Economic Effects of Globalisation: A Comprehensive Analysis

This essay delves into the multifaceted impact of globalisation, analyzing its effects on various aspects of the global economy and society. It begins by defining globalisation and highlighting its historical context, emphasizing the role of technology and infrastructure in facilitating international connectivity. The essay explores the positive impacts, including the emergence of a global market, cross-cultural management, increased foreign trade and investment, and economic development. It also acknowledges the negative consequences, such as job insecurity and price fluctuations. Through an examination of these diverse effects, the essay offers a comprehensive overview of the complex and often contradictory nature of globalisation, providing insights into its influence on businesses, economies, and societies worldwide. The analysis includes examples from the UK and other countries, and incorporates statistical data and figures to support the arguments made.

Study and Research Skills

Table of Contents
INTRODUCTION...........................................................................................................................1
CONCLUSIONS..............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Topic: Discussing: The impact of globalisation- positive or negative.
Globalisation is the process by which businesses or other organisations develop
international influence or start operating on an international scale. This is the economic
process which involve the trade and commerce of goods and services and economic resources
like capital, technology and data |(Black, Calitz and Steenkamp, 2015). Globalisation is well
defined as providing organisations and companies an international platform so that they can
come together from different parts of the world and trade with their available products and
services. In this process of globalisation all the advance means of transport are used like
steam locomotives, jet engines and container ships etc., helped in a lot many ways. And the
advance means of infrastructure like internet, telecommunication are all increasing effects of
globalisation. This is not the new or modern term to be introduce but the history of
globalisation is from European age discovery from 3rd millennium BC. It grew in the 1820s
on very large scale and then after the increasing use of technology and innovation in 19th and
20th century impacted globalisation on larger scale.
Connectivity:
In the business environment globalisation is the strong and growing connectivity of
international market and managing businesses. The foreign investment made by foreign
countries to expand their market in those countries are also termed as globalisation. This
increasing globalisation is mainly due to advancement in technology, communication,
transportation and educational level and the trading of economic resources like capital and
human resources (Zajda, 2015). The goods which are found in UK are now being easily
available in US or Australia and this is the magic of globalisation. In the process of
globalisation there is not only the transfer and trading of goods or services but also of culture,
food, behaviours and societies as well.
Currency:
In globalisation the exchange of currency is the main elements which is taking place
thus American dollar is the strongest currency which is used throughout the world. Now all
the people can access the card of any bank of world to make purchase or extract cash in
almost every country in the globe like Visa, MasterCard and American Express.
Globalisation is creating greater opportunities for all multinational firms in less industrialised
nations to go into new and diversified markets in world (Block, 2016). Therefore, all the
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business in more developed nations like UK and USA are having more access to capital flow,
technology, human capital, cheaper imports and larger export markets.
Trading restriction:
With the introduction of globalisation and reduction trade restriction all the peoples of
the world can freely move to any part of world without much legal formalities. All these are
the positive impact which globalisation is laying on world and the economies of world.
Travel and tourism has also been introduced by globalisation and now people moving from
one part of the world to the other is most common impact. Some of more positive effects of
globalisation are:
Global market
This is most important part of globalisation and world is emerging as one global
market or global village (Thorpe and Figge, 2017). In the process of globalisation
privatisation is also playing an important role as most of the global multinational companies
of the world are private sector enterprise. The global demand and increasing population of
world is leading to expand and grow the companies in a wider scope throughout the world.
All the leading brands of world despite of their original countries can be found in every part
of the world now. Whether McDonald's, KFC, Whirlpool, Volkswagen or any other company
or any sector or industry or any country can sale and trade its products in any other country as
well.
Cross cultural management
In globalisation not only goods and services are traded but there are exchange and
trading of cultures of the world as well. Many big and developed country like USA, UK,
Japan are the best example of cross cultural management as they have witnessing a heavy
levels of immigration (Weber, Luzzi and Ramirez, 2015). The big multinational companies
are also the part of introducing the cultures of their home country to their host country. The
small and under developed nations and now getting influenced by the culture of developed
nations and trying to adopt that culture all because of globalisation. The cultural barriers
between the countries are gradually decreasing and all countries are moving towards
globalisation. This is also leading to new cultural products like art, entertainment and
education. Cross culture refers to process of communicating many values, ideas, cultures and
artistic expressions. Now the people of one nation can easily understand the values and
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beliefs of other country and the orthodox or stereotyping and misconceptions are also
decreasing now.
