30 Globalization Pros and Cons
Chris Drew (PhD)
Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education. [Image Descriptor: Photo of Chris]
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Definition: Globalization refers to the increasing global interconnectedness of nations. It it not only economic integration. It also refers to cultural , technological , social , and political integration (Dincer et al., 2018). A good catch-all definition comes from Hodos (2016), who writes: “Globalization is defined as the process of becoming globally connected.”
Globalization Pros and Cons
The advantages of globalization, 1. increased economic growth.
Globalization facilitates technology, knowledge, and goods transfer, which in turn boosts economic growth (Erixon, 2018).
Through globalization, countries can now purchase the newest technologies and import the most productive machinery from other countries.
This means every country now has access to the most productive machineries, making the whole world more productive. Productivity means more output, which means more economic growth.
2. Cultural exchange and diversity
Globalization facilitates cultural exchange and diversity by increasing interactions among people from different parts of the world through trade, travel, and communication.
This exposure leads to the sharing of ideas, traditions, languages, and values across borders, enriching the cultural landscape of participating societies.
Such interactions often lead to the fusion of cuisines, music, art, and fashion, creating new, hybrid forms of cultural expression.
3. Improvement in global communication
Globalization is both caused by and a catalyst for the expansion of global technology and telecommunications. For example, the internet helps facilitate global trade, and demand for a fast and reliable global internet has stimulated its technological development.
The resulting interconnectedness allows for real-time communication across different countries, breaking down geographical and temporal barriers. The result is a more integrated world where cultural and professional exchanges occur more seamlessly.
4. Greater access to foreign investment
Globalization leads to greater access to foreign investment. With broken-down financial barriers, businesses can now source overseas investors for funds. This helps push down the cost of investment and stimulate local business (Erixon, 2018).
It’s also good for investors. They can diversify their portfolios by investing in different countries, and developing countries can benefit from foreign capital to fund growth and development projects.
This influx of foreign investment can lead to economic growth, technological advancements, and increased employment opportunities in the recipient countries.
5. Access to new markets for businesses
200 years ago, everyday small businesspeople could generally only trade with nearby communities. They had to get goods to market via horse and cart and anything perishable had to be consumed fast. There were no refigerators!
Today, with global supply chains, refrigerators, and free trade agreements, even small businesspeople have access to global markets.
Companies can therefore expand their operations and customer base beyond their domestic markets, tapping into demand in different countries (Erixon, 2018).
6. Increased migration opportunities
Globalization has opened up global labor markets. Nowadays, it takes less than 24 hours to move anywhere across the world. No more 3-month boat rides! This has allowed highly-skilled professionals to cross the world and get jobs exactly where there is market demand.
This mobility benefits migrants through better opportunities, the companies by linking them up with the best possible employees, and also contributes to the cultural and economic dynamism of the host countries (Dumont, Rayp & Willemé, 2012).
7. Reduction in prices of goods and services
Globalization leads to a reduction in prices of goods and services by allowing countries to specialize in producing goods where they have a comparative advantage, leading to more efficient production and lower costs (Mir, Hassan & Qadri, 2014).
The removal of trade barriers and the increased competition in global markets drive down prices, making products more affordable for consumers (Erixon, 2018).
Additionally, the global supply chain means consumers have access to a wider variety of goods and services from different parts of the world.
8. Increased competition leading to innovation
Globalization leads to increased competition because you’re no longer just competing with Bob down the road. Businesses are now competing with other businesses from the other side of the world (Erixon, 2018).
While at first this competition sounds bad, it tends to have positive effects. For example, it spurs innovation as companies strive to maintain their competitive edge in a global market.
The exposure to different market needs and technological advancements across borders encourages businesses to innovate and improve their products and services.
This competition not only drives technological advancement but also leads to better quality and diverse options for consumers.
9. Opportunity for developing countries to develop faster
Developing countries need foreign investment and access to foreign markets in order to grow. Globalization provides this access (Mir, Hassan & Qadri, 2014).
This exposure to global markets and capital can accelerate economic growth, create jobs, and promote infrastructure development.
