Globalization

A Simple Globalization Definition

Globalization means the speedup of movements and exchanges (of human beings, goods, and services,
capital, technologies or cultural practices) all over the planet. One of the effects of globalization is that it
promotes and increases interactions between different regions and populations around the globe.

When Did Globalization Begin? The History of Globalization

For some people, this global phenomenon is inherent to human nature. Because of this, some say
globalization begun about 60,000 years ago, at the beginning of human history. Throughout time,
human societies’ exchanging trade has been growing. Since the old times, different civilizations have
developed commercial trade routes and experienced cultural exchanges. And as well, the migratory
phenomenon has also been contributing to these populational exchanges. Especially nowadays, since
traveling became quicker, more comfortable, and more affordable.

This phenomenon has continued throughout history, notably through military conquests and
exploration expeditions. But it wasn’t until technological advances in transportation and communication
that globalization speeded up. It was particularly after the second half of the 20th century that world
trades accelerated in such a dimension and speed that the term “globalization” started to be commonly
used.

What caused globalisation?

Globalisation is not a new phenomenon. The world economy has become increasingly interdependent
for a long time. However, in recent decades the process of globalisation has accelerated; this is due to a
variety of factors, but important ones include improved trade, increased labour and capital mobility and
improved technology.

Main reasons that have caused globalization

2. Containerisation. From 1970, there was a rapid adoption of the steel transport container. This
reduced the costs of inter-modal transport, making trade cheaper and more efficient.

3.Improved technology which makes it easier to communicate and share information around the world.
E.g. internet. For example, to work on improvements on this website, I will go to a global online
community, like elance.com. There, people from any country can bid for the right to provide a service. It
means that I can often find people to do a job relatively cheaply because labour costs are relatively
lower in the Indian sub-continent.

4.Growth of multinational companies with a global presence in many different economies.

5.Growth of global trading blocks which have reduced national barriers. (e.g. European Union, NAFTA,
ASEAN)

6.Reduced tariff barriers which encourage global trade. Often this has occurred through the support of
the WTO.

7.Firms exploiting gains from economies of scale to gain increased specialisation. This is an essential
feature of new trade theory.

8.Growth of global media.

Global trade cycle. Economic growth is global in nature. This means countries are increasingly
interconnected. (e.g. recession in one country affects global trade and invariably causes an economic
downturn in major trading partners.)

Financial system increasingly global in nature. When US banks suffered losses due to the sub-prime
mortgage crisis, it affected all major banks in other countries who had bought financial derivatives from
US banks and mortgage companies.

11. Improved mobility of capital. In the past few decades, there has been a general reduction in capital
barriers, making it easier for capital to flow between different economies. This has increased the ability
for firms to receive finance. It has also increased the global interconnectedness of global financial
markets.

12. Increased mobility of labour. People are more willing to move between different countries in search
for work. Global trade remittances now play a large role in transfers from developed countries to
developing countries.

13. *Internet. * this enables firms to communicate on a global level, this may overcome managerial
diseconomies of scale. The firm may be able to get cheaper supplies by dealing with a wider choice of
firms. Consumers are also able to order more goods online E.G. Dell Computers takes orders online and
can meet customer specifications.
Why Is Globalization Bad? The Negative Effects of Globalization

Globalization is a complex phenomenon. As such, it has a considerable influence on several areas of

The Negative Effects of Globalization on Cultural Loss

Apart from all the benefits globalization has had on allowing cultural exchanges it also homogenized the
world’s cultures. That’s why specific cultural characteristics from some countries are disappearing.
From languages to traditions or even specific industries. That’s why according to UNESCO, the mix
between the benefits of globalization and the protection of local culture’s uniqueness requires a careful
approach.

The Economic Negative Effects of Globalization

Despite its benefits, the economic growth driven by globalization has not been done without awakening
criticism. The consequences of globalization are far from homogeneous: income inequalities,
disproportional wealth and trades that benefit parties differently. In the end, one of the criticisms is that
some actors (countries, companies, individuals) benefit more from the phenomena of globalization,
while others are sometimes perceived as the “losers” of globalization. As a matter of fact, a recent
report from Oxfam says that 82% of the world’s generated wealth goes to 1% of the population.

The Negative Effects of Globalization on the Environment

Many critics have also pointed out that globalization has negative effects on the environment. Thus, the
massive development of transport that has been the basis of globalization is also responsible for serious
environmental problems such as greenhouse gas emissions, global warming or air pollution.

At the same time, global economic growth and industrial productivity are both the driving force and the
major consequences of globalization. They also have big environmental consequences as they
contribute to the depletion of natural resources, deforestation and the destruction of ecosystems and
loss of biodiversity. The worldwide distribution of goods is also creating a big garbage problem,
especially on what concerns plastic pollution.