Meaning Of Globalisation
Globalisation refers to the free movement of products, services and people all around the globe in an integrated and seamless manner. It is defined as process through which businesses or other enterprises start operating on an international scale. In simple terms, the globalization means open flow of goods, technology, and information among consumers from distinct countries. Globalisation of an economy opens it for world market such that there are no barriers in doing trade and transactions internationally. It shows that country is interacting related to production, trading and financial transactions with industrially developed nations of the world.
The term ‘Globalisation’ carries four parameters: –
- Allowing open movement of goods via removing and reducing barrier in between the countries.
- Permitting free flow in transfer of technology.
- Developing environment for flow of capital among countries.
- Creating environment for free movement of labour in between countries of world.
Each of these 4 components are very crucial in achieving the smooth path of globalisation.
Positive Effects Of Globalisation
Various positive effects of globalisation are well-discussed in points given below: –
Transfer of technology:
The transfer of technology on global level results in alteration of technology which is a good sign. Any country can easily borrow technology from other developed countries via agreement and can implement within their areas for overall development. Communication can be easily established with anyone around the globe by utilizing the advanced technology at lower cost, minimal efforts and time.
Standardization of Living:
People’s standard of living has changed largely with the emergence of globalization. The process of globalization via integrating the economies help nations in fighting against poverty and improving the standard of living of their peoples. It is proven by many researches that countries open to global trade have faster rate of economic growth and their living standards also tend to increase.
The process of globalization provide access to high quality products at affordable prices. With the availability of latest technology, countries are able to provide better products to their countrymen at affordable prices. Globalization encourages high competition in domestic sectors due to which companies reduce price for their products or follow a penetration price strategy.
It also plays an efficient role in improving the employment opportunities in nations. The setting up of special economic zones across distinct parts of nation have raised the number of jobs available worldwide. Numerous export processing units have been established all over the world that helps in employing large number of peoples. Many multinational corporations of west are providing employment opportunities to peoples via outsourcing employees from different parts of world.
Better services and GDP growth rate:
The process of globalization always offer better services to people. With the help of technological advancement, various services such as water supply, internet, electricity supply, mobile networking and any other services have become much easier and better than before. The easy accessibility to internet services around the globe is also the outcome of globalization. It also ensures the participation of each nation in uplifting the GDP growth of world.
Improvement of infrastructure:
Globalisation facilitates the development of infrastructure facilities within the countries as they can easily import required technology from developed nations. The governments are also able to deliver their peoples the services more efficiently owing to infrastructural advancement. Development of infrastructure means the overall development of respective nations, thereby making them more enabling to offer services to people. It is worth mentioning that evolution of infrastructure and the economic growth are harmonious with one another towards the development of country.
Foreign exchange reserves:
It assists countries to earn large amount of foreign exchange reserves. Globalisation promote international trade in between countries such that distinct countries engage in buying and selling goods with one another. They do financial transaction in foreign currencies which results in both inflow and outflow of foreign exchange reserve. There is a constant capital flow in international financial flows with the help of globalisation. This flow of capital enables countries in building up the foreign exchange reserves.
Globalisation leads to economic growth of countries by opening free flow of good/services in between the nations. It entails the efficient utilization of resources wherein surplus resources are exported and deficit resources are procured from other nations. Globalisation increases the international exchange of products, information and technological advances that ultimately leads to economic development for any country taking part in global economy. Rise in economic growth means better living standards, higher wealth and incomes, and often less poverty in a country, -in short, it denotes the overall well-being of country.
Extensions of market:
Above all, the process of globalisation promotes extension of market all over the globe. For example, businesses may witness saturation of their product’s demand domestically, but through globalization the domestic companies can sell their products in foreign countries where demand is growing increasingly. Low demand for product in one country can be easily tackled with high demand in another countries via globalisation.
Access to New Talent:
The globalisation in addition to new markets, enable businesses in finding out new and specialized talent that is not present in their nearby market. Companies have an option to bring in more talented workers from overseas. For example, globalization allow businesses to explore tech talent in booming markets such as Stockholm or Berlin, rather than Silicon Valley. Also, international PEO enable companies in employing workers overseas without having the need to establish legal entity, making the process of global hiring much easier.