Foreign trade
The increase of foreign trade are also the positive impact of globalisation. All the
goods and services which once was only available in one country and now they are available
is all the parts of the world. Economies of the world are doing foreign trade and this is giving
them so much in return in the terms of foreign exchange investments. Globalisation also is a
good and only source of foreign currency in all the countries. The goods and services which
are imported or exported to other parts of world and countries are getting comparative
advantages (Sifianou, 2013). Globalisation is also increasing the use of free trading
opportunities between the nations and allowing the big nations to invest in the small and
emerging nations. All the nations at the times of crises or natural disaster can access to
international aid and financial assistance by UN or World bank. This is also leading to world
peace and fewer chances of world war, invasion of one country on the other risk are reducing.
There are many international organisations like WTO, UN, World Bank, IMF, ASEAN etc.,
are committed to spread values like that of freedom and helping the other countries of world.
The foreign trade of UK in the September ending of 2017 was accounted total import was
$4.2 million and export was about $5.5 million. This is increasing since 1987 and the gross
final expenditure of import are very high.
Foreign investments
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Illustration 1: Foreign investment by countries
All the foreign trade will lead to direct or indirect foreign investment in that country
where the goods have been traded. This flow of foreign investment is the most visible and
positive effect of globalisation in all the nations of the worlds (Nehra and Singh, 2017).
Foreign investment is mainly of two types: direct and indirect. Direct foreign investment are
done by starting the production units in some country and indirect foreign investment is done
by only investing in that country whether by purchasing the well established firm or business
of country. There are many stakeholders who are given the freedom to invest in those
companies in different ways. But the multinational firms are more complex than the national
firms as they are operating on the international level and dealing with larger part of investors,
suppliers, customers and governmental bodies of world. UK is at present second largest
recipient of FDI in world which accounted $253 billion in the year 2016. The GDP of UK in
that year was about $2.6 trillion in the same year. Brexit has also not affected this FDI as the
UK's economy is still growing at the same speed and London is financial capital of Europe.
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Competition
This is the most common phenomenon used in context of globalisation of the
economies or that of companies in various parts of world. The increase in competition will
lead to increase in global demand of goods and services and this is positive as well as
negative effect on globalisation (Syam and Ng, 2016). With the increasing competition in
world among all the nations and companies in providing better and good quality of product to
customer. The main motive of the companies all over the world is to provide the best
customer service and to satisfy the customers so that they become loyal customers. But
increasing competition is also leading to increase multinational corporation in on country and
by this many local and regional companies are suffering. As the profit margin of those local
or national companies are decreasing because of these multinational corporations.
Economic development
With the help of globalisation there are economic development in that country. As
infrastructure, telecommunication, technology and transportation are increasing and
improving. With the improvement in these services economic development is also happening
and under developed nations are heading towards developing one and developing are heading
towards developed ones (Mihajlović and Krželj–Čolović, 2014). The under developed
countries like that of Africa and Asia are now growing faster because of the introduction of
technology and multinational corporations in those countries. Soon these under developed
and developing nations will be giving challenges to the big countries of world. Globalisation
is also providing the products and services at the cheaper price with more optimised supply
and demand chain. All the producer and retailers are now diversifying their market and
contributing to economic growth and making better availability of good and services. GDP
growth of UK in third quarter of 2017 has grown to 0.4% and the annual change is about
2.3%. In the year 2016 Britain was the faster growing economy of world but in 2017 it fell
down.
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Illustration 2: GDP growth of UK
Communication
This is also one of the positive impact of globalisation in today's scenario and this is
enabling the countries to share information about various issues. And because of this the
speed of transportation is also increasing. The use of technology in the field of
communication is not new and also enabling many companies to do their business on the
global level with ease.
Thus, there are many and end less positive impact of globalisation on world and on
economies of world like education, trade, technology and source of investments (Soper and
Emmelin, 2016). But there are also some of the negative effect of globalisation. Like
Job insecurity
This is considered as the most dangerous effect on the country and is the economic
effect. Major world population of the under developed and developing nations are moving in
developed countries. And because of this high level of immigration population in developed
nations are leading to job insecurity there (Gelbin and Gilman, 2016). The population of
developing nations are far more qualified and well skilled who are causing threat to the
peoples in developed countries. As the major number of doctors or engineers and scientist in
UK and USA are from developing nations like India who are threat to jobs in UK and USA.
The labour of the developing and under developed nations have been exploited at a very
higher level in those countries. All the safety and standards are ignored at those big
companies to produce cheap goods. As per the market are considered less costly in Asia and
China in the production level so many multinational corporation are moving their operations
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in those countries. The share of non UK resident is always high than the resident UK from the
year 2001 to 2016. As there are more number of no UK born employees in UK from the total
employment so the job insecurity is also high for them this is because of globalisation.
