WHAT IS

GLOBALIZATION?
• It is a process of interaction and integration among the
people, companies, and governments of different
nations, a process driven by international trade and
investments and aided by information technology.
• Globalization can also be defined as the free movement
of goods, services, and people across the world in a
seamless and integrated manner.
• It makes the world more accessible to everyone.
 TYPES OF GLOBALIZATION
• Economic globalization. Here, the focus is on the
integration of international financial markets and the
coordination of financial exchange.
• Free trade agreements, such as the North American Free
Trade Agreement and the Trans-Pacific Partnership are
examples of economic globalization.
• Multinational corporations, which operate in two or more
countries, play a large role in economic globalization.
• Political globalization. This type covers the national
policies that bring countries together politically,
economically, and culturally. Organizations such as
NATO and the UN are part of the political globalization
effort.
• Cultural globalization. This aspect of globalization
focuses in large part on the technological and societal
factors that are causing cultures to converge. These
include increased ease of communication, the
pervasiveness of social media, and access to faster and
better transportation.
 EFFECTS OF GLOBALIZATION
• Individuals. Here, a variety of international influences
affect ordinary people. Globalization affects their access
to goods, the prices they pay, and their ability to travel to
or even move to other countries.
• Communities. This level encompasses the impact of
globalization on local or regional organizations,
businesses and economies. It affects who lives in
communities, where they work, who they work for, their
ability to move out of their community and into one in
another country, among other things. Globalization also
changes the way local cultures develop within
communities.
• Institutions. Multinational corporations, national
governments, and other organizations such as
colleges and universities are all affected by their
country's approach to and acceptance of
globalization.
• Globalization affects the ability of companies to
grow and expand, a university's ability to diversify
and grow its student body, and a government's
ability to pursue specific economic policies.
 BENEFITS OF GLOBALIZATION
• Solves economic problems. Globalization moves
jobs and capital to places that need these resources. It
gives rich countries access to lower-cost resources and
labor and poorer countries access to jobs and the
investment funds they need for development.
• Promotes free trade. Globalization puts pressure on
nations to reduce tariffs, subsidies, and other barriers
to free trade. This consequently promotes economic
growth, creates jobs, makes companies more
competitive, and lowers prices for consumers.
• Spurs economic development. Theoretically,
globalization gives poorer countries access to foreign
capital and technology they would not otherwise have.
Foreign investment can result in an improved standard
of living for the citizens of those nations.
• Encourages positive trends in human rights and the
environment. Advocates of globalization point to
improved attention to human rights on a global scale and
a shared understanding of the impact of people and
production on the environment.
• Promotes shared cultural understanding. Advocates
view the increased ability to travel and experience new
cultures as a positive part of globalization that can
 NEGATIVE CONSEQUENCES OF GLOBALIZATION
• Destabilizes markets. Critics of globalization blame the elimination of trade
barriers and the freer movement of people for undermining national policies and
local cultures. Labor 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 labor 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. Industries such as fishing and logging tend to go
where business is most lucrative or regulations are less strict, which has resulted
in overfishing and deforestation in some parts of the world.
• 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.
• Facilitates global recessions. Tightly integrated global markets carry a
greater risk of global recessions. The 2007-2009 financial crisis and great
recession is a good example of how intertwined global markets are and
how financial problems in one country or region can quickly affect other
parts of the world. Globalization reduces the ability of individual nations to
effectively use monetary and fiscal policy to control the national economy.
• 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. At the same time, the
internet and social media are driving this trend even without the movement
of people and commerce.
• Increases the likelihood of pandemics. Increased travel, critics say, has
the potential to increase the risk of pandemics. The H1N1 (swine flu)
outbreak of 2009 and the coronavirus in 2020 and 2021 are two examples
of serious diseases that spread to multiple nations quickly.
 FUTURE OF GLOBALIZATION
• Technological advances, particularly blockchain, mobile communication,
and banking, are fueling economic globalization.
• Nonetheless, rising levels of protectionism and anti-globalization sentiment
in several countries could slow or even reverse the rapid pace of
globalization. Nationalism and increasing trends toward conservative
economic policies are driving these anti-globalization efforts.
• Global trade is also made more difficult and facing rising threats from other
factors, such as these:
• climate change
• decaying infrastructure
• cyber attacks
• human rights abuses
THE TAKEAWAY
• Globalization is a longstanding trend that is in the
process of changing and possibly slowing. There
are advantages to the more open border and free
trade that globalization promotes, as well as
negative consequences.
• In a modern, post-pandemic world, individuals,
businesses, and countries must consider both
sides of the globalization issue. Learn how
companies are rethinking global supply chains to
avoid disruption and reap the benefits of
globalization.