Title: Globalisation has benefited everyone. It helped all the people to increase their living standards, brought advantages to organisations and businesses and enabled economies to develop.” Discuss
Introduction
We live in a self-regulating world. Countries are influenced by the economic health of other countries and by their governments’ policies. Problems in one part of the world can spread to other parts of the world. There many major issues in which the development of globalisation affects individual economies to begin with they can affect economies through financial markets and secondly they can also affect the economy through trade. Over many years countries have established communication progressively. In recent times, the speed of global integration has considerably improved. There have been enhanced changes in communications, transportation, and computer technology have given the process new movement and made the world more interdependent than ever. Multinational corporations produce goods in many countries and sell to customers around the world. Money, technology and raw materials move ever more swiftly across national borders. Along with products and finances, ideas and cultures circulate more freely. As a result, laws, economies, and social movements are structuring at the international level.
Advantages of globalisation
There are many advantages when considering globalisation its has increased trade between nations which is a benefit because it means there is an increased level of liquidity of capital this allows investors from poorer parts of the world (developing countries) to invest in those countries which are well established and further developed. Globalisation means that there is increased flexibility for large corporations to operate across borders without restrictions. Another positive impact of globalisation is that the flow of communication between nations and corporations increase and vital information can be transferred more effectively and quickly.
Technology
With technology now getting more and more advanced it has been easier to communicate with anyone at any time. In recent times global news providers such as BBC Sky and CNN have expanded systems built around the 24 hour clock, with the news room moving between continents as the sun and daylight move around the world; this permits individuals to have 24 hour access to the news. The continuous nature of having the news available 24 hours a day as well as other large associations such as financial centres and global businesses means that opportunities are provided for individuals wherever they are located in the world whether its midnight in one country its 10 am in another which means global businesses are not controlled by time.
Culture
The development of globalisation has somewhat been also encouraged by a collection of cultures. For example, St Patrick’s Day is the celebration of the patron saint of Ireland. Yet in this day and age it is now celebrated by many other nationalities. Individuals from the UK, US and Australia also celebrate St. Patricks Day this could be due to the fact that many Irish have emigrated to other parts of the world but the main concern is that other parts of the world are more accepting and understanding of other cultures which assists with the integration of nations.
* Travel- increased international trade encourages the acceptance of other cultures. Travel makes it much easier for trialling with diverse types of food language and customs.
Disadvantages of globalisation
With advantages come disadvantages too. Globalisation can have negative effects and threats on nations. Firstly, the constant boosting flow of skilled to non-skilled jobs from developed to undeveloped nations as large organisations seem to be searching for the cheapest labour available. Secondly larger can have more of an influence when it comes to decision making which leave smaller poorer countries without a say; no equal opportunities.
Trade restrictions
In economics the law of comparative advantage states that economics should specialise in the goods that they are comparatively better at producing (Economic for business, 2007). Comparative advantage and the gains from trade are very influential arguments and provided many governments with a reasonable motive for freer international trade; a problem with comparative is that it raises economic output for the world which does not necessarily make improvements in the economic state of individual nations. E.g. In trading with the UK, if Germany decided to abandon car manufacturing and began to focus more on the production of T.Vs employees from the car manufacturing will be left jobless and will not be skilled in the area for manufacturing T.Vs so in this case German car makers will not find appeal to the comparative advantage. On the other hand with uncompetitive industries the government can be asked to provide protectionist measures; these are put into place in order to reduce the competitiveness of international rivals (Economic for business, 2007).
Non- Tariff barriers
Trade can be restricted in other ways by the government one of which is by a quota. A quota can control trade by limiting the amount of a product that can be brought in into a country for example; a copper quota may limit the importation of copper to 300 million tonnes a year. Due to the fact that a quota limits international supply the price is usually increased.
* Reason for protecting trade- Governments may wish to support an industry that has strategic value for example copper could be very important for China. The Chinese government would not like to see their economy depend upon another economy for copper; they also fear that future disputes may mean that the supply of copper is stopped.
At the outset, language is an evident barrier to good communication. Ordering new materials supplies in a foreign language may be done with no trouble with the help of a translator, but to make clear complex technical methods or setting up marketing plans and recruitment will oblige a considerable amount of understanding of traditions and laws that may be relevant. Secondly local laws may be significantly different of those from the original base. Labour laws may vary, trade unions may be tougher resulting in more company disputes; environmental issues may mean an increase in production cost to manufacture in a more environmentally friendly manner furthermore the most common downfall are import restrictions for example businesses operating in the EU, but from non-EU countries, are needed to source more than 70 per cent of their production inputs from within the EU. Thirdly input factors can have varying quality. Labour is a good example, basic numeracy and literacy skills varying across developed and less developed countries. These skills are crucial for training staff particularly those who require using a computer controlled machinery. Enhancing skills within the work force will be beneficial but organisations aim to cut time by taking the international company’s highly productive workers. Lastly well known global companies such as Nike have been heavily criticised for the exploitation of their workers this has a very big effect on their brand image and negative press means that they may lose out on potential shareholders.
Conclusion
After evaluating both sides for and against globalisation, globalisation has brought the world together and with time and with all the advance in technology I feel that nations will begin to interact more effectively and efficiently. International trading means that more consumers needs are met and the broaden of independence ideals to developed nations. Globalisation can be beneficial to many countries around the world because regional economic mixing means that there are concurrence between countries in a geographic region this lowers tariff and non-tariff obstructions to the free flow of merchandise, services, and issue of manufacturing between each other.
Word count: 1293
References
“Economics for business” 2nd edition (2007) David Begg and Damian Ward published by: McGraw- Hill Education pgs 319-348
“Economics” fourth edition (2000) John Sloman published by: Pearson Education Ltd pgs 725-741
Dark September Available at http://www.darkseptemberrain.com/ideas/advantages.htm
Advantages and disadvantages of globalisation (accessed 22.03.2010)
Global Policy available at http://www.globalpolicy.org/globalization.html (accessed 22.03.2010)