established in India. Globalisation and liberalisation of the businesses in the Indian market are flooding the quality foreign products affecting the local Indian markets adversely to a great extent. Consequently, there is a downfall in the employment for the uneducated workers. Globalisation has always worked as a bonanza for the consumers and at the same time grave for the small-scale Indian producers.
What are the positive impacts of globalisation on the society?
- Globalisation has affected the students and the education sectors to a great extent as we can find every book and all the study material over the internet. The collaboration of foreign universities has also brought up a huge modification in the education system.
- Globalisation also affects the health sectors in the form of common medicines, health monitoring electronic machines etc.
- The globalisation of trade in the agricultural sector has brought a variety of quality seeds having disease resistance property. However, it costs high and becomes difficult for the farmers to afford it for the most of the times.
- It has also brought up a huge revolution in the employment sector by the spread of business like a cottage, handloom, carpet, artisans and carving, ceramic, jewellery and glassware etc.
How globalisation benefits world economics?
Most economists agree that globalisation provides a net benefit to individual economies around the world, increasing competition, limiting military conflicts by making markets more efficient, and spreading wealth more equally around the world. However, the general public tends to assume that the costs associated with globalisation outweigh the benefits, especially in the short-term, which has caused problems.
Some of the benefits of globalisation are:
- Foreign direct investment
It tends to increase at a greater rate than the growth in world trade, helping boost technology transfer, industrial restructuring and the growth of global companies.
- Innovation in the technology
Increased competition from globalisation helps stimulate new technology development, particularly with the growth in the foreign direct investment, which helps improve economic output by making processes more efficient.
- Economies of scale
It enables large companies to realise economies of scale that reduce the cost and prices, which in turn supports further economic growth, although this can hurt many small businesses attempting to compete domestically.
Risks of the globalisation:
Globalisation leads to the interdependence between the nations which could cause regional or global instabilities if local economic fluctuations end up impacting a large number of countries relying on them.
- National sovereignty
Globalisation works as a rise of nation and states but it is a risk for some international organisations, and they take it as a threat to sovereignty. Ultimately, this could cause some leaders to become nationalistic.
- Equity distribution
The benefits of globalisation can be unfairly skewed towards rich nations or individuals, creating greater inequalities and leading to potential conflicts both nationally and internationally as a result.
The bottom line of the article
Globalisation has impacted nearly every aspect of modern life and continues to be a growing force in the global economy. While there are a few drawbacks to globalisation, most economists agree that it is a force that’s both unstoppable and net beneficial to the world economy. There has always been a time lapse of protectionisms in the past, but globalisation continues to be the most widely accepted solution to ensuring consistent economic growth around the world.