It is an elimination of barriers to trade, communication, and cultural exchange. The theory behind globalization is that worldwide openness will promote the inherent wealth of all nations.
The concept of the globalization is not new. Globalization has its origin in the past long time. Globalization can be defined as the process of international integration arising from the exchange of world views, products, ideas, and other aspects of culture either for the money or something else in exchange. In simple terms, globalization refers to a process that promotes world-wide exchanges of national as well as cultural resources and crafts. Globalization is rising at a rapid in most of the developing countries of the world and the advances in the field of transportation, telecommunications infrastructure, including the rise of the Internet, are major key factors that are supporting the growth of the globalization culture, generating further interdependence of economic and cultural activities.
The concept of globalization is a simple one, for example, if there is a farmer who has an excellent yield of apples. His apples are really juicy, red, tasty and big in size. He knows that selling these in the local market would fetch him a reasonable amount, but if he decides to sell his product in the international market, he would be paid even higher amounts. So obviously the farmer would go for higher prices and sell it in the international market at some place where the yield of apple is not much. This is globalization.
As stated earlier, the concept of the globalization is not new, concept of globalisation was first introduced by Adam Smith, the father of modern economics in the year 1776 through the book titled, “Wealth of the Nations”, and since then the globalisation has seen some real expansion in terms of quality as well as quantity and many nations have entered the world of globalization and are playing an important role in the international market today.
Advantages of Globalization
Creates Employment: One of the most crucial advantages of globalization is that it has led to the generation of numerous employment opportunities in some of the developing countries of the world and also a lot in our country. With the impact of globalization, a lot of companies are moving towards the developing countries to acquire the labor force that is provided at some reasonable rates without compromising the quality of the work. This obviously caters to employment and income generation to the people in the host country. Also, with this thing, the migration of people has become a lot easier and this has led to better jobs opportunities in various developing countries of the world.
Competitive Prices: With the growth of globalization, it has also led to controlling the price of some big brands. Globalization has brought in a tough competition in the markets. There were times when there were a few brands that would rule the market since there are varied products to select from, the producer can sustain only when the product is competitively priced. With the globalization, there are a lot of options available for the customer, there is every possibility that a customer may switch over to another producer if the product is priced very high. Globalization has made the customer the king and hence can dictate the terms to a very large extent. Therefore, globalization has led to affordable pricing that has benefited the consumer in a great way.
Improved Training and Education: Globalization has led to some significant improvements in the terms of training as well as education. A very critical advantage can be termed as the spread of education in which globalization has played a major role. Globalization has reduced international barriers and with numerous educational institutions around the globe, there is a great option that one can move out from the home country for better opportunities elsewhere in the world. This has led to the integration of different cultures and meeting and learning from various people through the medium of education. Developing countries around the world or labor-intensive countries have benefited the most out of the globalization.
GDP Increase: Gross Domestic Product, commonly known as GDP, is the money value of the final goods and services produced within the domestic territory of the country during an accounting year. Globalization has played a crucial role in improving GDP of different countries of the world and especially India. As the market has widened due to the entry of some global giants, the scope, as well as demand for a product, has also increased. A lot of international giants enter local markets and start production according to the local needs leading to the financial gain as well as enhancing the GDP of the country. GDP of India has increased twice as much as before.
Disadvantages of Globalization
Uneven Distribution of Wealth: With the globalization, it is a major disadvantage that it has led to huge unevenness of income in society. It would not be wrong to say that the rich are getting richer while the poor are getting poorer. In the real sense, globalization has not been able to reduce poverty but it has only led to the transfer of the poverty. Instead, it has led to the accumulation of wealth and power in the hands of a few developed economies. Therefore, the gap between the elite and the underprivileged seems to be a never-ending road, eventually leading to inequality.
Health Concerns: With the globalization has also increased interaction among different cultures and people with different habit and past. Globalization has given rise to more health risks and presents new threats and challenges for epidemics. The greatest example can be the spread of the HIV/AIDS virus as well as the swine flu virus. HIV having its origin in the wilderness of Africa continent but the virus has spread throughout the globe within no time. Food items are also transported to various countries, and this is a matter of concern, especially in case of perishable items. The safety regulations and the standards of food preparation are different in different countries, which may pose a great risk to potential health hazards. Also, interaction with different habit and cultures have given rise to some health differences among races.
Environment Degradation of a Particular Place: It is a fact that globalization has also led to the accumulation of some key role-players and industries in some of the developing parts of the world. The industrial revolution has changed the outlook of the economy. Industries that are being set up are using natural resources by means of mining, drilling, etc. which puts a burden on the environment. Also, there are some regions turning out to be industrial centers where a lot of industrial set up are coming, which has led to the concentration of this industrial effect at one place leading to a lot of environmental hazards at some parts. Natural resources are depleting and are on the verge of becoming extinct. Deforestation is also being practiced recklessly owing to the non-availability of land, thereby drastically reducing the forest cover.
Creating Monopoly: Globalization has also led to the monopoly of some big companies. Monopoly in the terms of the market is a situation wherein only one seller has a say in a particular product or products. With the globalization, it is possible that when a product is a leader in its field, the company may begin to exploit the consumers, as there is no close competitor, the leader takes full advantage of the sale of its product, which may later lead to illegal and unethical practices being followed. Monopoly is disastrous as it widens the gap between the developed and developing countries.
For people in the richer countries, the information revolution is helping forge a greater sense of global community and transnational solidarity, as seen in the explosive growth of global coalitions of non-State actors around issues of universal concern such as globalization itself, the environment, human rights, humanitarian aid and labour exploitation.