is a complex but controversial phenomenon in the modern world. Itrefers to the integration and increased cooperation betweeneconomies, nations and societies around the world. Due to thenumerous impacts on all aspects of life, globalization is center ofdebates today. The advancement of communication and transporttechnology has resulted into increased interdependence among nationsand societies (Narasaiah, 2010). Due to globalization, a Mexicanliving in Germany can communicate with a friend in Australia, eatChinese food, drive an American car, dress in Brazilian dress and goon vacation in South Africa. There are numerous social, economic andcultural benefits that are associated with globalization.
Thereare numerous benefits that the modern society can derive fromglobalization. The advantages that are associated with globalizationhave made it inevitable for any human society to exist in isolationin the modern society. results into social, economic,political and cultural development in a society. Although thebenefits of globalization are not uniform, every one in the globalsociety gains some benefits from the integration of social, politicaland economic systems. According to advocates of globalization,otherwise know as globalists, the steady economic development thathave been experienced in different parts of the world in the last onecentury can be attributed to increased integration of economicsystems around the world (Dollar, 2008). As a result, globalizationis believed to be the most important factor that contributes toeconomic growth. has resulted into increased variety ofgoods and services in the local market. Additionally, integration ofeconomic systems has enabled counties to produce more than the localmarket demand because they have access to international markets. As aresult, export and imports have become very essential in thedevelopment of any economy. This is because it enables human societyaccess what they can produce and have market for their surplusproducts. Without globalization, mass exportation of goods andservices would not be possible. The increased demand for locallyproduced goods and increased supply of goods from overseas hascreated a more efficient and effective market. This has a directimpact on the level of unemployment and poverty, as well asgeneration of wealth (Narasaiah, 2010).
Theincreased global trade as a result of globalization has an importantimpact on the financial system in the world. Through globalization,the financial systems become more interdependent. Although there aresome risks associated with an interlinked financial system, mainlybecause a major problem in one nation is likely to affect othernations, there are more benefits associated with it. Because of thefact that in a globalised economy the activities in one country islikely to affect other countries, challenges facing a single economyor financial system is able to attract divergent solutions and ideas.Through mutual approach to the challenges, it is easier to tacklelocal and international challenges facing the economies. For example,globalization has created organizations such as the World Bank andIMF among others which regulates the global financial systems(Dollar, 2008).
Competitionbetween economies and business entities is one of the most importantbenefits associated with globalization. Due to globalization, thereis an increased variety of goods and services. resultsinto free trade, increased imports and exports and business processoutsourcing. As a result, business organizations are no longercompeting locally, but internationally. This has an impact on thequality of goods and services available in the market. Additionally,due to globalization, there is an increased competition betweeneconomies. For example, the ability of an economy to attractinvestors is an important factor that affects economic growth in acountry. On the other hand, due to free market, investors canestablish manufacturing entities in any part of the world. Economiesare competing at the global scene to provide the best incentives forinvestors. This has numerous benefits to the business community(Dollar, 2008). For example, majority of multinationals in the moderneconomy are relocating their production to countries such as Chinadue to these incentives.
has also increased economic stability due to interdependence ofeconomies. In the modern global world, economies do not operate inisolation. What happens in the Chinese economy has an impact on theAmerican economy. As a result, challenges in a struggling economy canbe cushioned by other economies in the world. For example, in aglobalised economy, a reduction in demand for consumer goods isunlikely to result into closure of production units because they areable to access markets overseas. On the other hand, consumers areassured of a steady supply of goods and services even when localmanufacturers are unable to produce (Narasaiah, 2010).
Otherbenefits of globalization include increased division of labor andspecialization where business organizations and economies are able toconcentrate on what they can do best. For example, a manufacturingeconomy can specialize in manufacturing since it is assured to steadysupply of agricultural products. enables businessorganizations to access foreign market. This enables theseorganizations to produce in large scale resulting into economies ofscale. The increased competition at the local level eliminatesmonopolies and promotes innovation and development resulting intoincreased efficiency (Narasaiah, 2010).
Inconclusion, both small and large economies are likely to benefit fromglobalization. is becoming inevitable in the modernworld. Although majority of the benefits of globalization areeconomic and business related benefits, there are social, culturaland political benefits. Additionally, there are some problems andchallenges that are attributed to the globalization phenomenon.
Dollar,D. (2008). , growth, and poverty: building aninclusive world economy. Washington, DC: World Bank.
Narasaiah,M. (2010). Globalisation and economic, New Delhi: DiscoveryPub. House.