Globalization entails the global economy's increased integration and interdependence. It implies an increase in trade as well as an increase in the movement of labour and capital. Globalization has both advantages and disadvantages. The advantages include increased competition, lower prices, and economies of scale. Critics argue that globalization can leave many people behind because of the rapid pace of progress, which gives large multinational corporations more power, allowing them to avoid taxes while charging exorbitant prices.
Globalization's Impact on the UK Economy
1. More competition/lower prices Domestic monopolies will now face more international competition as a result of globalization.
2. Enhanced trade. Because of globalization and increased trade, UK businesses can benefit from specializing in goods where they have a comparative advantage.
3. A broader range of imports. The availability of consumer goods has grown significantly as a result of globalization. Because of food imports, for example, we have grown accustomed to the year-round availability of fruits and vegetables.
4. Migration. Migrants are finding it easier to enter and work in the UK as a result of globalization. This free movement of labour can assist the United Kingdom in filling job vacancies.
What are the major issues of globalization?
While globalization has many advantages, it is not without drawbacks.
Some of the challenges that businesses face when going global are as follows:
1. International Hiring
International recruiting is the most prevalent difficulty for tech executives in the United States and the United Kingdom, which is unsurprising. When recruiting beyond borders, HR departments are confronted with unknowns. When applicants are thousands of miles away from headquarters, firms must first create a method for interviewing and carefully vetting them.
2. Experiencing Tariffs and Export Fees
Tariffs and export fees are other challenges that both US and UK tech leaders said they face in the report—29 per cent agreed this is a challenge for their global businesses.
3. Payroll and Compliance Issues
Managing payroll abroad and remaining compliant with changing careers and tax rules is another typical roadblock to global development. This work gets significantly more challenging if you're trying to manage the business in several markets.
4. Exploitation of Foreign Workers
Lower costs benefit many consumers, but they also create tough competition, leading some businesses to seek out cheap labour sources.
What are the 5 positive effects of globalization?
Globalization has a wide range of impacts on businesses. Those who decide to pursue international expansion, on the other hand, reap several benefits, including:
1. Gaining Exposure to New Cultures
Access to foreign cultures, such as food, film, music, and art, has never been simpler because of globalization. Because of the free flow of people, products, art, and information, you can have Thai cuisine delivered to your flat while listening to your favourite UK musician or watching a Bollywood film on Netflix.
2. Product Cost Reductions
As a result of globalization, businesses might discover more cost-effective ways to create their goods. It also boosts global competition, which lowers costs and gives customers more choices.
3. Acquiring New Talents
In addition to new markets, globalization helps organizations to find fresh, specialized talent that is not available in their existing market. Companies may now hunt for tech talent in booming regions like Berlin or Stockholm rather than Silicon Valley, thanks to globalization.
4. Gaining Access to New Markets
Businesses gain a lot from globalization, including new consumers and other income streams. Companies seeking these benefits are looking for flexible and inventive methods to extend their operations globally.
5. Globally Improved Living Conditions
As a result of globalization, the standard of living in developing nations has improved. According to the World Bank, extreme poverty has decreased by 35% since 1990. Furthermore, the first Millennium Development Goal, created in 1990, aimed to cut poverty in half by 2015.
What are the 5 things that are affected by globalization?
1. International Employee Expectations
Foreign employees have different expectations when it comes to salary and benefits, as well as how they handle their daily work schedules.
2. Increased Goods Transport
Globalization exposes businesses to new markets where they may sell their products and obtain labour, raw materials, and components. As a result of these two facts, completed items now go farther than ever before—potentially halfway around the world.
3. Raised Awareness
While many of globalization's environmental consequences have been negative, its expansion has increased worldwide environmental awareness.
Thanks to improved connectivity and growing rates of international travel, people may now experience the environmental consequences of deforestation, habitat loss, and climate change more easily than ever before. As a result, additional laws, regulations, and processes have been put in place to counteract the negative consequences.
4. Reduced Biodiversity
Increased greenhouse gas emissions, ocean acidification, deforestation (and other types of habitat loss or destruction), climate change, and the introduction of alien species are all reducing global biodiversity.
The population sizes of all species, including mammals, birds, fish, amphibians, and reptiles, have decreased by 68 per cent since 1970, according to the World Wildlife Fund's latest Living Planet Report. Latin America and Africa, two fast-growing regions with major world economic importance, have seen a disproportionate loss of biodiversity, especially among ecologically sensitive fish, reptiles, and amphibians.
5. Economic Specialization
One often-overlooked benefit of globalization is that it allows countries and geographical areas to concentrate on their economic strengths, knowing that they can rely on trading partners for commodities they don't manufacture. This form of economic specialization is known to boost efficiency and production.
Overspecialization, however, can lead to serious environmental issues such as habitat loss, deforestation, and misuse of natural resources.
Nov 22, 2021