Globalization has become one of the most debated subjects of recent times. It has been hailed as one of the best things to happen to the world by its proponents, while opponents have labeled it as neo-imperialism. Despite its challenges, the positive role it has played in changing the lives of millions of people around the world is commendable.
Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital – the world’s best talents and greatest ideas.
– Jack Welch
Although there are a host of challenges associated with globalization, it has numerous positive effects as well. Anti-globalization crusaders who represent issues such as environmental degradation, economic inequality, loss of jobs in the host country etc., have made their presence felt at various global conferences. The issues that they raise are real and can have catastrophic effects if not tackled earnestly. However, the advantages of globalization are all-pervasive and a lot of developing countries are benefiting from it. As the subject of this article pertains to the positive effects of globalization, we will focus on the positive changes it has brought to the world – both economically and culturally, and how it can very well become one of the defining factors of the present century.
Benefits of Globalization
One of the most visible effects is the improved quality of products due to global competition. Customer service and the ‘customer is the king’ approach to production have led to improved quality of products and services. As domestic companies have to fight out foreign competition, they are compelled to raise their standards and customer satisfaction levels in order to survive in the market. Besides, when a global brand enters a new country, it comes in riding on some goodwill, which it has to live up to. This creates competition in the market and a ‘survival of the fittest’ situation.
With globalization, companies have forayed into the developing countries and hence generated employment for them. But it can turn out to be either good or bad, depending on the point of view you wish to see it from. It has given an opportunity to invest in the emerging markets and tap the talent which is available there. In developing countries, there is often a lack of capital which hinders the growth of domestic companies and hence, employment. In such cases, due to global nature of the businesses, people of developing countries too can obtain gainful employment opportunities. But the developed countries have lost jobs on account of this shift of jobs to the developing world and hence it is a pinch felt by people in the First World.
Investment and Capital Flows
A lot of companies have directly invested in developing countries like Brazil and India by starting production units, but what we also need to see is the amount of Foreign Direct Investment (FDI) that flows into the developing countries. Companies which perform well attract a lot of foreign investment and thus push up the reserve of foreign exchange.
While discussing the effects of globalization, how can we forget about the impact of foreign trade on an economy. Comparative advantage has always been a factor, even in during old times. While trade originated in the times of early kingdoms, it has been institutionalized due to globalization. Previously, people had to resort to unfair means and destruction of kingdoms and countries to get what they wanted. Today, it is done in a more humane way, with mutual understanding. People who operate in uncivilized ways have to face the WTO and other world organizations that have been established with a view to control and regulate trade activities of the countries.
Spread of Technical Know-How
While it is generally assumed that all the innovations happen in the Western world, the know-how also comes into developing countries due to globalization. Without it, the knowledge of new inventions and medicines would remain cooped up in the countries that came up with them and no one else would benefit. The spread of know-how can also be expanded to include economic and political knowledge, which too has spread far and wide. The most obvious example of the spread of knowledge is that the Western world today is waking up to the benefits of Ayurveda and Yoga – traditional Indian practices, while the Western antibiotics are flooding the Indian markets and improving the quality of life (and the longevity too) of people in India.
Spread of Culture
Not all good practices were born in one civilization. The world that we live in today is a result of several cultures coming together. People of one culture, if receptive, tend to see the flaws in their culture and pick up values that are more correct or in tune with the times. Societies have become larger as they have welcomed people of other civilizations and backgrounds and created a whole new culture of their own. Cooking styles, languages, and customs have spread all due to globalization. The same can be said about movies, musical styles, and other art forms. They too have moved from one country to another, leaving an impression on a culture which has adopted them.
Spread of Education
One of the most powerful effects of globalization is the spread of education. Today, you can move in the search of the best educational facilities in the world, without any hindrance. A person living in U.S. can go to another continent for a new experience which he may not find in his home country. If one is interested, one can even get a specialization in subjects not indigenous to his country and then spread that knowledge to the home country. A good example of that is how the American managers went to Japan to learn the best practices in the field of mass production and incorporated that knowledge in their own production units.
Legal and Ethical Effects
Gone are the days where the limited jurisdiction became a hindrance in the prosecution of criminals. These days, due to international courts of justice, criminals can no longer seek asylum in a foreign country and are thus brought to justice. Due to globalization, there is also an understanding between security agencies and police of two or more different countries who come together to curb global terrorism. Hence, it is now possible to catch the perpetrators of crime irrespective of which country they choose to hide in.
After reading the above-mentioned advantages of globalization, one can safely conclude that it definitely has brought the world a lot closer in terms of economic cooperation and trade. However, there is an urgent need to address all those concerns which can make globalization a tool for developed countries to gain an upper hand over developing countries.
The world leaders need to give every country, irrespective of its economic and military status its due right in the comity of nations. People in developed countries who have lost their livelihood because of outsourcing, and people in developing countries who face poor working conditions and abysmal compensation, are a harsh reality of globalization. Corporations who have made hefty profits at the cost of these two marginalized groups of people need to find a way out so that globalization becomes a phenomenon that encompasses every life and not a tyranny that masquerades itself as a revolution.