What Are The Benefits And Drawbacks Of Globalization - Essay Example

It is aided by rapid technology advancement, which has made communication easier; thus enabling countries or business people to interact freely with customers across the globe. However, globalization has become the major worldwide issue because of diverse setbacks that a rise in the process of globalization. For instance, globalization process has detached some industries from the state. This is because some industries especially privately-owned companies have numerous shareholders from other nations who focus on return on investment.

This means that some decisions are made at the interest of the company, which also contributes to social, economic and environmental issues. Although globalization contributes to increased competition, which impacts infant industries, competition keeps the cost down and lowers the global barriers, as well as, contributes to a capitalist society. Benefits Globilization creates competition for local industries; hence keeping costs down or lowering the international barriers. For instance, the European Union can carry out trading activities effectively with NAFTA and ASEAN.

The trading allies were implemented especially the trading agreements and policies such as import substitution industrialization (ISI) policies (Lane 231). The ISI has been allied with the policies of economic development employed in less developed nations in the midst of the 20th century. These policies were employed by England economy to reward off competition from Dutch entrepreneurs and also used by other economies for enabling national industries to face global competition. The economic interdependence amid diverse countries can build advanced social, economic and political links; thus globalization is good strategy for economic development.

Globilisation promotes interdependence and enables countries to social interact with others, as well as, improve their economic growth. For instance, developing nations oversaw the ambitious economic and rapid industrialization period beginning from 1930s 01980s because of the access to wider markets and consumers were also able to access to commodities effectively. Many of them changed their economic activities to industrial activities. The era of industrialization has been viewed as an effective process for economic growth; thus many developing have significantly benefited from globalization.

Drawbacks Globilization contributes to increased competition; thus impacting infant industries in the local economy. The augmented competition of products in the marketplace results due to globalization aspects. This also contributes to increased dumping rate for commodities in certain economies at a low cost and this may harm or impact the performance of industries in other nations. Rapid technology advancement contributes to increased competition level in the market as industries find ways of increasing productivity; thus they employ varied competitive strategies vital enabling them to achieve competitive advantage.

International companies have become highly competitive; hence they manufacture high innovative products; hence they are able to compete favorably with their rivals. Globilization aspects are linked to capitalism in the global markets; thus rich or industrialized economies continue to prosper leaving the developing or poor nations dragging behind. Lane (178) argues that capitalism has been always a political phenomenon meaning that unrealistic market forces sweeps away that comes before them. The spread of capitalism resulted due to technology advancement; thus, many economies have become hi