IMPACT OF GLOBALIZATION

PROF. DR. BHAGYASHREE DUDHADE

Principal,
Swami Vivekanand College of Education, Wakad, Pune.
E-mail add. – chirayu_dudhade@yahoo.com
Cell No. 9881792233, 9011737008

ABSTRACT
Globalization is the opening of local and nationalistic perspectives to a broader outlook of an
interconnected and inter-dependent world with free transfer of capital, goods, and services across
national frontiers. This paper will discuss about the concept of Globalization, how and why
Globalization matters and the areas of Globalization – Economic Globalization, Cultural
Globalization and Political Globalization. It elaborately emphasizes about the impact of
Globalization on the entire world. Finally the paper discusses about the benefits and risks of
Globalization, the positive and negative effects of Globalization.
Keywords: Cultural globalization, Economic globalization, Political globalization

INTRODUCTION
Globalization is a process of interaction and integration among the people, companies, and
governments of different nations, a process driven by international trade and investment, capital
flow, labor mitigation and aided by information technology. This process has effects on
the environment, on culture, on political systems, on economic development and prosperity, and
on human physical well-being in societies around the world.
A defining feature of globalization, is an international industrial and financial business structure.
Technology has been the other principal driver of globalization. Advances in information
technology, in particular, have dramatically transformed economic life. Information technologies
have given all sorts of individual economic actors—consumers, investors, businesses—valuable
new tools for identifying and pursuing economic opportunities, including faster and more
informed analyses of economic trends around the world, easy transfers of assets, and
collaboration with far-flung partners.
Globalization can also be defined as an ongoing process by which regional economies, societies
and cultures have become integrated through a globe-spanning network of communication and
trade. The process of globalization includes a number of factors which are rapid technology
developments that make global communications possible, political developments such as the fall
of communism, and transportation developments that make traveling faster and more frequent.
These produce greater development opportunities for companies with the opening up of
additional markets, allow greater customer harmonization as a result of the increase in shared
cultural values, and provide a superior competitive position with lower operating costs in other
countries and access to new raw materials, resources, and investment opportunities.
Globalization in short, points to the whole effort towards making the world global community as
a one village. Goods that were only found in western countries can now be found across the
globe. Now under developed areas can enjoy the benefits of scientific advances and industrial
progress available in developed countries for the improvement and growth of their areas.
Because of globalization the economies of the world are being increasingly integrated.
Example of Globalization
This morning you woke up and put on a polo shirt that read 'made in China' on the inside tag.
You then went to your garage and got in a car that had parts that were manufactured in all parts
of the world. You drove that car to the grocery store where you bought grapes that were grown in
Chile, sugar from Jamaica, and curry from India. You did all of this because of globalization.

HOW IT WORKS (EXAMPLE)?

Globalization results from the removal of barriers between national economies to encourage the
flow of goods, services, capital, and labor. While the lowering or removal of tariffs and quotas
that restrict free and open trade among nations has helped globalize the world economy,
transportation and communication technologies have had the strongest impact on accelerating the
pace of globalization.
Thomas L. Friedman describes the "flattening" of the world economy through globalized trade,
outsourcing, supply-chaining and political liberalization. The use of technologies allows
businesses, such as large multi-national corporations, to maintain customers, suppliers and even
competitors on a world-wide basis. The breakdown of businesses into components along its
value-chain creates opportunities for multiple businesses located at various spots on the globe to
participate in the production of a single good or service. This global network, even for a single
enterprise, is part of globalization.
Several organizations have either been created or have evolved into key roles in the process of
globalization. The World Bank and the International Monetary Fund, for instance, deal primarily
with issues of free trade in developing economies and with international monetary policy,
including debt and trade balances between developing and industrialized countries. The World
Trade Organization, along with the General Agreement on Trade and Tariffs (GATT), has been
involved with removing trade barriers and reducing the cost of trading.

WHY IT MATTERS?
Increasingly, businesses must recognize that their success depends on efficiency and scalability –
being able to quickly mobilize global resources and reach
world markets. Globalization is the key to growing
businesses in the 21st Century.
At the same time, globalization has led economic decision-
making away from local control. As a result, decisions
about a company's plans, including expansions, relocations, or closings are increasingly made
independently of the considerations of local markets or local managers.

MAJOR AREAS OF GLOBALIZATION:

Academic literature commonly subdivides globalization into three major areas: economic
globalization, cultural globalization, and political globalization.

