Advantages and disadvantages of globalisation
This article aims to identify and explain some of the advantages and disadvantages of globalisation. Globalisation is an important concept in today’s world. It is a phenomenon that has weaved its way into every society, culture, and economy around the world. It is a complex process that has emerged over a long period of time, driven by advancements in technology, transportation, communication, and international trade.
What is globalisation?
According to Global Business, cited in Cote (2021) globalisation refers to the increase in the flow of goods, services, capital, people, and ideas across international boundaries. It is the shift toward a more integrated and interdependent world economy.
According to BBC (2023) globalisation is the process by which the entire world is becoming more and more interconnected because of immensely increased trade and cultural exchange. At its core, it is about the free movement of people, goods, services, and information across borders.
There is no doubt that the world is rapidly moving toward an interconnected economic system. However, it is worth mentioning that globalisation is not without some pitfalls. While most people around the world support it, there are many who question its ‘charisma’ as well. Therefore, it is important to examine the pros and cons of globalisation before drawing any conclusions.
Advantages of globalisation (Benefits of globalisation)
Similar needs and desires
Let us imagine a pair of jeans in an American fashion retailer with a ‘made in Bangladesh’, ‘made in China’ or ‘made in Turkey’ tag inside. Let us also visualise Indians enjoying burgers of McDonald’s in India. How does it look like when we see people being very emotional having watched one of the most successful Hollywood movies ever in history, Titanic?
The examples above demonstrate the power of globalisation. People around the world have similar needs and desires which encourage companies to make their products and services available where people are!
Making the world a better place
Many people believe that globalisation has the potential to make the world a better and more just place. Interacting with people from different parts of the world provides everyone with an opportunity to understand different cultures. It also helps them understand human problems from different perspectives. By collaborating and sharing resources, countries can solve problems that affect people around the world.
Increases in demand
Trading with different countries help businesses increase demand for their products and services and explore better supply chains. It is therefore not surprising to see that many companies such as Walmart, Gap, Primark, Zara, H&M, and J.C. Penney produce their merchandise in Bangladesh. In fact, many fashion retailers produce their merchandise in countries such as Bangladesh, Pakistan, India, China, Turkey, and Mexico.
One of the biggest benefits of globalisation is speedy travel and less restriction on human movement. This is useful for companies as they can hire talent from a large pool of applicants. Likewise, globalisation has helped many businesses keep their operations open 24/7. For instance, while a business day is over in the UK, a new business day begins in other parts of the world.
Customers paying less!
As multinational companies are operating around the world, they face fierce competition constantly. This pushes them often to reduce the prices of their products and services, which ultimately results in customers paying less. This also forces companies to develop and use cutting-edge technologies to stay ahead of competition.
Globalisation has spurred economic growth, improved living standards, and expanded access to goods and services. By facilitating the free movement of goods, services, and capital, it has opened new markets, driving competition and innovation.
Disadvantages of globalisation (Challenges of globalisation)
Less benefits for developing nations
Poor and developing countries often find it difficult to compete with developed countries due to their lack of technology, knowledge, skilled labour, and other factors. Therefore, many analysts argue that globalisation benefits developed nations more than developing ones.
Job losses in home countries
Due to globalisation, many multinationals spread their operations at optimal locations around the world. This helps them reduce costs of production; however, this also leads to job losses in home country. Likewise, they also sometimes try to justify lower wages at home.
Transfer of diseases
Free movement of people may be a cause of transfer of contagious diseases. Travelling helps infectious diseases to spread from one place to another.
Globalisation is often accused of causing brain drain which refers to the situation in which large numbers of educated and very skilled people leave their own country to live and work in another one where pay and conditions are better (Cambridge Dictionary, 2023). It is often seen that developing nations struggle to keep their skilled workers at home who are attracted by better and higher incentives elsewhere.
Many environmental activists and analysts argue that globalisation impacts on the environment badly. Globalisation promotes consumption of goods which necessitates transportation of raw materials and end products from one place to another. This contributes to noise, air, and water pollution.
Globalisation has also been accused of promoting cultural homogenisation, diluting local cultures and languages. Critics argue that the dominance of Western culture and corporations has led to a loss of cultural diversity and identity. This has sparked debates about cultural imperialism and the need for cultural preservation.
The future of globalisation: predictions and possibilities
The future of globalisation is uncertain and full of possibilities. Some predict that it will continue to deepen, driven by further advances in technology and the continued liberalisation of trade and investment. They foresee a more integrated and interconnected world, marked by the free flow of goods, services, people, and ideas.
Others foresee a backlash against globalisation, fuelled by rising nationalism, protectionism, and anti-globalisation sentiments. They warn of a retreat from it, leading to a shift towards regionalism or bilateralism. The UK coming out of the EU, and new members joining BRICS are sending mixed messages. It is worth noting that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the UAE have been recently invited to join the BRICS block.
Regardless of the trajectory, the future of globalisation will be shaped by how countries address its challenges and capitalise on its opportunities. It will depend on their ability to foster inclusive and sustainable globalisation, balancing economic growth with social equity, cultural diversity, and environmental sustainability.
Conclusion: Advantages and disadvantages of globalisation
To sum-up, globalisation is a powerful force that has transformed the world in profound ways. It has brought about numerous benefits, from economic growth and cultural exchange to technological advancements and global cooperation. However, it has also presented significant challenges, from economic disparities and job losses in home countries to political tensions and environmental degradation.
We hope the article ‘Advantages and disadvantages of globalisation’ has been helpful. You may also like reading What are the driving forces behind globalisation and Advantages and disadvantages of franchising. Other relevant articles for you are:
Last update: 31 August 2023
BBC (2023) Globalisation, available at: https://www.bbc.co.uk/bitesize/guides/zxm3srd/revision/1 (accessed 30 August 2023)
Cambridge Dictionary (2023) Brain Drain, available at: https://dictionary.cambridge.org/dictionary/english/brain-drain (accessed 31 August 2023)
Cote, C. (2021) What is globalisation in business, available at: https://online.hbs.edu/blog/post/what-is-globalization-in-business (accessed 31 August 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.