The Impact of Globalization

The Impact of Globalization

Globalization refers to the growing interdependence of the world’s economies, cultures, and population. Globalization has been brought about by the gradual increase in cross-border trade in commodities and services coupled with the advancements in technology. The opening up of borders globally has enabled the free flow of people, information, and investments. Countries have built partnerships and alliances to facilitate the economic, social and political development of their nations. The advent of globalization can be traced back to ancient times, with its impact being felt now more than ever before in history. Globalization has created both opportunities for the development of humanity and challenges that tend to cripple the gains made thus far. As with significant human advances, globalization has benefited the majority of the society, while at the same time producing harm to certain groups. This paper aims to discuss the impacts of the global interdependence of nations while drawing in the opportunities and challenges posed by globalization.

History of global integration

The improvements in transportation and technology have enabled the quest of humans to move to distant places for settlement, production and trade. The genesis of global integration was propelled by several breakthroughs in various industries such as steamships, railroads, telegraphs, among others (Vanham, 2019). These breakthroughs increased trade activities between countries thus opening up economic, social and political cooperation among its people. The trend in globalization waned and crushed during the catastrophic period of the world wars and the great depression (Vanham, 2019). However, after these turbulent times, the United States led to the revival of globalization through negotiated international trade and capital investments in partner countries. The second wave of globalization continues to thrive though impeded by periodic economic downturns and political pressures.

Impacts of Globalization

Globalization has enabled the global integration of communities, thus drawing the world together. The economic integration among various countries has helped spur the growth of businesses, create job opportunities, and increase in innovation. Globalization has encouraged the production of more goods and services to satisfy diverse human needs and wants of people in different places. The rise in market demand has enabled countries to take advantage of comparative advantage and produce goods and services using the least amount of resources (Kolb, 2019). Production has now become more efficient, leading to the production of cheaper products which have become affordable even to lower-income households in various parts of the globe. Globalization has enabled the scaling up of businesses due to the creation of broader markets and wider customer base. Larger global markets have enabled organizations to reach out to more customers in different countries. The net effect of economic integration has been to break down pre-existing boundaries, thus allowing countries with varying specialities to engage meaningfully and productively with each other.

The advent of globalization has widened the scope of job opportunities in different countries. Higher paying jobs have opened up in various industries, such as the manufacturing sector. Better paying opportunities have arisen in high-tech areas such as the production of transport equipment, computers, and chemicals (Kolb, 2019). Other job positions have opened up in high-skill work in diverse business fields such as in finance, investment and real estate. Trade liberalization has resulted in an increase in skill premium jobs in various global trade destination. High-skilled workers in the fields of legal consulting, engineering, information technology, research, and management have been the biggest beneficiaries of globalization. The free flow of human resources has made it possible for people to seek employment in countries with numerous job opportunities for non-local residents. The ease of movement of labor has been a positive impact of globalization which has contributed towards global interconnectedness.

Despite the pros, globalization has been criticized for perpetuating several challenges in society. Job displacement has been among the critical challenges of globalization. In as much as the global integration has been praised for opening up job opportunities, there has been a lingering threat of job displacement. Globalization does very little to contribute towards the increase in the overall number of jobs in the labor market. The expansion of global commerce led to intensified import competition in industries such as furniture, apparel, auto parts, steel and electrical equipment. Lower-wage workers in these affected industries in certain geographic locations experienced massive earnings losses (Dudley, 2017). Globalization has disadvantaged lower-wage workers who lack the skill and labor mobility to transition to other higher-wage jobs in other lines of work. In addition, globalization has been an existential threat to cultural diversity and local cultures (Dudley, 2017). The interconnectedness of people has contributed to an increase in cultural tensions which portend negatively to human development and progress.

In summary, globalization has benefited the majority of the society, while at the same time producing harm to certain groups. Globalization has created several opportunities that have enabled the development of humanity. Such opportunities include an increase in job openings, economic integration, innovation, and advancements in technology. However, globalization has also been associated with challenges such as job displacement and cultural conflicts and tensions. Whereas the opportunities of globalization have led to global interconnectedness and thus drawn people together, the challenges may act as an obstacle to integration, dividing the world farther apart.

References

Kolb, M. (2019).  What Is Globalization? And How Has the Global Economy Shaped the United States? Peterson Institute for International Economics. Retrieved from https://www.piie.com/microsites/globalization/what-is-globalization

Dudley, W. (2017). Benefits and Challenges from Globalization. New York Fed. Retrieved from https://www.newyorkfed.org/newsevents/speeches/2017/dud170511

Vanham, P. (2019). A brief history of globalization. World Economic Forum. Retrieved from https://www.weforum.org/agenda/2019/01/how-globalization-4-0-fits-into-the-history-of-globalization/