Economic globalization
Economic globalization is the increasing economic interdependence of national economies
across the world through a rapid increase in cross-border movement of goods, services,
technology, and capital. Whereas the globalization of business is centered around the diminution
of international trade regulations as well as tariffs, taxes, and other impediments that suppresses
global trade. Economic globalization is the process of increasing economic integration between
countries, leading to the emergence of a global marketplace or a single world market. Economic
globalization comprises: Globalization of production; which refers to the obtention of goods and
services from a particular source from different locations around the globe to benefit from
difference in cost and quality. Likewise, it also comprises globalization of markets; which is
defined as the union of different and separate markets into a massive global marketplace.
Economic globalization also includes competition, technology, and corporations and industries.
Current globalization trends can be largely accounted for by developed economies integrating
with less developed economies by means of foreign direct investment, the reduction of trade
barriers as well as other economic reforms, and, in many cases, immigration.
International standards have made trade in goods and services more efficient.
Trade facilitation looks at how procedures and controls governing the movement of goods across
national borders can be improved to reduce associated cost burdens and maximize efficiency
while safeguarding legitimate regulatory objectives.

Cultural globalization
Cultural globalization refers to the transmission of ideas, meanings, and values and styles,
languages, around the world in such a way as to extend and intensify social relations. This
process is marked by the common consumption of cultures that have been diffused by the
Internet, popular culture media, and international travel. This has added to processes of
commodity exchange and colonization which have a longer history of carrying cultural meaning
around the globe. The circulation of cultures enables individuals to partake in extended social
relations that cross national and regional borders. The creation and expansion of such social
relations is not merely observed on a material level. Cultural globalization involves the formation
of shared norms and knowledge with which people associate their individual and collective
cultural identities. It brings increasing interconnectedness among different populations and
cultures.
Cultural globalization has increased cross-cultural contacts, but may be accompanied by a
decrease in the uniqueness of once-isolated communities. For example, Globalization has
expanded recreational opportunities by spreading pop culture, particularly via the Internet and
satellite television. Religions were among the earliest cultural elements to globalize, being spread
by force, migration, evangelists, imperialists, and traders. Christianity, Islam, Buddhism, and
more recently sects such as Mormonism are among those religions which have taken root and
influenced endemic cultures in places far from their origins.

Political globalization
In general, globalization may ultimately reduce the importance of nation
states. Supranational institutions such as the European Union, the WTO, the G8 or
the International Criminal Court replace or extend national functions to facilitate international
agreement.
Inter govern-mentalism is a term in political science with two meanings. The first refers to a
theory of regional integration originally proposed by Stanley Hoffmann; the second treats states
and the national government as the primary factors for integration. Multi-level governance is an
approach in political science and public administration theory that originated from studies
on European integration. Multi-level governance gives expression to the idea that there are many
interacting authority structures at work in the emergent global political economy. It illuminates
the intimate entanglement between the domestic and international levels of authority.
Some people are citizens of multiple nation-states. Multiple citizenship, also called dual
citizenship or multiple nationality or dual nationality, is a person's citizenship status, in which a
person is concurrently regarded as a citizen of more than one state under the laws of those states.
Increasingly, non-governmental organizations influence public policy across national boundaries,
including humanitarian aid and developmental efforts.
As a response to globalization, some countries have embraced isolationist policies. For example,
the North Korean government makes it very difficult for foreigners to enter the country and
strictly monitors their activities when they do. Aid workers are subject to considerable scrutiny
and excluded from places and regions the government does not wish them to enter. Citizens
cannot freely leave the country.

Other dimensions
Scholars also occasionally discuss other, less common dimensions of globalization, such
as environmental globalization (the internationally coordinated practices and regulations, often
in the form of international treaties, regarding environmental protection) or military
globalization (growth in global extent and scope of security relationships). Those dimensions,
however, receive much less attention the three described above.

GLOBALIZATION AND ITS IMPACT

“It has been said that arguing against globalization is like arguing against the laws of gravity”
– Kofi Annan, Former Secretary General of the United Nations

Globalization is playing an increasingly important role in the developing countries. It can be seen
that, globalization has certain advantages such as economic processes, technological
developments, political influences, health systems, social and natural environment factors. It has
a lot of benefit on our daily life. Globalization has created a new opportunities for developing
countries. Such as, technology transfer hold out promise, greater opportunities to access
developed countries markets, growth and improved productivity and living standards. However,
it is not true that all effects of this phenomenon are positive. Because, globalization has also
brought up new challenges such as, environmental deteriorations, instability in commercial and
financial markets, increase inequity across and within nations. Globalization has impacted nearly
every aspect of modern life.

