Globalization of Economy - Coursework Example

Insert GLOBALIZATION OF ECONOMY Globalization is the process whereby different people, communities, and countries interact. The worlds economy has recently taken a new dimension after many countries opened their markets to free trade. The knowledge of economy, information, science and technology spread to all parts of the world at a very fast rate facilitating the movement of goods, people, and information across the globe. Globalization of the economy has influenced almost every aspect of our modern lives because It involves countries’ economies being inter-related hence doing many things together. People from different countries are able to access products manufactured from other nations with ease and market what they have, thanks to globalization, which has made the world reachable and available to all (Boudreaux). It has also greatly reduced poverty levels in developing countries, and the number of those living below the poverty line has declined because companies in the developed nations shift their activities in search for cheap labor. The economy is a network of producers, distributors and consumers of goods and services in a local, regional and national community. The country’s economy will be determined by the amount of products they produce, the type of market they sell their products and the distribution channel they use. Countries that sell their products in the international markets are more likely to be having a greater economy than the ones that they sell to the local market. This is because the local market prices are cheaper than the international markets (Fairclough). Globalization of the economy is the increasing economic integration of national, regional and local economy across the world via the process of intensification. It occurs on the cross-border movement of goods, services, and capital. It mainly deals with the globalization of products, finances, markets, technology, and labor, which has significantly changed the level of urbanization and economic activities in many developing countries. Globalization of the economy has greatly increased integration and interdependence of nations’ economies due to cross-border movement of goods, technologies, and services. It entails the globalization of production, finance, markets, corporation, and labor. Globalization evidently led to the increase in income, economics growth and lower consumer prices in developing countries. It is because the countries will be able to specialize in certain products, which they have a competitive advantage and use the cheap product to make the finished goods hence getting profit with low prices (Ferguson). Globalization is the increase in the integration of countries’ economies, which means a reduction in barriers to trade and investment between different economies. The consumers are able to get a variety of products, and local firms are able to get a wider market. This increases specialization of products, and it also increases competition between different firms and countries, and it increases the investment. Generally, the global economy has more positive effects than the negative effects. Global economy leads to free trade between different countries this help to increase the market for the available goods. The countries are able to access international markets hence developing a wide variety of goods and services. Hence, there are infinite buyers and sellers in the market. Globalization of the economy has also led to growth and development of major cities and the surrounding urban regions that are fundamental building blocks of prosperity and quality of life of the communities (Hamilton and Wood). These big cities attract and become a focus of investment of many transnational corporations. Economic globalization helps the governments access foreign lending hence the funds can be used for infrastructure and increasing the standards of living of a country. Citizens will benefit since the funds are used for public development that will affect all the people; for instance building the roads. Faster economic growth leads to increased living standards of people. Global economic increase the job opportunities for foreign companies bring in investments hence the citizens of that country are able to access the jobs offered by the company. The free labor movement and removing barriers among nations will help the employees seek jobs in the other countries freely. These regional agreements help free movement of labor from one country to another (Haugen and Mach). It lead to a reduction of geographical inequality and help countries with labor shortage to find labor internationally. The economies of countries that are engaged in the global economy have grown faster than those that have maintained closed economy. This is vital since by engaging with other countries they are able to create an incentive for other producers hence improving their techniques for production. The idea in implementation helps the reduction of production cost and leads to the increase of output. They are also able to export their produce and import what they do not manufacture at cheaper prices (Katusic). International trade will lead to increased markets hence the country is able to produce many products due to the available market. Globalization in healthcare has also led to better healthcare and life expectancy. The free circulation of health professionals, patients, and drugs across nations helps the public health system meet the expectations of its patients, and the patients are able to access highly trained physicians of their choice. This creates a healthy nation, and the improved health care will lead to an increase in the wealth-improved economy of the country. A better health means better service delivery for workers and improvement in life expectancy of the people living in that country (Mazlish). Increased foreign direct investment due to a reduction in investment barriers leads to an increase the economy. Without trade barriers, the countries can trade freely and have the capability to increase the revenue that comes to their countries. The countries have the capacity of specializing in producing goods whereby they produce goods where they have a comparative advantage. By doing so, they will have a lot of gains, for instance, lower prices for their goods, have a greater choice of goods, the bigger export market for their goods and have greater competition from other companies (Mazlish). The companies from developed countries also push their products and services into the emerging economies, and both explore each other’s markets and economies. Increased trade interaction leads to reduced war threat and promotes understanding, peace and goodwill among different countries. When a country depends on another country, it is hard for the two countries to go to war. Global economy stabilizes the security of the two countries that they interact. The diplomatic and political relationships brought about by this economic interdependence are a channel for peace. In addition, in case one country is attacked, the other country that they trade with will be willing to help since one of the country’s financial health depends on the others (Merino). The increase in trade openness also reduces the ability of military conflicts among nations. Hence, globalization promotes peace, which leads to prosperity through the peace holds for trade interdependence and integration into the global market. It also enhances national security since they cannot trade with enemy countries. Foreign companies have adopted improved standards for workplace and increased wages. It tends to help the working conditions of employees of that country since foreign companies provide better pay and working conditions than the local companies do. This, in the long run, raises the living standards and the citizens and increases ideas for innovation through the acquired knowledge. This is because they have large capital and better skills than the local companies do. Internet, which is also a product and catalyst of