Analysing the 4 core elements of globalisation: economic, politial, cultural, technological
1. Economic
Pros:
- global trade and FDI improve job opportunities, productivity and living standards in developing countries
- better division of labour and the right conditions for companies to exploit greater economies of scale
- expansion of MNCs creates job opportunities in the poor countries
- More competition leads to innovation and better product focus
- Countries can exploit their comparative advantage (eg. China exports to Europe but in return seeks infrastructure and engineering developed European countries).
Cons:
- Open market is subject to deregulation or lack of regulation
- Quick wealth in developing countries leads to social inequality (a fast growing gap between the rich and the poor)
- More competition: local businesses can go down not able to compete with MNCs by price or product
- Increased competition from low-wage countries may impact jobs in richer nations: eg. factories and R&D relocating from Europe to Asia (unless governments identify new areas of comparative advantage and create new job opportunities)
- as above: there may be a “race to the bottom” as countries compete by reducing wages, taxes, welfare and environmental controls
- Pressure to compete may damage the ability of local governments to set their own economic policies
- increased risk of financial market instability
2. Political
Pros:
- freedom of speech, more transparency in politics (= “global civil society”)
- pressure on local governments from world organisations > improved human rights (eg. the rise of trade unions in China or issues on women’s rights in the Middle East)
Cons:
- too much pressure on local governments from world organisations or superpowers
- potential of undermined national sovereignty and the ability of states to determine their own affairs
3. Cultural
Pros:
- Global and ‘real-time’ outreach of culture > global culture
- Improved understanding and respect of different cultures
Cons:
- Loss of ethnic and minority cultures
4. Technological
Pros:
- Wider and quicker spread of innovation
- Global telecommunications and transport links
- ‘Real-time’ news
- Ease of travel: better understanding and respect for other cultures
Cons:
- IP rights protection
- Subjective media coverage: contributes to cultural gaps and misunderstanding (eg. the perception on Islamic terrorism and the UK and the US)
Here's an interesting article...
Globalization
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