Significance of Globalization - An Overview

Running Head: Economics
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International Business
Significance of Globalization
1/31/2020

Economics
1
Globalization is essential for the economic growth of the country. The economic growth
of the country enhances due to globalization as it helps the country to be successful. When the
economies are growing due to the cross border trade, enhancing in the technology, flowing of the
investment, etc. then the globalization has taken place. When the international, culture, political
activities and economies are expanded due to the connection from the different parts of the world
then integration and the movement of the goods are done easily. It can be said that globalization
is the interconnection of the different countries across the world which helps in communicating
and moving the goods easily so that business operations can be done effectively at the
international level (Cleveland and Bartsch, 2018).
Globalization has much significance in the economic world as it helps in increasing
international trade by starting the cross border trade of goods and services. There are many goods
that are available at the lower prices also due to globalization as the cost of production gets
reduced due to the adoption of the new technologies. The standard of living of the people has
enhanced and become more effective through globalization. it is bringing many changes for good
(Steger, 2017). The high quality of products is served in the market as the competition is high so
people majorly focus on improving the quality of the products. The efficiency in the economy
has enhanced and it also creates the environment for the flow of capital. The trade barriers have
been reduced which helps the countries in getting the free flow of technology and even they are
getting the free movement of labor among the countries.
With the increase in globalization, the education system has enhanced and many people
can go to the international countries for taking their best education (Spring, 2018). The
movement across the borders has become easy which also results in the integration of the
cultures. There are many investors who are investing in developing countries because of the free
trade which helps the companies to develop. The information can be easily flowed from one
place to another with the help of the technology so it helps in tying the people from different
countries (Indyk, et al., 2012). Transportation also gets eased through the new innovation of the
technologies. The cultural barriers have reduced as people from different cultures are moving to
another country so it helps the country to facilitate communication between the different nations
and cultures.

Economics
2
There is a certain strength of globalization to the economy and to the international
market. The economic growth rate of the country gets increased through globalization and it
helps in improving the resources of the country. The capital-output ratio of the country gets
reduced and it helps in increasing labor productivity. The efficiency in the production system
also get enhanced through the adoption of the new technologies and helps in eliminating the
barriers. The foreign capital can be easily attracted through the globalization as there are many
investors who want to invest in developing countries. The quality of the production also gets
enhanced due to updated foreign technology so there is much stronger which helps the
international countries to adopt globalization.
As there is much strength of globalization but there is much weakness also. Where
globalization helps the country to enhance, it also redistributes economic power. The countries
which have many powers and are already leading dominate the poor countries. The countries
with high wealth and power are more upgrading but the poor countries which have less
technology are still fighting for their economic power at the global level (Crossley and Watson,
2013). The imports are increasing due to globalization which is the major weakness as it deficits
the trade and causes many issues in the balance of the payments.
The main motive of globalization is to adopt the new technologies and to enhance
production but at the same time by adopting the new technologies the efficiency of the workers
in the country is reducing. Unemployment is increasing due to the adoption of the technology.
Even people are losing their jobs so it is affecting the economy badly. Globalization has brought
many MNCs in the country so it is creating a challenge for the smaller companies to compete
with large companies (Eggins, 2013). The existence of the smaller companies is reducing as
MNCs are taking place. Globalization is emerging more western cultures and due to this the
traditional culture, dresses, music, and dance is losing.
Barack Obama Nelson Mandela has given the speech in which he has told the success
story of globalization where he has praised globalization as it helps in making the market
structure better. There are many people who are living in poverty and the standard of living was
low but due to globalization one billion people have lifted and poverty has reduced. In China
also it has noticed that the economic growth of the country has enhanced through the adoption of