There has always been a sharing of goods, services, knowledge and cultures between people and countries, but in recent years improved technologies and a reduction of barriers means the speed of exchange is much faster. Globalisation provides opportunities and challenges.
Bigger markets can mean bigger profits which leads to greater wealth for investing in development and reducing poverty in many countries. Weak domestic policies, institutions and infrastructure and trade barriers can restrict a country's ability to take advantages of the changes. Each country makes decisions and policies that position them to maximise the benefits and minimise the challenges presented by globalisation.
The issues and perceived effects of globalisation excite strong feelings, tempting people to regard it in terms of black and white, when in fact globalisation is an extremely complex web of many things.
Globalization refers to increasing global connectivity, integration and interdependence in the economic, social, technological, cultural, political, and ecological spheres. Globalization is an umbrella term and is perhaps best understood as a unitary process inclusive of many sub-processes (such as enhanced economic interdependence, increased cultural influence, rapid advances of information technology, and novel governance and geopolitical challenges) that are increasingly binding people and the biosphere more tightly into one global system.
There are several definitions and all usually mention the increasing connectivity of economies and ways of life across the world. The Encyclopedia Britannica says that globalization is the "process by which the experience of everyday life ... is becoming standardized around the world." While some scholars and observers of globalization stress convergence of patterns of production and consumption and a resulting homogenization of culture, others stress that globalization has the potential to take many diverse forms.
In economics, globalization is the convergence of prices, products, wages, rates of interest and profits towards developed country norms. Globalization of the economy depends on the role of human migration, international trade, movement of capital, and integration of financial markets. The International Monetary Fund notes the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions, free international capital flows, and more rapid and widespread diffusion of technology. Theodore Levitt is usually credited with globalization's first use in an economic context.
Globalization has various aspects which affect the world in several different ways such as:
• Industrial (alias trans nationalization) - emergence of worldwide production markets and broader access to a range of goods for consumers and companies
• Financial - emergence of worldwide financial markets and better access to external financing for corporate, national and subnational borrowers
• Economic - realization of a global common market, based on the freedom of exchange of goods and capital.
• Political - Political globalization is the creation of a world government which regulates the relationships among nations and guarantees the rights arising from social and economic globalization.
• Informational - increase in information flows between geographically remote locations
• Cultural - growth of cross-cultural contacts; advent of new categories of consciousness and identities such as Globalism - which embodies cultural diffusion, the desire to consume and enjoy foreign products and ideas, adopt new technology and practices, and participate in a "world culture".
• Ecological- the advent of global environmental challenges that can not be solved without international cooperation, such as climate change, cross-boundary water and air pollution, over-fishing of the ocean, and the spread of invasive species.
• Social - the achievement of free circulation by people of all nations.
• Greater international cultural exchange,
o Spreading of multiculturalism, and better individual access to cultural diversity (e.g. through the export of Hollywood and Bollywood movies). However, the imported culture can easily supplant the local culture, causing reduction in diversity through hybridization or even assimilation. The most prominent form of this is Westernization, but Sinicization of cultures has taken place over most of Asia for many centuries.
o Greater international travel and tourism
o Greater immigration, including illegal immigration
o Spread of local consumer products (e.g. food) to other countries (often adapted to their culture)
o World-wide fads and pop culture such as Pokémon, Sudoku, Numa Numa, Origami, Idol series, YouTube, Facebook, and MySpace.
o World-wide sporting events such as FIFA World Cup and the Olympic Games.
o Formation or development of a set of universal values
o Development of a global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones
o Increase in the number of standards applied globally; e.g. copyright laws, patents and world trade agreements.
o The push by many advocates for an international criminal court and international justice movements.
Since World War II, barriers to international trade have been considerably lowered through international agreements - General Agreement on Tariffs and Trade (GATT). Particular initiatives carried out as a result of GATT and the World Trade Organisation (WTO), for which GATT is the foundation, have included:
• Promotion of free trade
o Reduction or elimination of tariffs; construction of free trade zones with small or no tariffs
o Reduced transportation costs, especially from development of containerization for ocean shipping.
o Reduction or elimination of capital controls
o Reduction, elimination, or harmonization of subsidies for local businesses
• Intellectual property restrictions
o Harmonization of intellectual property laws across the majority of nations, with more restrictions.
o Supranational recognition of intellectual property restrictions (e.g. patents granted by China would be recognized in the United States)
Globalization can also be defined as the internationalization of everything related to different countries [Internationalization however, is a contrasted phenomenon to that of Globalization].
Looking specifically at economic globalization, it can be measured in different ways. These centre around the four main economic flows that characterize globalization:
• Goods and services, e.g. exports plus imports as a proportion of national income or per head of population
• Labor/people, e.g. net migration rates; inward or outward migration flows, weighted by population
• Capital, e.g. inward or outward direct investment as a proportion of national income or per head of population
• Technology, e.g. international research & development flows; proportion of populations (and rates of change thereof) using particular inventions (especially 'factor-neutral' technological advances such as the telephone, motorcar, broadband)
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