Fluctuation in price
Globalisation is also leading to price fluctuations of products and services in all the
countries of world. Because of the increased in competition in global market developed
nations are being forced to lower down their prices of products and decreasing the profit
margin (Oberlander, Disdier and Etilé, 2017). China being the best example as is producing
the same products like big multinational but at lower cost and exporting to many countries
and they are finding the Chinese products less costly. Fluctuation of price and lowering down
cost of production is reducing the ability to sustain social welfare in those countries. The
inflation rate and the fluctuation of price in UK in 2011 was the highest at 4.5% and in the
last year 2015 it was the lowest to 0.3% this is all because of globalisation.
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Illustration 3: Inflation rate of UK
CONCLUSIONS
From the above essay it has been concluded that globalisation is not a new
phenomenon in the world economy as its history was laid down in 17th century. But now it
has reached to its optimum level and is been used in almost all the economies of world.
Globalisation is brining the business and organisation to a global platform and making the
goods and services available to customer worldwide at the same price. There are majorly the
positive impact of globalisation as it has brought whole world as a single global village. The
use of technology, communication, education and transportation are now more developing
globalisation and no country of the world is now left isolated. The wide spread use of
internet, mobile and computers are making goods quicker and cheaper to the people around
the world. This is also brining global economies to know about each others culture and
political or social environment. People with similar ideology and belief are coming together
around the globe to make the world different and better world to live in. But the competition
among developing nations are reducing positive effects of globalisation and price are
fluctuating almost every day. This has affected UK as the whole economy most of the
employees working in UK are the non residents and resident citizen of UK are quite insecure
about their work.
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REFERENCES
Books and journals:
Black, P., Calitz, E. and Steenkamp, T., 2015. Public economics. OUP Catalogue.
Gelbin, C. and Gilman, S. eds., 2016. Jewish Culture in the Age of Globalisation.
Routledge.
Mihajlović, I. and Krželj–Čolović, Z., 2014. The Impact of Globalisation on the
Development of Tourism within Social and Economic Changes. European
Scientific Journal, ESJ, 10(10).
Nehra, S. S. and Singh, U., 2017. Impact of globalisation on social security: A case study
of army PBOR. Research Journal of Humanities and Social Sciences. 8(2), pp.172-
176.
Oberlander, L., Disdier, A. C. and Etilé, F., 2017. Globalisation and national trends in
nutrition and health: A grouped fixed‐effects approach to intercountry
heterogeneity. Health Economics. 26(9). pp.1146-1161.
Sabour, M.H., 2015. The impact of globalisation on the mission of the university. In
Second International Handbook on Globalisation, Education and Policy Research
(pp. 243-259). Springer Netherlands.
Sifianou, M., 2013. The impact of globalisation on politeness and impoliteness. Journal
of Pragmatics. 55. pp.86-102.
Syam, A. and Ng, A., 2016. Standards, safety and the emerging impacts of globalisation.
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Thorpe, A. and Figge, F., 2017, January. The interface of globalisation and Climate
Change: The impact on livelihoods. In Academy of Management Proceedings (Vol.
2017, No. 1, p. 10338). Academy of Management.
Weber, S., Luzzi, G.F. and Ramirez, J.V., 2015. Globalisation, Technological Change,
and Human Capital Depreciation. The Impact on Education Policy. Revue française
de pédagogie. (3). pp.11-22.
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Zajda, J., 2015. Globalisation and its impact on education and policy. In Second
International Handbook on Globalisation, Education and Policy Research (pp.
105-125). Springer Netherlands.
Block, D., 2016. The impact of globalisation, internationalisation and migration on the
use and vitality of Catalan in secondary school and higher education settings.
Language, Culture and Curriculum, 29(1), pp.107-116.
Soper, K. and Emmelin, M., 2016. Reconceptualising Prosperity: Some Reflections on the
Impact of Globalisation on Health and Welfare. Sustainability and the Political
Economy of Welfare, pp.44-58.
Online
Foreign investments in UK. 2016 [Online] Accessed through:
<https://www.google.co.uk/search?
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wipmeWs5vLXAhWHM48KHa_lAFIQ_AUICygC&biw=1223&bih=777#imgrc=lhn
QIdprbynyeM:>
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<https://ig.ft.com/sites/numbers/economies/uk>
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<https://www.theguardian.com/business/2017/oct/17/uk-inflation-at-five-year-high-of-
3-to-boost-state-pension>
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