Furthermore, the exchange of knowledge and best practices with developed nations can enhance the skills and capacities of the workforce in developing countries, leading to sustainable development.
10. Spread of democratic values
Some argue that globalization has led to the spread of democratic values. Arjun Appadurai calls this the “ideoscape” of globalization.
The global spread of media and the internet allows for the rapid dissemination of democratic ideals and human rights concepts.
We saw this, for example, during the Arab Spring of 2011, where activist groups multiple countries in the Arab world collaborated via social media to demand democratic reforms.
11. Global talent pool for employment
Globalization leads to a global talent pool for employment as businesses and organizations have access to a wider range of skills and expertise from around the world (Dumont, Rayp & Willemé, 2012).
Enhanced mobility and interconnectedness allow employers to recruit talent from different countries, enabling them to meet specific skill requirements more effectively.
This global workforce diversifies the workplace, fosters innovation, and enhances competitiveness by bringing together diverse perspectives and experiences.
12. Enhanced opportunities for high-skilled workers
Globalization leads to enhanced opportunities for high-skilled workers as it opens up a vast array of international job opportunities in various sectors, including technology, finance, and healthcare (Dumont, Rayp & Willemé, 2012).
These workers can leverage their specialized skills in a broader market, often finding better employment prospects, higher salaries, and advanced career development options globally.
Moreover, the exchange of expertise and knowledge across borders contributes to professional growth and the advancement of specialized fields.
13. Enhanced global cooperation and peace
Globalization could also, in an optimistic scenario, lead to enhanced global cooperation and peace. This is based on the theory that increasing economic interdependence among nations encourages diplomatic relations and collaboration rather than war (Baldwin, 2008).
The shared interests in maintaining stable trade and investment environments promote peaceful interactions and reduce the likelihood of conflicts.
Furthermore, international institutions and agreements foster a platform for dialogue and conflict resolution, contributing to global stability and peace.
14. Widening networking opportunities
Globalization leads to widening networking opportunities as it connects people from different cultures and professional backgrounds through international business, education, and social media platforms.
These connections facilitate the exchange of ideas, collaboration on projects, and the formation of global communities with shared interests and goals.
This extensive networking can lead to new business opportunities, partnerships, and innovations, benefiting individuals and organizations alike (Dumont, Rayp & Willemé, 2012).
15. Access to more goods for consumers
Globalization leads to access to more goods for consumers by breaking down trade barriers and enabling the efficient flow of products across borders (Mir, Hassan & Qadri, 2014).
Amazon Canada doesn’t have the product? No problem, try Amazon UK instead!
This results in a wider variety of goods available in the market, often at lower prices due to increased competition and economies of scale in production.
Consumers benefit from the improved quality, variety, and affordability of products, enhancing their purchasing choices and overall quality of life.
Disadvantages of Globalization
1. widening of economic disparities.
While the above positives sound good, many like Naomi Klein argue that globalization can lead to the widening of economic disparities as it often benefits developed nations and those with competitive advantages, while less developed countries may struggle to keep up.
This can result in increased wealth for certain regions and sectors, while others may experience stagnation or decline in economic growth. The result is a growing gap between the rich and the poor, both within and between countries.
2. Cultural Homogenization (Loss of local cultures)
There is an argument that globalization can lead to the loss of local cultures and identities as global brands and Western media dominate, overshadowing local traditions, languages, and practices.
We call this ‘ cultural homogenization ‘.
The spread of a homogenized global culture can dilute the uniqueness of local cultures, leading to a decrease in cultural diversity. People may adopt global trends at the expense of traditional values and customs, leading to a loss of cultural heritage.
Others dispute this claim, arguing instead that globalization leads to a process called glocalization .
3. Exploitation of labor in developing countries
Globalization can lead to the exploitation of labor in developing countries (Sharma, 2014). Multinational companies may seek to minimize costs by relocating production to regions where labor is cheaper and regulations are less stringent (e.g. opening up factories in Mexico and China instead of midwestern USA).
This can result in poor working conditions, low wages, and a lack of labor rights, exploiting the workforce in these countries. The pursuit of profit by global corporations can overshadow the need for ethical labor practices, leading to exploitation.
