Globalization is a term that is used to refer to how people all over the world come together and integrate. Besides people, it may also mean how companies and governments also interact. There are a lot of factors that have necessitated globalization.
Causes of globalization
Technological advancement has been the major factor that has influenced globalization. This is because technology has made it more cost effective for people in different parts of the world to communicate without any additional transportation or communication costs.
Globalization has also been caused by improved transportation systems. The development of air travel has made it easier for people and goods to be transported around the world.
Another factor that has caused globalization is This is where people have adopted the practice of using steel containers to transport goods which has made trade easier.
The formation of global trading blocs has also led to the increase in globalization. Some of these organizations like WTO have reduced tariff and trade barriers between countries.
The rise of multinational enterprises around the world has also encouraged globalization. These companies have offices and trading centers across more than two countries.
The improved labour mobility has led to globalization. This involves the willingness and ability of people to travel to different countries to work.
Another factor that has led to the rise of globalization is the increased capital mobility. With the reduction in capital barriers, the flow of capital between countries has become easier.
Advanced financial systems have also made it easier for globalization to take place. This is due to financial institutions adopting a global model.
The rise and spread of global media has also led to globalization. This is where media stations have opened branches in different countries and hence improving integration.
The economies of scale that may firms gain from as a result of global trade has increased globalization. This is where firms benefit from specialization practices in different countries.
Effects of globalization
One positive effect of globalization is that is has led to the development of a global market. This has led to the rise of more multinationals since globalization leads to improved economies of scale and lowered costs.
Globalization also leads to cultural integration. This is where people from different countries and cultures come together and exchange cultures and new cultures are also created as a result.
Another effect of globalization is that it has led to increased global competition. With an increase in competition, more quality products and services are produced as a result.
Globalization has also led to the development of human rights. Due to the rise of global media, people have upheld human rights since any violation receives worldwide attention.
Globalization has also contributed to better international relations. With countries trading with each other, it becomes difficult for them to go to war since their economies are intertwined.
Globalization has caused some negative effects one being job insecurity. It is cheaper to outsource labour from underdeveloped or developing countries and hence people in developed countries suffer as a result.
Globalization has resulted into the increased level of production of products and services. This has led to the availability of more goods and services globally.
Globalization has also contributed to the depletion of natural resources. This is due to the increase in the level of production.
Globalization has also led to the reduction of poverty levels in the developing countries. This is due to the increase in job opportunities and living standards.
Another effect of globalization is the spread of western culture. This has led to the death of indigenous and local cultures.
Globalization has led to some major effects some being positive while others being negative. Despite the negative effects, it is important to acknowledge that without the modern globalization, economies would not be as developed as they are now and cultural and economical integration would not be possible.