Why do we have globalization

They can achieve higher revenues in unsaturated markets while saving money via the lower cost structure that results from cheaper labor, rent, and materials. Global competition in the markets leads to both quality and affordability. As consumers realize they have a variety of options from all corners of the globe , they will choose to purchase the best and cheapest options, requiring companies to enhance quality and provide affordable prices if they wish to remain competitive.

The outsourcing of work also contributes to lower prices, as many companies hire foreign laborers to do the work for lower pay. Combining efforts and resources allows for more creativity and innovation to solve problems that affect people all around the globe. Conservation efforts and efforts to combat rising carbon emissions, for example, will require a concentrated global effort if they are to succeed.

Nongovernmental organizations NGOs use a collaborative approach to address issues that are not confined within borders, such as child labor, human trafficking, and health care and disease prevention. Not all the positive effects of globalization take place at the scale of billions and trillions of dollars. Cross-cultural exchanges of ideas, food, music, media, and language are just as valuable. Individuals who travel around the world for business or leisure and try different foods, listen to different music, read different books, gain exposure to different media outlets, and learn to express themselves, even poorly, in another language gain a broader perspective on the world.

Their new knowledge helps develop stronger empathy and appreciation for people of other cultures. Arguably one of the top advantages of globalization has been the rapid spread of technology worldwide. Google, Dell, and Microsoft, for example, all have offices on many continents. Developing countries often appeal to investors because of the huge potential for growth. The resulting advancements lead to results like the spread of motorized farm machinery in Southeast Asia, for instance, where there had previously only been manual labor.

NGOs also compile and spread knowledge. They shared these materials worldwide to help hospitals deal with the illness. For developing countries, especially, being able to skip the long technological development processes of industrialized countries brings rapid progress.

The rapid adoption of mobile technology has spurred entrepreneurism in countries like Kenya. Where it is dangerous or difficult to travel, small business owners simply use their mobile phones to reach clients and contractors.

They can also use their phones to track the prices of crops and find out which markets will bring in more money. Rapid technological advances have benefits other than economic ones. Pregnant women without access to traditional medical care can use their phones to keep in touch with midwives. The midwives, in turn, use their phones to connect to a system that doctors monitor at all hours. The infant mortality rate in Kenya, especially in its slums, is one of the top 65 in the world , but globalization has provided tools to help address some of the difficulty with pre- and postnatal care.

The European Centre for International Political Economy reports that globalization has helped reduce high inflation rates in western economies, so each dollar of consumer spending goes further. This development also has the effect of increasing real wages by lowering the cost of living. Additionally, competition on the global market means the prices of many items have declined, so purchases that were once unaffordable luxuries, such as laptops, cars, and washing machines, are now affordable for many people.

Foreigners come to seem completely unfamiliar under such conditions. But if people have networked with others from elsewhere over the world, spoken with them about common problems, and partaken of their food and culture, they are better able to perceive their common humanity and treat these others as equals.

Here are just a few. American companies have been known to use cheap foreign sweatshop labor to make cheap American goods. Wealthy, industrialized countries have shipped their trash to China and Malaysia. Exploiting cheap markets and lax regulations in developing nations has caused pollution and suffering in those countries, even as profits soar abroad. At mines in the Democratic Republic of Congo , where metals needed for electronics abound — gold and tungsten, tin and tantalum — armed militia groups, often using child soldiers, have taken over, keeping power with violence and trading minerals for guns.

Though the world gold price quadrupled over 10 years and electronics have become ever cheaper, globalization has not alleviated the poverty and violence in the country. The outsourcing of labor also leaves a dearth of jobs in industrialized countries, where labor is more expensive. When the United States outsources manufacturing to cheaper competitors in foreign markets, domestic manufacturing laborers lose their jobs.

Higher unemployment leads to discontent, strain on the social safety net, and lower tax revenue from income. Laborers whose skills are less relevant in a global marketplace will have a hard time adjusting to a world dominated by globalization.

Globalization presents challenges for multinational corporations in terms of capital investment and leadership. Setting up a business in a new country , especially a developing country, requires substantial upfront capital. The needed infrastructure may not be in place. This openness occurs through various relationships, from business, geopolitics, and technology to travel, culture, and media.