Some of the benefits of globalization include:

 Foreign Direct Investment. Foreign direct investment (“FDI”) tends to increase at a much
greater rate than the growths in world trade, helping boost technology transfer, industrial
restructuring, and the growth of global companies.
 Technological Innovation. Increased competition from globalization helps stimulate new
technology development, particularly with the growth in FDI, which helps improve economic
output by making processes more efficient.
 Economies of Scale. Globalization enables large companies to realize economies of scale
that reduce costs and prices, which in turn supports further economic growth, although this
can hurt many small businesses attempting to compete domestically.
 Increased Standard of Living
Economic globalization gives governments of developing nations access to foreign lending.
When these funds are used on infrastructure including roads, health care, education, and
social services, the standard of living in the country increases. If the money is used only
selectively, however, not all citizens will participate in the benefits.
 Access to New Markets
Globalization leads to freer trade between countries. This is one of its largest benefits to
developing nations. Homegrown industries see trade barriers fall and have access to a much
wider international market. The growth this generates allows companies to develop new
technologies and produce new products and services.

Some of the risks of globalization include:

 Interdependence. Globalization leads to interdependence between nations, which could
cause regional or global instabilities, if local economic fluctuations end up impacting a large
number of countries relying on them.
 National Sovereignty. Some see the rise of nation states, multinational or global firms and
other international organizations as a threat to sovereignty. Ultimately, this could cause some
leaders to become nationalistic or xenophobic.
 Equity Distribution. The benefits of globalization can be unfairly skewed towards rich
nations or individuals, creating greater inequalities and leading to potential conflicts both
nationally and internationally as a result.
 Widening Disparity in Incomes
While an influx of foreign companies and foreign capital creates a reduction in overall
unemployment and poverty, it can also increase the wage gap between those who are
educated and those who are not. Over the longer term, education levels will rise as the
financial health of developing countries rise, but in the short term, some of the poor will
become poorer. Not everyone will participate in an elevation of living standards.
 Decreased Employment
The influx of foreign companies into developing countries increases employment in many
sectors, especially for skilled workers. However, improvements in technology come with the
new businesses and that technology spreads to domestic companies. Automation in the
manufacturing and agricultural sectors lessens the need for unskilled labor and
unemployment rises in those sectors. If there is no infrastructure to help the unemployed train
for the globalized economy, social services in the country may become strained trying to care
for the new underclass.

