Globalization Advantages and Disadvantages | Pros and Cons of Globalization

Globalization Advantages and Disadvantages: Since early times, people have endeavored to reach faraway places to live, create, and trade assets.

Humans have been able to achieve these goals through improvements in the technological and transportation sectors of society. It was not till the beginning of the 19th century that global alliances formed a union to support trade and commerce worldwide.

Centuries of European colonization and trade ventures led the first wave of globalization to be driven by various communication routes across the world, such as railways, waterways, the telegraph, and other such inventions, which increased economic collaboration among multiple countries.

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Subsequent to World War II, in the middle of the 1940s, the United States began an attempt to rejuvenate worldwide trade, financing, and commerce under assigned ground rules, which gave the idea of globalization a new beginning in the world’s history, starting the second wave of globalization with a new spirit.

The swift sail of the second wave of globalization remains ongoing every day in today’s world.

That brings us to today, where a new wave of globalization has once again set sail; though faced with a plethora of challenges and obstacles, it has reached new heights.

Due to trade advancements and financial negotiations, globalization is often considered an economic and financial event. But, it encompasses a much more extensive field than just the flowing of assets, services, or money.

In a world where global powers like the US and China and the new countries of globalization have gained the ability to dominate the world market, the digital economy, at its outset during the third wave of globalization, is becoming a strength to consider e-commerce as a viable option.

Globalization is further empowered by the development of artificial intelligence but also imperiled by cross-border cybercrimes and hacking.

This article consists of information and detailed descriptions about various topics related to Globalization.

What is Globalization? Advantages and Disadvantages of Globalization 2022

Globalization is the term used to explain the increasing reliance on the world’s culture and population caused by cross-border commerce in goods and services and courses of financing and information. Countries have developed economic partnerships to promote these cross-border movements.

In simple words, globalization is how people and assets flow smoothly across countries. It is an economic notion where the integration of trade and investments with fewer obstacles hindering the flow of commodities.

Types of Globalization

• Financial globalization: It is the rise of a global economy with international monetary exchanges. When a stock market faces a decline, it negatively influences other markets and the economy as a whole.
• Economic globalization: It is the evolution of trade systems inside transnational organizations such as NGOs.
• Cultural globalization: It is the interpenetration of world cultures that, as an outcome, involves adopting national principles and beliefs of other countries by losing their originality.
• Political globalization: It refers to the development of international organizations like the UN or WHO and other bodies operating at a global level.
• Technological globalization: It is the method that interconnected people worldwide due to the power of the digital world.
• Geographic globalization: It is the new organization of different areas of the world where it is possible to travel the world without restrictions.
• Sociological globalization: The interconnection of events and consequences results in cultural diffusion and mixing of different societies.
• Ecological globalization: It is the idea of viewing planet Earth as a singular global entity.

This article aims to explain in great detail the following about Globalization:

• Advantages of Globalization
• Disadvantages of Globalization
• Comparison Table for the Advantages and Disadvantages of Globalization
• FAQS on Pros and Cons of Globalization

Advantages of Globalization

1. Alteration of Technology: The global alteration of technology is a good sign. Countries can borrow the technology via agreements and implementation for overall development. Communication will be more accessible from any part of the globe by utilizing advanced technology at minimal cost, time, and effort.
2. Better Services and GDP Growth Rate: Globalization always provides better services to people. Through technological progress, services such as water supply, networking, electricity supply, internet, and other services have become easier to deal with. Easy access to the internet is also the advantage of globalization. Globalization also ensures the participation of every country to uplift the world GDP growth.
3. Improvement of Infrastructure: Governments can deliver their services to the people more efficiently owing to the advancement of infrastructure. It is worth mentioning that economic growth and the evolution of infrastructure are harmonious with each other in the development of a country.
4. Affordable Commodities: With access to the latest technology, the countries can provide products to their citizens at affordable prices. Globalization encourages competition in domestic sectors. Companies reduce product prices or follow a discernment pricing strategy.
5. Extensions of Market: Globalization favors the extension of markets. It provides an opening for domestic companies to go global.

Companies can observe saturation in demand for their commodities or services, but through globalization, these companies can satisfy the growing needs of foreign clients.

Disadvantages of Globalization

1. Rising Inequality: Globalization can raise the problem of inequality everywhere in the world by increasing specialization and trade. By trade boost of the per-capita income, it a cause relative poverty, worldwide.
2. Growing Unemployment rate: Globalization can increase the unemployment rate since it demands higher-skilled work at a lower price. In countries where Companies are relatively incapable of producing highly skilled workers, the unemployment rate can increase in those countries.
3. Imbalanced Trades: The balance of trade refers to the ratio between export and import of commodities and services. Any country can trade with any other country, and globalization causes an imbalance in this ratio. It is also termed ‘trade deficits.’ Over the years, trade imbalance has increased in developed countries by competition in the market.
4. Environmental Harm: The speed of industrialization is rising as an outcome of globalization. Industrialization advances economic growth, but it also harms the environment. Various chemical industries use harmful fertilizers and solutions or release industrial wastes into nature that causes harm to human life and the environment.
5. Exploits poorer labor markets: Globalization enables businesses to develop jobs and economic possibilities in developing countries by often offering cheaper labor costs. Yet, overall economic growth in such developing countries may be slowed due to globalization or, worse, become stagnant.

Comparison Table for Advantages and Disadvantages of Globalization

FAQ’s on Pros and Cons of Globalization

Question 1.
To what extent is global poverty harmful to the global economy?

Answer:
Global poverty and the economy are inextricably interlinked. Globalization reduces productivity and also economic output by about 1.3 % of the total global GDP. Hence, it can adversely affect the economy.

Question 2.
Has Globalization gone in the wrong direction?

Answer:
Although Globalization has to offer positives to the global economy, it has polluted the environment and imposed miserable working conditions and meager wages on local workers, making it hard for developing countries to prosper financially.

Question 3.
How has Globalization benefitted us?

Answer:
Globalization has benefitted us by ensuring the development of economies worldwide and promoting cultural exchanges. It has made financial exchanges between companies possible.