4. Environmental degradation
Environmentalists are often concerned that globalization is exacerbating environmental degradation. Increased industrial activity and international transportation contribute to pollution and natural resource depletion (Mir, Hassan & Qadri, 2014).
The global demand for goods encourages mass production, often without adequate environmental safeguards, leading to habitat destruction, loss of biodiversity, and climate change.
The focus on economic growth and consumerism can overshadow the need for sustainable environmental practices, exacerbating global environmental challenges.
5. Increased risk of financial contagion
Globalization leads to an increased risk of financial contagion as economies become more interconnected, meaning that financial crises can quickly spread from one country to another (Mendoza & Quadrini, 2010; Mir, Hassan & Qadri, 2014).
This interdependence is due to global investment and the intertwined nature of banking and financial markets.
A financial problem in one country can lead to investor panic and a loss of confidence, triggering a domino effect that impacts economies worldwide.
6. Over-dependence on global markets
Globalization leads to concerns that countries are over-dependent on foreign markets for essential supplies.
This dependence can make economies vulnerable when supply chains break down. When a major global shock occurs, countries heavily reliant on that market for exports or investment can experience significant economic disruptions (Mendoza & Quadrini, 2010).
For example, most nations in the world are reliant on Taiwan for computer chips. If Taiwan were suddenly invaded by China, the rest of the world won’t be able to produce sufficient computers!
7. Threat to local businesses and industries
In a globalized marketplace, local businesses face intense competition from larger multinational corporations.
These multinationals often have greater resources, technology, and access to larger markets, which can overshadow local enterprises (Burlacu, Gutu & Matei, 2018).
This intense competition can lead to the closure of local businesses, loss of traditional industries, and a decrease in domestic job opportunities.
8. Erosion of national sovereignty
National sovereignty is threatened by a globalized world. Governments may be compelled to alter their policies and regulations to attract global investment and remain competitive in the international market, locking themselves into international trade agreements that require compromise and cooperation (Burlacu, Gutu & Matei, 2018).
This can result in countries losing control over their economic, social, and environmental policies, potentially prioritizing international interests over national priorities.
9. Downward pressure on wages
Globalization can lead to downward pressure on wages as businesses seek to reduce costs by outsourcing jobs to countries where labor is cheaper (Mir, Hassan & Qadri, 2014).
This competition for lower-cost labor markets can result in wage stagnation or decreases in higher-wage countries.
Additionally, the influx of workers willing to accept lower wages can suppress wage growth even in sectors not directly exposed to international competition.
10. Spread of Political Ideologies
While earlier I noted that globalization may have sped up the spread of democracy, the opposite may occur.
While democracy may have been promoted by globalization – especially in the 20th Century – the same could happen with anti-democratic ideologies . For example, recently we have seen the spread of authoritarianism and “illiberal democracy” across the world.
11. Brain drain in developing countries
Globalization leads to brain drain in developing countries as highly educated and skilled professionals migrate to developed countries in search of better job opportunities, salaries, and living conditions (Dumont, Rayp & Willemé, 2012).
This migration of talent results in a significant loss of skilled labor for the originating countries, impacting their development and economic growth.
The departure of these key individuals can also lead to a shortage of expertise necessary for local advancement and innovation.
12. Spread of diseases across borders
Globalization leads to the spread of diseases across borders as increased international travel and trade facilitate the rapid movement of people and goods around the world.
This mobility can enable pathogens to cross geographical boundaries more easily, leading to the faster spread of infectious diseases.
Outbreaks that might have been contained within a region in the past can now quickly escalate into global health emergencies.
13. Vulnerability to global economic fluctuations
A globalized nation may be vulnerable to global economic fluctuations as economies become increasingly interconnected through trade, investment, and financial markets (Mendoza & Quadrini, 2010).
This interconnectedness means that economic issues in one country or region can have ripple effects globally, impacting economies that might not be directly related to the initial problem.
As a result, even local economies can be significantly affected by economic downturns or crises occurring in distant markets.
