Types of globalization: Economic, political, cultural

There are three types of globalization.

1. Economic globalization. Here, the focus is on the integration of international

financial markets and the coordination of financial exchange. Free trade agreements,
such 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.
2. 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.
3. Cultural globalization. This aspect of globalization focuses in a 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.

These three types influence one another. For example, liberalized national trade policies drive
economic globalization. Political policies also affect cultural globalization, enabling people to
communicate and move around the globe more freely. Economic globalization also affects
cultural globalization through the import of goods and services that expose people to other
cultures.

Effects of globalization
The effects of globalization can be felt locally and globally, touching the lives of individuals as
well as the broader society in the following ways:

 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.

While the effects of globalization can be observed, analyzing the net impact is more complex.
Proponents often see specific results as positive and critics of globalization view the same results
as negative. A relationship that benefits one entity may damage another, and whether
globalization benefits the world at large remains a point of contention.

Examples of globalization
Multinational corporations are a tangible example of globalization. Some examples include the
following:
  McDonald's had 39,198 fast-food restaurants in 119 countries and territories,
according to its Securities and Exchange Commission filing at the end of 2020. It
employed more than 2.2 million people at that time, the filing said.
 Ford Motor Company reported in 2021 that it works with about 1,200 tier
1 suppliers around the globe.
 Amazon's recent expansion has it using tens of thousands of suppliers and employing
more than nearly 1.3 million full- and part-time employees.

Through their influence on social and economic development in the countries that host them,
multinational corporations embody the contradictions of globalization. They bring jobs, skills
and wealth to the region they are investing or doing business in. But they also can destroy local
businesses, exploit cheap labor and threaten indigenous cultures. The benefits they offer are
often unsustainable because the loyalty of multinationals is to their investors and bottom lines
and not to the local people, economies and cultures where they are doing business.

Another example of globalization is the response to the COVID-19 pandemic. Because the world
was able to communicate across boundaries, nations were able to work together to quickly
produce vaccines for the virus. In addition, doctors traveled where they were needed. For
example, Cuba sent doctors to Italy at the beginning of the pandemic to assist with the crisis as it
developed there.

However, countries also enacted strict travel restrictions and many closed their borders to cut
down on the free movement of people and spread of the virus.

Benefits of globalization
Globalization enables countries to access less expensive natural resources and lower cost labor.
As a result, they can produce lower cost goods that can be sold globally. Proponents of
globalization argue that it improves the state of the world in many ways, such as the following:

 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
contribute to international cooperation and peace.
Negative consequences of globalization
Many proponents view globalization as way to solve systemic economic problems. But critics
see it as increasing global inequality. Among the critiques of globalization are the following
issues:
  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
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.