GLOBALISATION

Globalization (or globalisation) describes a process by which regional

economies, societies, and cultures have become integrated through a globe-
spanning network of communication and trade. The term is sometimes used to refer
specifically to economic globalization: the integration of national economies into the
international economy through trade, foreign direct investment, capital flows,
migration, and the spread of technology. However, globalization is usually
recognized as being driven by a combination of economic, technological,
sociocultural, political, and biological factors. The term can also refer to the
transnational circulation of ideas, languages, or popular culture through
acculturation.

The positive aspect of globalization

Globalization has a positive side as well. Supporters of globalization argue that it is good and
beneficial. Some of their arguments are listed below.
• Globalization has created the concept of outsourcing. Work such as software
development, customer support, marketing, accounting and insurance is outsourced to
developing countries like India. So the company that outsourced the work enjoys the
benefit of lower costs because the wages in developing countries is far lower than that of
developed countries. The workers in the developing countries get employment.
Developing countries get access to the latest technology.
• Increased competition forces companies to lower prices. This benefits the end consumers.
• Increased media coverage draws the attention of the world to human right violations. This
leads to improvement in human rights.

Positive Effects of Globalization

It would be rather difficult to discuss the extent of the positives that globalization
has had on the world at large. But still, here are some of the positive effects of
globalization and the positive impacts they have had on so many demographic
segments of society.

Increased Competition
One of the most visible positive effects of globalization is the improved quality of
products due to global competition. Customer service and the 'customer is the king'
approaches to production have led to improved quality of products and services. As
the domestic companies have to fight out foreign competition, they are compelled
to raise their standards and customer satisfaction levels in order to survive in the
market. Besides, when a global brand enters a new country, it comes in riding on
some goodwill, which it has to live up to. This creates competition in the market and
a 'survival of the fittest' situation.
Employment
With globalization, companies have forayed into the developing countries and
hence generated employment for them. But it is one of the positive and negative
effects of globalization, depending on the point of view you wish to see it from. It
has given an opportunity to invest in the emerging markets and tap up the talent
which is available there. In developing countries, there is often a lack of capital
which hinders the growth of domestic companies and hence, employment. In such
cases, due to global nature of the businesses, people of developing countries too
can obtain gainful employment opportunities. But the developed countries have lost
jobs on account of this movement of jobs to the developing world and hence it is a
pinch felt by people in the First World.

Investment and Capital Flows

One of the most visible positive effects of globalization in India is the flow of foreign
capital. A lot of companies have directly invested in India, by starting production
units in India, but what we also need to see is the amount of FII that flows into the
developing countries. Indian companies which have been performing well, both in
India and off the shores, will attract a lot of foreign investment, and thus pushes up
the reserve of foreign exchange available in India. This is also one of the positive
effects of globalization in US and other developed countries as developing countries
give them a good investment proposition.

Foreign Trade
While discussing the positive effects of globalization, how can I leave out the impact
of foreign trade on an economy. Comparative advantage has always been a factor
even in the old times. While trade originated in the times of early kingdoms, it has
been institutionalized due to globalization. Previously, people had to resort to unfair
means and destruction of kingdoms and countries to get what they wanted. Today,
it is done in a more humane way, with mutual cooperation. People who operate in
uncivilized ways, now have to face the WTO and other world organizations that have
been established with a view to control and regulate the trade activities of the
countries.

Spread of Technical Know-How

While it is generally assumed that all the innovations happen in the Western world,
due to globalization, the know-how also comes into developing countries due to
globalization. Without globalization, the knowledge of new inventions, medicines
would remain cooped up in the countries that came up with them and no one else
would benefit. But due to improved political ties, there is a flow of information both
ways. And this point - the spread of know-how, can also be expanded to include
economic and political knowledge, which too has spread far and wide. The most
obvious example of the spread of knowledge is that the Western world today are
waking up to the benefits of Ayurveda and Yoga, while the Western antibiotics and
flooding the Indian markets improving the quality of life (and the longevity too) of
people in India.

Spread of Culture
The positive effects of globalization on culture are many! Not all good practices
were born in one civilization. The world that we live in today is a result of several
cultures coming together. People of one culture, if receptive, tend to see the flaws
in their culture and pick up the culture which is more correct or in tune with the
times. Societies have become larger as they have welcomed people of other
civilizations and backgrounds and created a whole new culture of their own.
Cooking styles, languages and customs have spread all due to globalization. The
same can be said about movies, musical styles and other art forms. They too have
moved from one country to another, leaving an impression on a culture which has
adopted them.

Spread of Education
One of the most powerful positive effects of globalization on women and men both
is the spread of education. Today, you can move in the search of the best
educational facilities in the world, without any hindrance. A person living in US can
even go to another continent for a new experience and some courses which one
may not find in the home country. If one is interested, one can even get a
specialization in subjects indigenous to a country and spread that knowledge to the
home country. A good example of that is how the American managers went to Japan
to learn the best practices in the field of mass production and incorporated that
knowledge in their own production units.

Legal and Ethical Effects

Gone are the days where the limited jurisdiction became a hindrance in the
prosecution of criminals. These days due to international courts of justice, these
criminals can no longer seek asylum in a foreign country, but will be brought
forward and there will be justice. Due to globalization, there is also an
understanding between the security agencies and the police of two or more
different countries who will come together to curb global terrorism. Hence, it is now
possible to catch the perpetrators of crime irrespective of which country they
choose to hide in. This is undoubtedly one of the greatest positive effects of
globalization on society.

Organizations for Environmental and Social Concerns

In cognizance of the damage that has been caused to our world over the years, the
individual nations have decided to come together to find a way to save our world
from ourselves. Organizations monitoring climate change as well as those which
look at the welfare of our animals and marine life, are undoubtedly one of the
positive effects of globalization on the environment.
The negative effects of globalization

Opponents of globalization point out to its negative effects. Some of them are listed below.
• Developed nations have outsourced manufacturing and white collar jobs. That means less
jobs for their people. This has happened because manufacturing work is outsourced to
developing nations like China where the cost of manufacturing goods and wages are
lower. Programmers, editors, scientists and accountants have lost their jobs due to
outsourcing to cheaper locations like India.
• Globalization has led to exploitation of labor. Prisoners and child workers are used to
work in inhumane conditions. Safety standards are ignored to produce cheap goods.
• Job insecurity. Earlier people had stable, permanent jobs. Now people live in constant
dread of losing their jobs to competition. Increased job competition has led to reduction
in wages and consequently lower standards of living.
• Terrorists have access to sophisticated weapons enhancing their ability to inflict damage.
Terrorists use the Internet for communicating among themselves.
• Companies have set up industries causing pollution in countries with poor regulation of
pollution.
• Fast food chains like McDonalds and KFC are spreading in the developing world. People
are consuming more junk food from these joints which has an adverse impact on their
health.
• The benefits of globalization is not universal. The rich are getting richer and the poor are
becoming poorer.
• Bad apects of foreign cultures are affecting the local cultures through TV and the
Internet.
• Enemy nations can spread propaganda through the Internet.
• Deadly diseases like HIV/AIDS are being spread by travellers to the remotest corners of
the globe.
• Local industries are being taken over by foreign multinationals.
• The increase in prices has reduced the governments ability to sustain social welfare
schemes in developed countries.
• There is increase in human trafficking.
• Multinatonal Companies and corporations which were previously restricted to
commercial activities are increasingly influencing political decisions.