14. Concentration of corporate power
Some argue that globalization leads to the concentration of corporate power as large multinational corporations expand their reach and influence across multiple countries (Cowling & Tomlinson, 2005).
These corporations can dominate markets, overshadowing smaller local businesses and potentially manipulating markets to their advantage.
This concentration of power can lead to reduced competition, influence over political and economic policies, and an unequal distribution of economic benefits.
15. Potential for global monopolies and oligopolies
Similarly, globalization could lead to the potential for global monopolies and oligopolies as dominant corporations expand their reach across international borders (Burlacu, Gutu & Matei, 2018).
These entities can gain excessive market control, limiting competition and potentially leading to higher prices and fewer choices for consumers.
The global scale of these companies makes it challenging for new entrants to compete, and their influence can extend to shaping market regulations and policies in their favor.
Baldwin, R. (2008). EU institutional reform: Evidence on globalization and international cooperation. American Economic Review, 98(2), 127-132.
Burlacu, S., Gutu, C., & Matei, F. O. (2018). Globalization–pros and cons. Calitatea , 19 (S1), 122-125.
Cowling, K., & Tomlinson, P. R. (2005). Globalisation and corporate power . Contributions to Political Economy , 24 (1), 33-54.
Dincer, H., Yüksel, S., & Hacioglu, Ü. (Eds.). (2018). Strategic Design and Innovative Thinking in Business Operations: The Role of Business Culture and Risk Management . Springer International Publishing.
Dumont, M., Rayp, G., & Willemé, P. (2012). The bargaining position of low-skilled and high-skilled workers in a globalising world . Labour Economics , 19 (3), 312-319.
Erixon, F. (2018). The economic benefits of globalization for business and consumers. European Centre for International Political Economy .
Hodos, T. (Ed.). (2016). The Routledge Handbook of Archaeology and Globalization. Taylor & Francis.
Mendoza, E. G., & Quadrini, V. (2010). Financial globalization, financial crises and contagion . Journal of monetary economics , 57 (1), 24-39.
Mir, U. R., Hassan, S. M., & Qadri, M. M. (2014). Understanding globalization and its future: An analysis. Pakistan Journal of Social Sciences , 34 (2), 607-624.
Sharma, N. K. (2013). Globalization and its impact on the third world economy. Crossing the Border: International Journal of Interdisciplinary Studies , 1 (1), 21-28.
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Benefits of Globalisation Essay
The introduction, some fundamentals on globalisation.
It is impossible to imagine the modern world without such phenomenon as globalisation. Generally, there are many definitions, which cover the term; although the most appropriate one is mostly related to the filed of economy and business.
Thus, globalisation is considered to be a process “by which the world economy is fast becoming a single independent system” (Angiello & Laguerre, 2004). There is a wide range of viewpoints on globalisation: some scientists associate the process with negative outcomes; while others support the opposite opinion and speak about a variety of opportunities globalisation offers.
The thesis statement
The issue of globalisation can be regarded rather ambiguously. For this reason, it seems to be obvious that the international process should be analysed both – from the positive and negative perspectives. A detailed analysis of the consequences globalisation brings about can help clarify whether the phenomenon is considered to be a major driving force of the world economy; or it just generates significant negative effects.
The benefits of globalisation
Some historians are of the opinion that the international process leads to the so-called social inequality; for instance, they consider the gap between rich and poor societies as one of the negative consequences globalisation brought about.
However, in my opinion, it is wrong to compare different societies according to the levels of their prosperity, as the kind of comparison reminds me of comparing round items to square ones.
It should be noted that if societies are ready to accept the international trade, the outcomes will positively affect national incomes; although societies are to practice a wide range of approaches, but not to follow a regular way. In other words, there is a strong need to balance the many competing goals in order to succeed.
A competitive advantage is recognised to be one of the most important variables the benefits of trade depend upon. It is proven that the international process helps countries gain higher incomes.
Thus, in the early nineties a special investigation was conducted; according to the results of the investigation it became evident that rich countries’ GDP increased by 2% annually. That is to say, as far as more globalised countries seemed to undergo a higher increase in GDP per year, less glonalised countires underwent the opposite situation: they experienced economic downfall.