Other Perspective of Impact of Globalization…

Financial and industrial globalization is increasing substantially and is creating new
opportunities for both industrialized and developing countries. The largest impact has been on
developing countries, which now are able to attract foreign investors and foreign capital. This
has led to both positive and negative effects for those countries in the following proportions;
1- Economic and Trade Processes Field
2- Education and Health Systems
3- Culture Effects
 1- Economic and Trade Processes Field
Globalization helps developing countries to deal with rest of the world increase their
economic growth, solving the poverty problems in their country. In the past, developing
countries were not able to tap on the world economy due to trade barriers. They cannot share
the same economic growth that developed countries had. However, with globalization the
World Bank and International Management encourage developing countries to go through
market reforms and radical changes through large loans. Many developing nations began to
take steps to open their markets by removing tariffs and free up their economies. The
developed countries were able to invest in the developing nations, creating job opportunities
for the poor people. For example, rapid growth in India and China has caused world poverty
to decrease (blogspot.com.2009). It is clear to see that globalization has made the
relationships between developed countries and developing nations stronger, it made each
country depend on another country. According to Thirlwall (2003:13) " Developing countries
depend on developed countries for resource flows and technology, but developed countries
depend heavily on developing countries for raw materials, food and oil, and as markets for
industrial goods". One of the most important advantages of globalization is goods and people
are transported easier and faster as a result free trade between countries has increased, and it
decreased the possibility of war between countries. Furthermore, the growth in the
communication between the individuals and companies in the world helped to raise free trade
between countries and this led to growth economy. The counter part of Globalization is many
developing countries do benefit from globalization but then again, many of such nations do
lag behind." In the past two decades, China and India have grown faster than the already rich
nations. However, countries like Africa still have the highest poverty rates, in fact, the rural
areas of China which do not tap on global markets also suffer greatly from such high poverty
(blogspot.com.2009). On the other hand, developed countries set up their companies and
industries to the developing nations to take advantages of low wages and this causing
pollution in countries with poor regulation of pollution. Furthermore, setting up companies
and factories in the developing nations by developed countries affect badly to the economy of
the developed countries and increase unemployment.
 2- Education and Health Systems
Globalization contributed to develop the health and education systems in the developing
countries. We can clearly see that education has increased in recent years, because
globalization has a catalyst to the jobs that require higher skills set. This demand allowed
people to gain higher education. Health and education are basic objectives to improve any
nations, and there are strong relationships between economic growth and health and
education systems. Through growth in economic, living standards and life expectancy for the
developing nations certainly get better. With more fortunes poor nations are able to supply
good health care services and sanitation to their people. In addition, the government of
developing countries can provide more money for health and education to the poor, which
 led to decrease the rates of illiteracy. This is seen in many developing countries whose
illiteracy rate fell down recently. It is truth that, living standards and life expectancy of
developing countries increase through economic gains from globalization. According to the
World Bank (2004) " With globalization, more than 85 percent of the world's population can
expect to live for at least sixty years and this is actually twice as long as the average life
expectancy 100 years ago". In addition, globalization helped doctors and scientists to
contribute to discover many diseases, which spread by human, animals and birds, and it
helped them to create appropriate medicines to fight these deadly diseases like, HIV/ADIS,
swine flu and birds' flu However, globalization could have negative impacts also in these
fields; globalization facilitates the spread of new diseases in developing nations by travelers
between countries. Due to increased trade and travel, many diseases like HIV/ADIS, Swine
Flu, Bird Flu and many plant diseases, are facilitated across borders, from developed nations
to the developing ones. This influences badly to the living standards and life expectancy
these countries. According to the World Bank (2004) "The AIDS crisis has reduced life
expectancy in some parts of Africa to less than 33 years and delay in addressing the problems
caused by economic". Another drawback of globalization is, globalized competition has
forced many skilled workers and highly educated and qualified professionals, such as
scientists, doctors, engineers and IT specialists, migrate to developed countries to benefit
from the higher wages and greater lifestyle prospects for themselves and their children.
 3- Culture Effects
Globalization has many benefits and detriment to the culture in the developing countries.
Many developing countries cultures has been changed through globalization, and became
imitate others cultures such as, America and European countries. Before globalization it
would not have been possible to know about other countries and their cultures. Due to
important tools of globalization like television, radio, satellite and internet, it is possible
today to know what is happening in any countries such as, America, Japan and Australia.
Moreover, people worldwide can know each other better through globalization. For example,
it is easy to see more and more Hollywood stars shows the cultures different from America.
In addition, today we can see clearly a heavily effect that caused by globalization to the
young people in the different poor nations, it is very common to see teenagers wearing Nike
T-Shirts and Adidas footwear, playing Hip-Hop music, using Apple ipad and iphone and
eating at MacDonald, KFC and Domino's Pizza . It now look like you can only distinguish
them by their language. One the other hand, many developing countries are concerned about
the rise of globalization because it might lead to destroy their own culture, traditional,
identity, customs and their language. Many Arab countries such as Iraq, Syria, Lebanon and
Jordan, as developing countries have affected negatively in their cultures, customs and
traditional which have been changed drastically. Furthermore, globalization leads to
disappearing of many words and expressions from local language because many people use
English and French words. In addition, great changes have taken place in the family life,
young people trying to leave their families and live alone when they get 18 years old, and the
extended family tends to become smaller than before (Kurdishglobe, 2010).

CONCLUSION
In conclusion, as we can see, the process of globalization has involved all the countries around
the world. Developing countries and developing countries, have been affected by globalization,
and whether negatively or positively, the economies of these countries have improved under the
influence of globalization. The size of direct foreign investment has increased and a lot of bad
habits and traditions erased, but also globalization has brought many drawbacks to these
countries as well. Many customs and cultures are disappeared such as traditions clothes and
some language and expressions have changed. In addition, the violence and drugs abuse are
increased and a lot of deadly diseases have spread under the influence of globalization. However,
although globalization has many disadvantages, we believe that globalization has brought the
developing countries many more benefits than the detriments. For example, we can see there is
more and a biggest opportunity for people in both developed countries and developing countries
to sell as many goods to as many people as right now, so we can say this is the golden age for
business, commerce and trade.

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