But the world is getting smaller, and companies need to understand what this means for the future of doing business. Globalization impacts businesses in many different ways. But those who decide to take on international expansion find several benefits, including:. Globalization makes it easier than ever to access foreign culture, including food, movies, music, and art. This free flow of people, goods, art, and information is the reason you can have Thai food delivered to your apartment as you listen to your favorite UK-based artist or stream a Bollywood movie.

Many countries around the world remain constantly connected, so knowledge and technological advances travel quickly. Because knowledge also transfers so fast, this means that scientific advances made in Asia can be at work in the United States in a matter of days. Globalization allows companies to find lower-cost ways to produce their products.

It also increases global competition, which drives prices down and creates a larger variety of choices for consumers. Lowered costs help people in both developing and already-developed countries live better on less money. Developing nations experience an improved standard of living—thanks to globalization.

Further, the target of the first Millennium Development Goal was to cut the poverty rate in half by This was achieved five years ahead of schedule, in Across the globe, nearly 1. Businesses gain a great deal from globalization, including new customers and diverse revenue streams.

Companies interested in these benefits look for flexible and innovative ways to grow their business overseas. International Professional Employer Organizations PEOs make it easier than ever to employ workers in other countries quickly and compliantly. This means that, for many companies, there is no longer the need to establish a foreign entity to expand overseas.

In addition to new markets, globalization allows companies to find new, specialized talent that is not available in their current market. For example, globalization gives companies the opportunity to explore tech talent in booming markets such as Berlin or Stockholm, rather than Silicon Valley. Again, International PEO allows companies to compliantly employ workers overseas, without having to establish a legal entity , making global hiring easier than ever.

Some of the hurdles companies face when going global include:. Recruiting across borders creates unknowns for HR teams. First, companies create a plan for how they will interview and thoroughly vet candidates to make sure they are qualified when thousands of miles separate them from headquarters. To ensure successful hires, HR teams must factor in challenges like time zones, cultural differences, and language barriers to find a good fit for the company.

Immigration laws change often, and in some countries, it is extremely difficult to secure visas for employees that are foreign nationals. The U. Another challenge both U. For companies looking to sell products abroad, getting those items overseas can be expensive, depending on the market.

Another common global expansion obstacle is managing overseas payroll and maintaining compliance with changing employment and tax laws. While globalization has made foreign countries easier to access , it has also begun to meld unique societies together.

The success of certain cultures throughout the world caused other countries to emulate them. But when cultures begin to lose their distinctive features, we lose our global diversity. Lower costs do benefit many consumers, but it also creates tough competition that leads some companies to search for cheap labor sources.

Globalization is an economic tsunami that is sweeping the planet. Leadership — We need politicians who are willing to confront the cheaters. One of our biggest problems is that 7 of our trading partners manipulate their currencies to gain unfair price advantage which increases their exports and decreases their imports.

This is illegal under WTO rules so there is a sound legal basis to put some kind of tax on their exports until they quit cheating. Balanced Trade — Most of our trading partners can balance their trade budgets and even run a surplus. The trade deficit is the single biggest job killer in our economy, particularly manufacturing jobs. We need the government to develop a plan to begin to balance our trade deficit even though this is not a political priority in either party.

The upcoming Trans Pacific Trade Agreement will do the same thing and Congress should not fast track this bad agreement for a dozen reasons. Enforcing the rules — China ignores trade rules and WTO laws with reckless abandon.

Besides currency manipulation they subsidize their state owned companies to target our markets, and provide funding to their state owned companies that dump their products in America. They also steal our technologies, sell counterfeit versions of our products, and impose tariffs and other barriers anytime they want - as we do nothing to stop them.

China does not deserve to be on our most favored nation list and we need to tax their exports to us until they stop these illegal activities. What is good for third world countries, like Kenya, or countries with tremendous growth, like China, has not been good for American workers. Globalization is deindustrializing America as we continue to outsource both manufacturing blue collar and white collar jobs.

Supporters of globalization have made the case that it is good because it has brought low priced imported goods, but they have not matched the decline of wages in the middle class and will not offset the loss of many family wage jobs. Globalization is like being overwhelmed by a snow avalanche. I would like to make the argument that the US should try a lot harder to swim in the snow and stay on top.

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