Another negative approach in relation to globalisation is associated with child labour. In poor countries, children are forced to work, as their labour is considered to be the only appropriate way to survive. Rich countries have a wide range of social services and can provide their children with medical care, education, etc. Such benefits are possible partly due to the international process.
However, as far as poor countries can be regarded as less globalised countries, it becomes evident that child labour has nothing in common with globalisation. It cannot be applied to the international influences. The same can be said about the female children’s prostitution in the developing countries.
On the other hand, it must be noted that those poor countries, which domestic conditions (political, social, economical, etc.) are more favourable, have more chances to reduce poverty through globalisation (Srinivasan, 2002).
Generally, one can probably notice that countries have different approaches to globalisation. For instance, China’s attitude to the international process differs from the Western attitude to the concept of the international influence. However, more globalised countries’ higher incomes just prove that globalisation must not be practiced the exact same way.
The issue of globalisation from different perspectives: a brief overview
When discussing the effects of globalisation from the perspectives of the general buyer, one can probably notice that due to the process people are provided with much more goods and services.
Furthermore, the international process affects the pricing policy; for this reason, in most cases the opening price is determined by markets which operate in a global environment. Globalisation gives individuals an opportunity to become familiar with a number of other cultures and experiences.
Most of consumers associate the term with certain radical changes. Of course, the international process affects consumer law in a variety of ways.
Thus, Ronaldo Macedo (2002) points out that the major influences of globalisation on regulation and consumer law involve “changes in the production process and consumption market; transformation from a consumer goods society to a consumer service society, change in the contractual consumer practices and the growth of relational contracts, etc.” (p. 3).
Of course, the influences of globalisation within the perspectives of the general consumer are not limited by the above-mentioned changes. The global economic growth is considered to be a new form of world capitalism; that is why it affects buying attitude in a direct way.
Higher levels of production became possible due to the international process; although such changes in the production process require more financial expenditures. The offer of the standartised goods can be regarded as one of the most common effects the form of the modern capitalism brought about.
Flexible forms of production allow producing goods with unique qualities: as far as buying attitude marks up, higher levels of profitability occur. The flexible form of goods production is a modern industrial technique, which tends to satisfy a variety of consumers’ requirements.
On the other hand, it must be pointed out that the new techniques of production give an opportunity not only to increase the productive capacity, but also to respond to a wide range of alterations in the globalised market in a fast way.
The economic dualism as one of the consequences of globalisation gives an opportunity to combine different consumer markets. Thus, mass consumers along with highly sophisticated ones can satisfy their needs.
When speaking about the effects of globalisation from the perspectives of the company, it becomes evident that the international process can be regarded as the key to competitive advantage.
Of course, the extremely high demands of the modern business world are complicated by globalisation; however, on the other hand, nobody will deny the fact that new business practices appear, technological growth allows reducing the costs of transportation, exchanging of information, etc. Thus, globalisation can be also regarded as a beneficial process in relation to organisations.
Furthermore, it should be noted that the modern business world is deeply interested in globalisation. Thus, capital owners accept globalisation as a business process, which allows making more money. For this reason, the main purpose of a variety of decisions capital owners take is to affect cultural, social and economic approaches of other stakeholders, in favour of the international process.
Most of workers consider the process of globalisation from negative perspectives on the basis of several reasons. Thus, one is to keep in mind that it is workers’ low salary, which is recognised to be one of the major reasons of anti-globalisation positions.
For instance, “a designer jacket may sell for $190 in New York while the worker overseas gets paid 60 cents an hour” (“The Benefits of Globalisation”, n.d.). So, it seems to be evident that there is cheap labour cost, which workers may accept as abnormal.
Despite the fact that globalisation is associated with poverty in developing countries, one is to keep in mind that the supporters of the opinion are totally unfamiliar with the basic points of the international economy; the criticism of the phenomenon is probably related to certain political and economic aspects, but millions of workers go through hardship because of a wide range of domestic problems rather than international influences.
In other words, workers’ ignorance of the issue of globalisation is one of the key reasons of their non-acceptance of the phenomenon.