globalization, is connecting users around the world International trade leads to greater recognition of diversity and respect for cultural diversity. It is because the international trade deal with different culture and they need to respect this since they will be working together (Merino). They need to let them trust them in order to win their customers. International trade helps in diversification since they deal with different people who have different ideas, and they are able to share and adopt new ideas of doing things and vice versa. Technology has also brought in internet, TV cables and satellite, which is slowly sweeping away cultural boundaries and brings the perception of ordinary citizens wherever they live. Internal economies of scale depend on the size of the company. Large international companies perform their purchases in bulk and at a lower cost per unit of materials needed for production. Large companies use globalization to reduce costs and prices which favor economic growth because they can pass savings to consumers and increase profits (Reese). They are able to buy goods in large amount with reduced buying price and resell in small quantities at a higher price hence getting more profit therefore increasing the country’s economy. Competition from globalization new tools development and foreign direct investment, which helps in improving economic output and efficient processing. The implementation is set at an advantaged position to the consumers since they are able to benefit from cheaper products due to competition from other markets hence the need for these companies to reduce the prices of their products. Foreign direct investment increases in companies’ whether local or global. Globalization also boosts technology transfer. Technology helps to make work easier, for instance, the use of the internet to do research on the best method to maximize the profits and minimizing costs. The use of ATMs also helps to reduce the time wasted while you are in a queue. Technology as also made communication and service delivery easier since you are able to deliver the information quickly as compared to the old days whereby you could take long by sending a message through the postal mail (Reese). Globalization of the economy has also increased the protection of the environment, safe use of chemicals and safe disposal of waste products in developed countries and developing countries in the end. Industries have to adhere to the environmental conditions, and although this may slow down economic growth, it brings a greater reward to the country in a long time. Developing countries should boost economic growth as this can promote the protection of the environment and investing companies should use the economic opportunities for poor nations in the environmentally friendly way (Sjursen). Global economy leads to equality throughout the world. Although some countries say their standards of living have gone down due to globalization, most people around the world have jobs and can provide for their families because of it. Globalization might have stopped some people from buying luxury things, but it has helped other people to have food to eat (Sjursen). This is beneficial to the poor countries as they can be able to provide the basic needs for their citizens and bridge the gap between the rich and poor. Economic globalization has enabled the production of fresh fruits and vegetables in some countries during winter this make lives easier. Globalization also helps us diversify in our daily needs. It helps in the production of farm products especial for those countries that have harsh weather and cannot be able to produce farm products. They can trade with other goods and in exchange, they are able to get the food that they cannot produce (Sjursen). For instance, countries in arid and semi-arid land can sell the oil products they mine and buy food products that they cannot be able to grow with their trading partners. Globalization has really helped in improving the lives of the people in developing countries. Transnational Corporation offers jobs and education, which help them recover from poverty and achieve any goals that they set for life. By doing this corporations will be helping the citizens of that country improve their education and by offering better jobs and better salaries than the local companies. They will have a strong brand name because they will be known for their corporate social responsibility to the society (Boudreaux). The education earned will also provide them better living standards. Globalization has brought effects that are more positive and the way it is delivered in developed and developing countries. Educational technology has transformed the way the students learn and equips them with a variety of skills and knowledge to face the competitive global market. The learners are able to innovate and apply their skills in improving the productivity of the nation. Globalization, however, has some negative effects on other sectors of the economy such as economic depression and competition, but they are what the involved nations and companies can find solutions for in other ways (Fairclough). Developing nations have done themselves a great favor by embracing globalization because they benefit more than the already developed countries. They are able to raise the standards of their products to global markets and improve lives of its citizens. The acquired knowledge also improves their skills and innovation. Global economy reduces the gap between the educated and those not educated. Education increases the economy of the country hence the poor will continue to be poor and the rich will increase their wealth. As much as global economy reduces unemployment it also increases the gap between the rich and poor (Fairclough). Generally, the growth of global markets has helped in specializing the labor market and promotes competition. It is as also helped to generate more job opportunities. The expansion of markets has lead to increased imports and exports. Countries are supposed to be prepared to embrace the policies especially the international community since they are the ones to support the poor countries in order to get equality. Globalization is all about sharing and dispersing the information. This is through innovation either by a business organization or through the government implementation of policies. Most of the countries now days are globalizing since they have known the reason for doing so. The more a country is globalized, the higher the economic growth of the said country. Countries have come together to form trade unions that represents the trade between countries of certain regions. These trade unions agree to remove the trade barriers between the participating countries (Hamilton and Wood). They make sure that there are no tariffs and quotas in their trade hence allowing free trade. This free trade is good but at the same time, it allows the dumping of the goods in certain countries. For instance, some countries may manufacture goods that are of low quality and dump them in other poor countries. This has made countries come up with antidumping policies. Works Cited Boudreaux, Donald J. Globalization. Westport, Conn.: Greenwood Press, 2008. Print. Fairclough, Norman. Language And Globalization. Semiotica 2009.173 (2009): n. pag. Web. Ferguson, Niall. Sinking Globalization. Foreign Affairs 84.2 (2005): 64. Web. Hamilton, Sara M, and Bob Wood. Globalization. Edina, Minn.: ABDO Pub. Co., 2009. Print. Haugen, David M, and Rachael Mach. Globalization. Detroit: Greenhaven Press, 2010. Print. Haugen, David M, and Rachael Mach. Globalization. Detroit: Greenhaven Press, 2010. Print. Katusic, Bernarda. Media Globalization. Kultura 138 (2013): 75-92. Web. Mazlish, Bruce. Globalization Nationalized. New Global Studies 3.3 (2010): n. pag. Web. Merino, Noël. Globalization. Detroit: Greenhaven Press, 2010. Print. Reese, Stephen D. Journalism And Globalization. Sociology Compass 4.6 (2010): 344-353. Web. Sjursen, Katrin. Globalization. Bronx, N.Y.: H.W. Wilson Co., 2000. Print. Read More