What is Globalization, its characteristics, advantages and disadvantages?

          The term globalization generally refers to the expansion of global linkage in every aspect of life, weither in economic, social, technology, transportation or political. Globalization brings a new era in this modern age. It is said that, the modern age is also known as the age of globalization. Each and every person is affected by the wave of globalization. It increases the connectivity of the world. One can understand and know the world by sitting in one corner of the world. Territorial boundaries are no longer a limitation to the people. People may be affected by an event happening miles away from them. It organizes the social and economic life of the people on a global scale and also increases the growth of global consciousness.

        The terms globalization is derived from the word “GLOBALIZE”, which means emergence of an international network of social and economic system. Globalization brings more interdependence, integration and interaction among people and companies spread across distant locations. It is usually associated with the pursuit of neo-liberal or free market in the world economy. The world economy is not dependent only on one country or some few countries. Every country is an actor in the world economy. So, the free market system has become a basic necessity of globalization.

 

         As globalization covers a wide range of dimensions and process, the exact meaning and definition of globalization will always remain disputed. Definition depend on what they emphasis. Its meaning may be differing from one person to another. Some of the aspects of globalization are given below:

 

          Stieglitz in his book “GLOBALIZATION AND ITS DISCONTENT” define globalization as the closer integration of the countries and people of the world, brought about by the enormous reduction of cost of transportation and communication and breaking down of artificial barriers to the flow of goods, services, capital, knowledge and people across borders.

 

         Jeffrey Hart has identified five concepts represented by globalization:

1: The existence of a global infrastructure.

2: Global harmonization or convergence of some important characteristic feature.

3: Borderlessness

4:  Global diffusion of some initially localized phenomenon.

5: Geographical dispersion of core competences in some highly desirable activities.

 

          The international monetary fund[IMF] define globalization as “the growing economic interdependence of countries worldwide through increasing volume and variety of cross border transaction in goods and services, free international capital flow and more rapid  and widespread diffusion of technology. In 2000, the IMF identified four basic aspects of globalization:

1: Trade and transactions.

2: Capital and investment movements.

3: Migration and movement of people.

4: The dissemination of knowledge.

 

Characteristics of Globalization:

Some of the basic characteristics of globalization are given below:

 1: Deterritorialization:

          Nowadays, territory is no longer a limitation to the people. Various social activities can take place irrespective of the geographical location. Global events can occur almost simultaneously anywhere and everywhere in the world through various means. Various information of any part of the world can be easily assessable by sitting in any corner of the world. Social events happening in one country can impact to other countries also. Social activities have become non-territorial events.

 

2: Social interconnectedness:

         The world is changing fast in the field of technology. New technologies help the people to connect easily. Any information or events of one place can be easily assessable to some other places. The events of some countries can be seen directly by the world. Any activities of one place are not confined to that area only. The growing technology helps the world to influence one society another society. Human activities are no longer tied to geographical locations.

 

3: A long term process:

          Globalization is treated as a long term process. The impact of globalization is not able to see in a short period of time. Through the process of globalization started in the 19^th century, it has taken an intense form only in recent decades. New innovations in the communication, transportation and information technology have brought a new phase in the globalization.

 

Advantages of globalization:

1: Proper use of resources:

          Globalization leads to the expansion of markets and this helps the world to use its resources properly. New innovation reduces the cost of transportation and communication and hence enables the organization to save its time and money.

2: Multiple choices:

         The needs of the people are able to supply because of globalization. No country is self sufficient and every country depends upon other country. Some items may be available in one country which are not available in some other country. Globalization brings the world closer and many more items are made available in the country. Hence people can have better choice to satisfy their need.

3: Foreign exchange:

          Globalization enables the country to export more. It encourages exports and discourages imports. More exports means more income, more income leads to greater GDP of the nation and hence provide a better standard of life.

4: Creates employments:

          Globalization helps to provide employment to a large number of people. Multinational companies (MNCs) are some representative of globalization that provides large number of employment.

5: Benefits to the consumer:

         Globalization encourages free and fair competition at global level. Consumers get much wider variety of products to choose from. Consumers get the products they want at more competitive and cheaper price.

 

 
Disadvantages of globalization:

1: Widening of rich-poor gap:

          Globalization brings benefit to the rich who are small in number and keep the vast majority of people in poverty and misery. Those who are already rich succeed in taking advantages of privatization while the poor and weak are doomed to suffer.

2: Exploitation of under-developed countries:

          Multinational companies (MNCs), based in developed countries, purchase raw materials at lower rate from backwards countries, process them in their own countries and sell the manufactured goods with big profit in backward countries.

3: Harmful effects on small industries and small business:

         The small industries and small business of developing countries can be put into danger as they do not have enough resources to compete at global scale. In the free economy, the big fish has got license to eat small fish. Global level big companies can easily ruin the local traditional small and medium industries of the developing countries.

4:  Adverse effects on social security and social welfare:

          Because of privatization, governments in many developing countries are withdrawing from the sector of social welfare and private companies have entered in many various field. As a result of this, poor people are facing lots of difficulties as they are not able to afford the high price of private companies. Private companies are profit maximization motive organization.

5: Destruction of environment:

          Nature can satisfy the need of the people but nature cannot satisfy the greed of the people. In the name of economic development, environment is blindly destroyed. Globalization can ruin the natural environment.