Globalisation refers to the national economy’s integration with the global economy. It increases the economic, sociocultural, demographic, political, technological, and environmental interdependence of various places worldwide.
International trade, investment, information technology, and a free-market economic system drive globalisation. It has exposed the domestic market to international competition. Through liberalisation and eliminating trade barriers, it has integrated all nations’ economies and created a single global marketplace. Globalization encourages interdependence between nations because it implies that no single nation can provide all the goods and services it requires on its own.
Global organisations such as the World Trade Organization (WTO), International Monetary Fund (IMF), European Union (EU), and World Bank (WB), among others, and information technology promote globalisation. It transforms a local occurrence into a global occurrence.
Types (Forms) of Globalization
The expansion of globally interconnected markets for commodities, services, capital, and finance characterizes economic globalisation. The globalisation of the economy incorporates liberalization, deregulation, privatization, and cheaper transportation and communication.
Deregulation of foreign exchange resulting in the complete convertibility of money and delicensing of merchandise trade are two additional policies that have helped to initiate and speed up the process. Under WTO rules, the global system for removing barriers to foreign exchange and trade has flourished. The proliferation of multinational corporations has exacerbated this trend.
Political globalisation refers to the growing interconnectedness of political systems and institutions around the world. It is a process that has been in motion for centuries but has accelerated rapidly in recent decades due to advances in communication technologies and increased international trade. Political globalisation is often seen as part of a broader trend towards economic globalisation, with the two processes reinforcing each other.
At its core, political globalisation involves the transfer of power and authority from nation-states to supranational organisations such as the United Nations, World Trade Organisation or International Criminal Court. This is reflected in the increasing importance of international law and norms governing issues ranging from trade to human rights. At the same time, however, political globalisation also creates new challenges for states as they seek to balance their own interests with those of an increasingly complex and interdependent world.
It’s a more multifaceted, reflecting, and refracted phenomenon. It is occurring due to the global absorption of cultural values, beliefs, and customs via communication technologies, media, tourism, consumer habits, and the international flow of ideas.
Mutual understanding, peaceful coexistence, and learning from one another are all implications of cultural globalization. Tattoos on the exposed regions of the body are becoming increasingly popular around the world.
Environmental globalisation entails deepening, widening, and intensifying international networks, increasing global connectivity and consistency in routine environmental management procedures.
The benefits of environmentally friendly technologies and practices can be extended from industrialized to poor nations with the aid of globalization.
The importation of greener technologies or the development of improved environmental legislation and standards can reduce pollution in developing countries. However, there is disagreement about the extent to which the beneficial effects of globalization might be generalized to assist developing countries in becoming more pollution-efficient, that is, to produce fewer emissions relative to gross domestic product. (GDP).
Technology has brought the world even closer together. Science, information communication, and entertainment technologies have all witnessed enormous advancements worldwide. Production, operations, and communications technology established in one region of the world become insanely globalized and used in other parts.
Effects of Globalisation
Growth in Trade
Globalisation has made international trade more accessible. International trade barriers have significantly decreased as a result of the globalized strategy. Both the volume of imports and exports has increased. Additionally, it makes the corporate environment more competitive. High-quality goods and services can be produced. The importance of trade to the economy is growing. For the purpose of facilitating international trade, the World Trade Organization (WTO) was founded.
There is intense competition among corporate firms as a result of globalization. Ultimately, it helps raise the calibre of goods and services. Businesses at the national level should compete with those abroad. They need to raise the calibre of their goods if they want to increase customer satisfaction and stay competitive. In such a case, customer dominance is upheld.
Foreign Direct Investments (FDIs)
The outcome of globalisation is a rise in foreign direct investment. Capital can move from industrialized to developing and underdeveloped nations thanks to the countries’ liberalized economic policies. These nations are also acquiring management methods in addition to technology. The economic prosperity of emerging and impoverished nations has traditionally been based on foreign direct investment (FDI).
One of the most significant effects of globalisation is increased international cooperation between nations. As countries become more intertwined through trade and commerce, they are often forced to work together on issues that affect them both.
For example, environmental concerns such as climate change know no borders – every country is affected by it in some way or another. Therefore, countries must cooperate with each other to address these issues effectively. Furthermore, globalisation allows for knowledge sharing between countries which can lead to technological advancements that bring benefits worldwide.