What is globalization? Characteristics, causes, effects and examples

Category: Economics

Although the world is made up of large geographical, political and cultural divisions, today it is possible that two people can maintain real-time communication with each other; it is possible to get to the furthest end of the planet from one day to the next by taking a plane; Just as a product produced in Asia can be exported to America on a daily basis.

All these processes although they seem very common today, the truth is that a few years ago they were not so simple. But in the present they are, thanks to globalization process We have experienced in the last decades.

What is globalization?

There are many different conceptions about the definition of globalization. However, it can be summarized that it is about a dynamic process that is composed of a growing interdependence between the countries of the world. Something that happens using as a medium, a series of transformations of a global nature. Borders that before represented so many limitations, more often have less relevance.

So when asked What is globalization?

It is a growing process of industrial and trade internationalization, driven by the free flow of merchandise and capital, which has escalated exponentially with the use of technology.

This process has obviously also affected politics. The notion that nations are not alone in the world has caused certain global decisions to be taken by consensus among all countries, through the designated agencies. Although it is true that many times the countries with greater power carry the singing voice within these organizations.

This is the reason for the existence of a good number of international organizations in this globalized world, such as:

While this concept is not a new one, and in fact it began to be talked about since the second half of the twentieth century, there are experts on the subject, such as Aldo Ferrer who points out that this process really is part of an older one who was born in 1492. It was just with the discovery of America and European colonization by the world.

Regardless when globalization has begun, there is something that is undeniable and is that it is a complex phenomenon that still generates different opinions among people. For some it threatens national identity and is a form of neocolonism by the powers of the world. While for those who defend it, they explain that it is a huge opportunity for economic development and connectivity between nations.

And although you can have mixed opinions, something that does not change is that globalization is inevitable. A process resulting from human progress, chaotic in many cases and that requires adjustments and conscious evolution.

Characteristics of globalization

Mainly globalization can be seen as a economic phenomenon which in the last decades has undergone a series of relevant changes. Among its main features, you can find the following:

  • World trade in goods and services has grown in an amazing way.
  • New countries have opened to industrialization in Asia and America (China and Brazil are the best examples).
  • The imposition of policies favorable to free trade in most countries.
  • The financial system has been internationalized occupying a marked space in a capital market world.
  • It has had the support of large international institutions. Such are the cases of the International Monetary Fund and the World Bank. The large multinationals have also supported its development, thus favoring its expansion process.
  • Globalization has resulted in global economic interdependence.

Causes and effects of globalization

Globalization as any process of transformation owes its appearance to certain causes, which have evolved over time and adapted to the new demands of globalization. Between the most important causes From this phenomenon, we can find:

  • The new geopolitical restructuring of the world at the end of the Cold War. The years after the Cold War were times of change and the necessary climate was given for the emergence of new trends in the economy world.
  • Acceleration of economic opening rhythms, as well as exchanges of goods, merchandise and services. Liberation of capital markets and Stock Exchanges worldwide.
  • The revolution of the information and communication which thanks to the use of advanced technologies has allowed the connection in real time.

In the same way, between consequences of globalization, we can find some as they are:

  • Worldwide Collaboration: Globalization has made all the countries of the world have to work together for goals of common interest. This has opened doors for dialogue and the understanding of problems outside the country.
  • Loss of power by emerging states: With globalization, a large number of countries that had a high amount of power have lost it due to the distribution made over the years. These states have not only lost a part of their previous power, but consequently lose their autonomy, ability to decide for themselves in the solution to their problems and sovereignty. One of these examples is the loss of the monetary surcharge of European countries in favor of the European Union.
  • Technological advances and birth of other resources: With the rise of the internet and the increase in speed when it comes to sharing information in a much simpler and more fluid way, technological advances have been at the forefront. Successful countries focus the development of its economy on technology and innovation, to differentiate and generate higher incomes than the follower countries that base their development on the technology application already created by others.
  • Superconcentration of income: One of the most prominent negative consequences of globalization is that it generates a disproportionate concentration of income at some points. In other words, that wealth be found in few hands. From what is understood with her that the rich are getting richer and the poor getting poorer. Similarly, those countries that are slow at the technological level are gradually losing their ability to buy.
  • Present segmentation: This process creates defined limits on people, social groups and activities between regions or countries. Segmentation, differentiation and marginalization of individuals is a possibility that is always there.

Which statement best describes how globalization is affecting the world?

  1. Globalization is growing less important as time passes.
  2. The world is becoming more globalized and connected.
  3. Globalization has resulted in fewer connections among countries.
  4. Countries are growing less likely to trade with one another.

The correct answer is 2: The world is becoming more globalized and connected.

Due to modern means of communication and transportation, the world is unified. Some researchers believe that globalization is a natural process by which technology advances.

Advantages and disadvantages of globalization

It is a necessity for the human being to relate to each other. Proof of this is migration, and how it looks for a place where it can develop and undertake. Therefore, globalization is nothing more than a process that reflects the needs of the person to go beyond geographical and political boundaries. It is about economic growth and the proper way to take advantage of it.

However, as has been read throughout this article, globalization is classified by some as a negative process, while others as something productive. So Is globalization a good thing or a bad thing? Is it a positive process or a negative one? Is it productive or quite the opposite?

The answer has great simplicity, and that is that globalization is an economic-social phenomenon in which there are positive and also negative consequences. But both advantages and disadvantages are a common part of this concept. In addition, it should be noted that it is in a way, thanks to human nature, a natural process, which should not be forgotten has been sponsored by large companies and first world countries in search of an increase in their income.

