Definition of Globalization
Globalization entails the developing interconnection of world economies, cultures, and people. This interconnection has been triggered by the border-to-border exchange of goods and services, innovation, individuals, and streams of investment (Price et al. 9). Since globalization involves individuals and businesses’ interconnectivity, it leads to worldwide cultural, political, and economic consolidation. Over the last century, globalization has massively accelerated due to innovations. However, globalization is helpful universally, but it may harm specific groups in society.
Advantages of Globalization
One of the key advantages of globalization is that it increases business competition. Enterprises that participate in the international market are probable to face competition from corporations around the globe. Since buyers continually demand high-quality and cost-friendly products, they have a versatile collection of companies to choose from with globalization (Price et al. 16). This demand thus makes competition rise, given that consumers will go for high-quality products and those that adequately fulfill their needs. The enhanced competition thus prompts companies to keep up with innovative developments and stay positive to endure the competitive global marketplace. Additionally, with intensified competition, prices are more likely to drop since most companies will struggle to accrue a sizeable global customer base by plummeting the prices of their products. However, some nations may influence their currencies to acquire a price benefit, and reducing costs may not work.
The second advantage of globalization is that it leads to an increased flow of capital. Globalization steers increased trade in select and diverse markets hence occasioning better proceeds and high gross domestic product (GDP). Since globalization, the world GDP has excessively risen owing to economic interconnectedness and improved global trade. As a result of globalization, enterprises can appreciate more significant proceeds by venturing into new markets, benefiting from lesser local charges. The extension of businesses into novel nations enables businesses to stretch to needs that are ready for their latest products and eager to pay for the products. This extension thus allows these businesses to attain higher profits in unsaturated markets as they save money through a lesser cost structure that ensues due to inexpensive supplies, fees, and manual labor.
The third advantage of globalization is that it boosts technological development and ideas. Through globalization, nations can obtain access to overseas knowledge and ideas. The enhanced competition resulting from globalization supports incentives to adopt novel technologies and advances and implementation of foreign technologies. Additionally, globalization has improved the pace of technological dispersion (Price et al. 16). The cross-border high-tech transfer has thus increased the local production levels in developing and advanced economies and enabled a partial restructuring of the innovation scene. With new technologies, corporations can produce goods more resourcefully and with little human labor hence making the goods inexpensive and accordingly scaling up faster.
Disadvantages of Globalization
One of the main drawbacks of globalization is that it pilots unequal economic growth. Globalization is believed to increase the economic growth for many nations, but the transition is not equivalent in all countries. In most cases, the wealthy republics tend to benefit more than those countries which are still evolving. Globalization upsurges disparity through the impacts of increasing specialty and trade. An upsurge in trade to GDP ratios implies an expansion in the volume and worth of trade between nations and regions. Furthermore, globalization acts as the source of inequality whereby unskilled jobs are transferred from the wealthier countries to the poorer republics (Price et al. 16). This disparity thus leads to uneven income distribution, intensifying the gap between the rich and the less privileged, increasing economic inequality within countries.
The second disadvantage of globalization is that it pilots over-exploitation of resources. Globalization leads to an upsurge in universal consumer demand, which spurs an increase in production to satisfy demand. The improved output implies increased pressure on the environment and hence hasty exhaustion of natural resources. Additionally, the distance a product travels, the more fuel it consumes, and a greater level of greenhouse gas releases impact the environment. The gas releases contribute to pollution, ocean acidification, and climate change universally hence influencing biodiversity. Furthermore, globalization decreases the viability of ecosystems and their vital services. Lack of local operative institutions exposes the resources to the danger of manipulation and feed international markets.
The third disadvantage of globalization is that it leads to an escalation in economic vulnerability. Globalization has led to the creation of job opportunities that have enhanced living standards (Price et al. 16). However, it has also led to increased income disparity and higher susceptibility in most countries, influencing the configuration of labor markets. The manipulation of inexpensive labor markets enables companies to increase jobs and economic openings in evolving republics because labor is low-priced. Conversely, the economic growth in these nations tends to be stagnant. Additionally, when the nation’s financial schemes become codependent, the probability of worldwide recession upsurges intensely. This recession occurs because if a nation’s economy starts to struggle, this generates a series that impacts the other countries concurrently, triggering a universal financial disaster.
How COVID-19 will Impact Globalization in Future
In my view, COVID-19 has impacted and will continue to impact globalization in the future. The magnitudes of a pandemic are delineated mainly by the death rate, the impact on day-to-day livelihood, and the economy. Globalization, therefore, hastens losses due to outlays. The COVID-19 pandemic has and is projected to affect the economies of various countries in terms of demand and supply. Consumers and stockholders may lose confidence in marketplaces that have been adversely affected by the pandemic, which will lower the market’s direction. Additionally, the pandemic will slow down the affected nations’ economic growth, hence triggering a decrease in trade and an upsurge in poverty. The pandemic is also estimated to lead to a labor force decrease, leading pilots to a noteworthy decline in human and economic capital. The pandemic has and will continue to impact the worldwide economy in rapports of movement, business, travel, and universal health. Since the onset of the COVID-19 pandemic, travel, movement regulations, lockdown of economies, and local business have been regulated.
All these aspects are believed to have halted globalization and are expected to persist in the future. With all these restrictions, the COVID-19 pandemic has and will continue to impact the airline and shipping activities which will prime to loss of income, interruption of international trading, and destruction of the tourism industry. Furthermore, the elimination of events has highly affected the world economy. Ideally, the consequential impact on the labor force, consumer behavior, and supply chain is observed as a dropping sequence of events that have and will continue to halt the world economy in the coming years. Therefore, the COVID-19 pandemic is expected to impact the global economy due to interruption of international trading, and it will also affect the supply and demand hence halting globalization. These will aggravate inequalities between the underprivileged and the wealthy and the low and high-income countries.
Price, Marie et al. Globalization and Diversity: Geography of a Changing World. 6th ed., Pearson, 2019.