Most of environmentalists do not consider globalisation as a threat to the environment. On the contrary, the economic stagnation is associated with much more risks as compared with global economic growth.
Moreover, it seems to be evident that global environmental quality improvement is impossible without globalisation processes, as making long-term improvements depends upon the increased income.
Of course, the environment of poor countries is in danger, as there are no resources to implement certain environmental reforms. The fact that globalisation is needed to protect the environment is recognised to be undisputable, as global environmental protection depends upon a variety of economic activities.
Some economists are of the opinion that institutional improvements along with economic growth are needed to resolve a number of contradictions on environmental issues (Mendelsohn, 2003).
The impact of globalisation on domestic policies: a classic example with air pollution
When discussing the impact of globalisation on domestic policies, it is necessary to state that the question is considered to be rather ambiguous.
On the one hand, there is a viewpoint that national policies are greatly determined by the international process; on the other hand, some scientists suppose that globalisation causes no positive or negative outcomes in relation to internal affairs.
Keeping in mind that the global trends can be not only supported, but also neglected by national politics, anti-globalisation activists argue that the global economic growth cannot impact on the national outcomes.
To my mind, anti-globalisation activists’ position is wrong, as the case with environmental pollution shows us how globalisation affects domestic policies. Thus, everybody will accept the fact that environmental problems are of global concern.
For instance, the global character of air pollution is recognised to be “a very suitable indicator for measuring the impact of globalization on national politics” (Jahn 2002).
When analysing the emissions in the OECD-countries, it becomes obvious that national variables are more essential as compared with the international ones; although it should be noted that a variety of international trends are involved into domestic policies.
Despite the fact that national factors seem to be more significant, “a clear positive trend between EU membership and reduction of NOx and CO2 emissions” (Jahn 2002) can be observed. Thus, one can make a conclusion that international factors along with national ones affect domestic policies.
Still, the effect of globalisation on national policy outcomes cannot be rejected, as the investigation, which was conducted on the air-emissions of NOx, CO2, etc. showed the importance of international trends.
When comparing positive and negative attitudes to globalisation, one can probably notice that there are more benefits than harms the global economic growth brings about. Thus, when discussing globalisation from the perspectives of general consumers, environmentalists, workers, and companies, it was proven that the international process offers a variety of opportunities to all parties.
Moreover, the fact that globalisation affects national incomes is also considered to be of great importance, as the fact can be regarded as a proof that the international process is really a major driving force of the modern business world.
The most important argument in favour of globalisation is that “it facilitates an efficient global allocation of savings by channelling financial resources to their most productive uses, thereby increasing economic growth and welfare around the world” (Alfaro et al., 2006).
Of course, there are many other scientists, who consider the international economic integration is a negative way; however, they are unable to argue their viewpoints in a proper way. The international process seems to encourage a wide range of policies that affect people’s life.
It serves the interests of the modern world and facilitates taking decisions. In our days, it is impossible to imagine social, cultural and economic progress without globalisation. It allows greater financial freedom, and therefore, advances people’s living conditions.
Globalisation can be regarded as a natural aspect of capitalism. Competitive advantage the international process stimulates and promotes brings many desirable circumstances to both – the public sphere and the private one. Numerous financial advantages lead to improved financial policies; thus, one can conclude that globalisation contributes to a national prosperity.
Alfaro, L., Kalemli-Ozcan, S., & Volosovych, V. (2006). Capital Flows in a Globalised World: The Role of Policies and Institutions. Hbs.edu . Web.
Angiello, R., & Laguerre, P. (2004). Why Study International Business: The Importance of Globalisation. Bergen.edu. Web.
Jahn, D. (2002). The Impact of Globalisation on Comparative Analysis. Arizona.edu. Web.
Macedo, R. (2002). Globalisation, Regulation and Consumer Law. Yale Law School. Web.
R. (2003). Globalisation and the Environment. Yale.edu . Web.
Srinivasan, T. (2002). Globalisation: Is It Good or Bad? Stanford.edu . Web.
The Benefits of Globalisation. Radford.edu . Web.
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