Introduction to Globalization Globalization - the term has become a common and frequently used one. The recent fast interconnectivity within the country and across countries has to lead to the global economy. Globalization is the process by which economical, political, social and cultural aspects are integrated and by which the businesses and organizations develop on an international scale. Globalization is the process wherein the economic systems expand from regions to international encompasses the entire world. On the global front, all the areas are integrated with technological advancements through communication.
Importance of Globalization Globalization involves the movement and exchange of services and goods, capital, human and production resources, capital across the globe at a rapid pace. Globalization promotes interactions between different regions and masses across the world. This has lead to the removal of cultural differences between countries and enabled for movement and communications easily to conduct business. Globalization brings about the free flow of raw materials and manufactured goods in the economic system. Intellectual property and financial transactions also happen between the countries. Globalization has led to an improved lifestyle and has paved the way for the development of better transportation, improved healthcare systems, and education for children. The fast developments in the technology have increased the trade and travel services, communication and wide dissemination of information through media and entertainments.
Globalization has also led to mass immigration of people across the globe to live, for work and for education. Travelling has enabled people to explore other places and experience across cultures. At the click of the mouse and in seconds, negotiations are made and money transactions take place. To keep up the pace at the international market the companies have become competitive in business and thus being more productive and raising the bar of goods quality and services. The areas of investment and banking sectors have taken different forms and are digitalized and there is increased imports and export of goods. Developed countries have ventured their business operations in developing countries for low-cost labour and resources. The outsourcing of business helps poorer countries get an inflow of cash.
Globalization has brought in the economic progress of our country and has improved the standard of living of the people. Many international companies that have been set up in our country have helped in economic development and created job opportunities or the people. Globalization made it possible for people to listen to the music of the same type, explore the foods, dresses of different countries, and in exchanges of ideas, in all areas of knowledge sharing. With the communications being at the tick of the clock, the world has become small and people are able to learn new languages and experience cultures. The electronics, automobiles and clothing of different countries have made a mark in the international markets through globalization. Scientific developments are made through join programs and computer technology has brought in cashless transactions.
Components of Globalization There are four components of Globalization:
1. Globalization of markets- It is the process of integration and merging of distinct world markets into a single market. This process enables cultural drift towards the product or service usage in common. The reasons for this globalization include factors like - many small-sized companies opted for international markets as they could not produce on a large scale, the domestic companies are unable to meet the demands of the consumers, and some companies go for overseas to make profits and to achieve their set goals. For some companies, home environs are suitable for their business.
2. Globalization of production- Here the firm fragments their operations internationally to ensure minimum cost and transmits the ideas for making products in new ways. The reasons for the globalization of products include the availability of raw materials, the reduced cost low cost of production, cheap labour cost and logistic management.
3. Globalization of investment- It includes the investment of capital by a global company in any part of the globe. The reasons for the globalization of investment covers the aspects of increased globalization of trade, the attraction of direct investment, limitation of exports promotions of global companies to invest in foreign countries, the rules and regulations favouring the investments.
4. Globalization of technology- It is the spread of technology across the borders. The reason for the globalization of technology includes the improved capacity to produce, ensuring of high quality of products, meeting the global demand and flexibility of operations.
Advantages of Globalization The advantages include the free flow of capital from one country to another and the free flow of technology. It has lead to an increase in industries and helped in the spread of production know-how. The production has increased with the high quality of products with fewer prices. Due to the growth of industries the people of developing countries have enhanced the skills and in exploring the creativity in varied fields. Globalization has improved standard of life due to reduced prices and increased in the prosperity of the country and the world over. Globalization has brought in cultural exchanges and also resulted in demand for product varieties. Innovations in seen in every aspect of the field be it science, technology, communications, transportation, hospitality sectors etc.
Disadvantages of Globalization The disadvantages are that the domestic businesses are hampered, human resources are exploited, labour and environment laws are violated and it leads to underemployment. Increased industrial production has threatened the climatic conditions and renewable and non-renewable resources are getting exhausted due to free global trade. The natural resources of the country are transported to other countries. The national companies are taken over by foreign firms and the multinational companies have staged a global dominance. The traditional products are replaced by modern products. A huge gap is built between the rich and the poor. Healthcare is deteriorating and has brought in epidemic and pandemic diseases due to fast transportation systems. The health and safety of the people in the workplace. The western culture has influenced in varied areas of sectors such as traditions and customs and market trends. The poor have suffered due to the advent of multinational companies in all areas of services. Closure of small scale industries has given rise to unemployment and also brought in ecological concerns on the planet.
Impact of Globalization in India The advent of international companies has led to job opportunities, and choice for consumer products availability increased. There is a wide range of consumer products that are available in the markets. People working in foreign companies have a high lifestyle living. Improved standard of living has resulted in changed food habits and there is increased demand for rich food. Western cultures are evading the local traditions and customs. Indian cuisines have become popular at the global level; Western food has become a favourite for the local people. The joint family system is disintegrating. Internet facility has reached the rural areas; food chains have found a huge market across the country. Expensive shopping malls and high rise buildings have emerged. Entertainment and software companies have boomed worldwide. Instant communication has reached each and every individual in the country and coaching classes for varied courses have boomed. All said here we should not forget that we need to preserve the rich culture and traditions of our country.
Thank you Swati for reading the article, the rapid advancement in the field of technology and communications has made people and companies interactions more and also there is growing interdependence of the economics of all the countries. Yes, we have to look out for a positive approach for uplifting the living standard of people and to generate employment for more and more people of our country.