The term globalization is used to describe the changes in the world order where different aspects of a nation are viewed as part of a global community. It is broadly used to refer to increased interdependence and integration of international social relations and economic activity. Although the term tends to have economic connotations, it also involves an increase in technology usage, exchange of knowledge and ideas as well as research and development.
Globalization Effects and Drivers
Globalization has enabled regions that used to be isolated from the rest of the world to be connected, accessible and assimilated with the global community. Globalization joins the whole world rather than just neighboring regions. Several factors have contributed toward globalization, including fewer international trade restrictions, the beginning of transnational trade and commerce, technological change, more direct foreign investment by developed countries into less developed ones and an overall westernization of developing nations. Communication is getting easier in spite of different government restrictions.
This type of globalization involves merging of formerly separate and independent national markets into a global one. This renders it meaningless to refer to markets of individual countries. Market globalization facilitates international trade as it enhances the removal of trade barriers. The respective tastes of consumers from different parts of the world are homogenized to form global standards, which enable them to receive the same products from different companies. Globalization of markets also leads to stiffer competition as businesses compete for customers from different parts of the world.
This type of globalization makes it possible for companies to source for goods and services from different parts of the world. This helps them to take advantage of differences in quality, cost and the performance of things like raw materials, land, capital and labor. Companies have a better chance of increasing both volume and quality while they lower their costs at the same time. Companies become more competitive as they develop their respective international production networks. Closely related to this is the globalization of products that comes into play due to the constant need of ever-newer products, which are made available to consumers from different parts of the world.
Other Types of Globalization
The development of media throughout the world as well as the disappearance of local production and lifestyle creates cultural globalization. There is also geopolitical globalization, where the political decisions in one nation have an effect in other countries. Nations also come together to form organizations that regulate things that happen in participating countries. There is also ambient globalization, where global warming is concerned because of increased emission of carbon dioxide. Therefore, globalization encompasses economic, social, cultural and political spheres.