Globalization isn’t something that started yesterday; infact, it has been existing ever since humans started moving from one place to another in the world. With that said, globalization has become rapid recently, and it has become global advancement all thanks to technological growth that has facilitated the increase of globalization around the world.
It is no hidden fact that globalization has had an impact on almost all parts of modern life, most notably in regards to the global economy.
Put simply, globalization is seen as the phenomenon which aims to increase business operations on a global scale, and it is facilitated by technological, political, and environmental advancements which create a favorable platform worldwide. The impacts of globalization on the world economy is quite evident when it comes to buying and selling. Take, for instance, in the US, close to 36 percent of all shoes, and clothing is made in China, with only about 4 percent made within the shores of the country.
Impacts of Globalization
1. Increased competition
When there are multiple producers competing for a stake in the economy, it is always a positive sign for consumers, as such competition will bring about the production and delivery of quality goods and services. This means better products at a competitive price.
2. Foreign direct investment
Globalization leads to more foreign direct investment. Since trade among different economies occurs at a more favorable rate, FDI tends to increase and benefit from it.
3. Technology development
One of the by-products of globalization is an increase in competition, and competition doesn’t just bring out the best in people, it also brings out the best in nations as well. Improved competition as a result of globalization helps to bring about technological innovation, most especially when there is an increase in foreign direct investment — all of these help to enhance economic output via efficient processes and method of production.
If you ask most economists about the impact of globalization on the world economy, they will echo the same thing that it offers a massive benefit to economies in the world. It achieves this by creating a more efficient market, enhancing competition amongst individual economies, and facilitating an increase in wealth among economies in the world.
Yes, globalization might look like a costly venture, but the long-term benefits, and sometimes the short-term benefits are essential to economic growth. This is part of the reason why the consensus among economies is that globalization is beneficial to individual economies in the world, and as such, it should be welcomed by individuals, businesses, corporations, and government as a whole.
Globalization has had its impact not just on individual economies around the world, but also on lives, businesses, and corporations. Its impact on a global scale has led most economists to agree that it is beneficial to the world economy.