Therefore, below you will know some of the main advantages and disadvantages of the phenomenon known as globalization:

Advantages of globalization

  • High cultural exchange: Globalization has allowed the internationalization of multiple cultures around the world. Each country has contributed part of its art, gastronomy, idioms, literature, etc., to other nations, in order to make their identity known and also as a way to encourage the country’s industries, such as tourism for example.
  • Highest level of communication worldwide: If something has taken care of globalization has been to encourage telecommunications to an impressive level. That is why whether family, friends, co-workers, or simple acquaintances, and even strangers, can connect and communicate. The greatest example, internet development and its influence on people’s lives.

Globalization has been especially responsible for encouraging Information and communication technologies (ICT), with which it is possible to communicate via text, voice or video instantaneously, wherever you want and when you want. Likewise, it can be mentioned that due to the implementation of roads, ports and airports, an individual can easily move from one city, state, country or continent to another without complications.

  • Technology and science development: Globalization has been responsible for breaking the boundaries on the goals to be achieved in the areas of science and technology. What it refers to is that forces have joined forces between different countries in order to achieve the best possible results in these areas. The cooperation of nations has been one of the keys so that numerous inventions and technological developments have taken place.
  • Increase in tourism: And finally, if a sector has obviously benefited from the globalization process, that has been that of world tourism. Thanks to this, it is possible that the tourist can travel anywhere in the world with relative ease. It is possible to obtain information on accommodations, transportation, food in a few clicks, as well as make reservations for these services from the country of origin using the internet.

All the information necessary to plan a trip is on the internet; Just plan and pay. Tourism is a vital sector for many countries, in addition to an excellent source of income because it is an economic activity that has the ability to leave a huge amount of foreign exchange to countries. Although there are also many detractors since many areas have been flooded by tourists, increasing the standard of living of people who really live in these countries and cities.

Disadvantages of globalization

  • Loss of national identity: One of the disadvantages of globalization lies in the possible loss of the national identity of a nation. Something that happens when the idioms, ways of thinking and traditions of other countries are taken as their own. Forgetting or not using in this way their own. When the culture of other nations begins to matter more than their own is a problem. As a method to counteract this situation, countries have the need to encourage national policies that have the purpose of teaching to value local culture and practice their expressions.
  • Influence of foreign companies on local politics: Foreign influences are normal in globalization This happens because of the freedom that exists to establish foreign companies in the countries at local or national level, something that added to migration is an important determinant of the country. On some occasions the influence of these foreign companies can be excessive, so the State must take measures to cultivate a strong national economic system. Where those influences are exploited as advantages, and not as disadvantages.
  • Job’s lose: Just as globalization can be an ally of national trade, it can also be your worst enemy. The reason is that it is capable of generating millions of jobs and destroying them. An example is that of the relocation of companies transnationals in those countries where state regulation is more lax with companies and salaries are lower. When a large number of jobs are lost through this process, many people will find it difficult to find a new job and, therefore, to consume and pay taxes; Therefore, domestic consumption and therefore the country’s economy will be negatively affected.

Examples of globalization

Examples of globalization are many, especially those spread across the tourism, technology, commerce and education sectors. However, to get a more organized idea, we will talk about examples according to their categories:

Economic globalization

Economic globalization is the process of growing economic interdependence of countries around the world. Among the causes of his birth is:

  • the increase in volume and variety of international transactions of goods and services
  • the increase in international financial flows of capital and labor

In fact, together with neoliberalism, it is one of the restructuring axes of world capitalism. Thanks to economic globalization, the world economy is qualitatively different from what existed a few decades ago.

Examples of economic globalization They are found in large multinational companies, whether financial or non-financial, around the world. They are responsible for increasing trade and capital flows between them. Another example is the national governments who have adopted the essential regulatory changes to enhance this process. Alike international organizations have played an important role.

Cultural globalization

Cultural globalization is a process of assimilation of the different cultures of the world, in order to generate what is a more homogeneous and common culture. Something that positively but also negatively affects existing cultural diversity. Technological development in communication has been an important factor so that this kind of globalization can be given in its entirety. It is through communication that cultural exchange is possible almost immediately.

With cultural globalization, for example, cultural exchanges are possible. Especially when there are customs that have been adapted to the specifications of others, when redefining itself, whether it be artistic expressions, music, fashion, gastronomy, etc. So when listening to a song by a famous foreign band in a language other than ours, an effect of cultural globalization is already being lived because the language barrier has been broken.

Social globalization

Social globalization refers to the one that has an impact on the life, work, families and societies of those involved. Even concerns and problems related to working conditions and income are included in this category. It also transcends the world of work, because it refers equally to issues related to security, identity and culture, as well as to the cohesion of families and communities.

Examples of social globalization are the new ways of thinking, the best job opportunities as well as the innovative forms of education. Business development and social growth are closely related.

Technological globalization

This process refers to the development of technology in collaboration with the nations of the world. For technological innovations to occur many times, it is necessary to complement the production units located in different countries, in order to take advantage of the potential of each one.

Examples of this can be found in the export of electronic equipment, as well as in their development and research in collaboration with transnational work teams.

Market Globalization

It is the process by which the overcoming of the economic system occurs where national markets correspond to entities isolated by barriers of commercial origin. They are also isolated by obstacles represented by distance, time and culture. The most overwhelming example of this has been the stock market, which encouraged by technological development and the internet.

Globalization of the information

This globalization occurs when the media has exceeded geographical and language boundaries, to reach all parts of the planet. The use of technology, digital platforms, has been essential for this in recent years. When you are watching a live broadcast from the computer of an event in another continent, you have an example of this.

Business globalization

Business globalization is the process by which companies from various countries make a link to increase productivity. The most obvious cases are those of large transnationals, which have managed to open branches in places that were previously believed inaccessible.

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