Globalization: Advantages and Disadvantages

Title

Ubaldo, Allyza Ray

Vergara, Jocelyn

Vidal, John Gil

Vibora, Mary Jane

Villena, Kharl Jarold

Villorente, Linda

Institute of Education, Colegio De Montalban

GE 4- The Contemporary World

Final Major Requirement

June 1, 2023
 INTRODUCTION

Globalization refers to the integration and interaction of economies, societies, and cultures across the

world. Like any other phenomenon, it has both advantages and disadvantages.

Advantages of globalization include increased trade and economic growth, access to new markets and

products, increased competition and innovation, and cultural exchange. Disadvantages include inequality

and exploitation, loss of jobs and industries, cultural homogenization, and environmental degradation.

It is important to carefully consider and address the potential negative impacts of globalization while

striving to maximize its benefits.

Advantages and Disadvantages of Globalization

Globalization is the process of integrating economies, societies, and cultures through the exchange of

goods, services, and ideas across borders. While globalization has been instrumental in promoting

economic growth and development, it has also had its drawbacks.

Advantages of Globalization

* Increased economic growth: Globalization has led to increased trade and investment, which has

contributed to higher economic growth in many countries.

Globalization has become one of the most debated issues of our times. Considering that many of

the approaches to this phenomenon do not have an answer yet, we are still dealing with multiple

interpretations, some even contradictory. Common norms and values are required by the

globalization of the world economy, which can result in both global balance and imbalance with

winners and losers. A series of disadvantages that result in poverty and a devastating financial

crisis come along with the failure to adapt to the globalization process. Globalization is an

inevitable and irreversible process that every nation must accept and adapt to. Globalization is

the process by which nations become more interdependent and integrated through trade,

investment, and cross-cultural interactions. In recent decades, it has played a significant role in

determining the global economy. However, not all of globalization's effects are positive, and

there are advantages as well as disadvantages that need to be taken to consider. The term

"globalization" is used to describe how trade and technology have increased connectivity and

interdependence around the world. The resulting economic and societal developments are also

included in the scope of globalization. It can be viewed as beneficial since it promotes economic

progress, encourages competitiveness among nations, and helps in the elimination of barriers

between them. Globalization may also lead to the exploitation of workers, a lack of

environmental protection, and a decline in the intellectual potential of a nation.

The term globalization has been in common use since the 1980s. Yet economic globalization traces its

roots back to the Silk Road. Established in 130 B.C., the network of trade routes enabled China to open

up trade with Europe and the Middle East. This movement of people, goods, capital, and knowledge

would ultimately pave the way for the development of a global economy.

The first modern wave of modern globalization began in the early 1800s with the establishment of the

gold standard. Centuries of European colonization led to technological advances and worldwide trade, but

there was no global price convergence. When England fixed its currency to specific amounts of gold, it

became the first international standard currency, and facilitated trading and investment.

The Advantages and Disadvantages of Globalization

Today, globalization—and the localization it sparks—is growing faster than ever. As we enter a third

wave that involves a digital economy, advanced technology, and cybercrimes, it’s vital to understand the

impact worldwide.

Advantages of Globalization

1. Access to New Markets

Globalization gives businesses the opportunity to expand into new markets, reach international buyers,

and increase revenue.

Over time, companies can experience saturation for demand of their products or services domestically. By

expanding globally, they can continue growing by meeting foreign demand.

2. Spread of Knowledge and Technology

In order to cooperate globally, companies must share similar technology and technological structures.

Similarly, a centralized base of knowledge allows companies to quickly transfer information and develop

innovative solutions. For example, in the healthcare sector that means new medications and medical

devices can go to market faster in different countries.

Globalization enhances cooperation by enabling countries to specialize. This allows them to leverage

their economic strengths and trade those products for other resources. For example, a country in South

America that specializes in sugar cane can export it to a developed country in exchange for manufactured

goods.

On an interpersonal level, studies have shown that globalization promotes tolerance, as people are

exposed to new cultures and network with others across the globe.

4. Promotes Economic Growth

Studies have found that globalization enhances economic growth by distributing resources more

efficiently because countries can specialize in activities with comparative advantages. It also promotes

growth indirectly through complementary reforms in terms of capital and financial development.

China, the country with the biggest positive change in globalization, saw a growth rate in 2000 that is

2.33 percentage points higher than in 1975 due to increased integration.

Disadvantages of Globalization

1. Increased Competition

Although free trade can increase a nation’s wealth, it also increases competition. Local businesses must

compete with multinational corporations that produce cheaper goods at lower costs, which puts them at a

disadvantage.

At the same time, the increase in choices impacts buying behaviors, as customers expect high quality

products at low prices. That means companies must continuously adapt to meet demands.

2. Exploitation of Labor and Resources

Wealthy, industrialized nations sometimes enter trade agreements with developing countries in order to

exploit weak labor and environmental laws. For example, the United States has been known to use

foreign sweatshop labor to produce cheaper goods.

import resources such as precious metals at lower prices. This results in both lasting environmental

damage and human rights abuses.

3. Imbalanced Trade

A trade imbalance, also known as a trade deficit, occurs when a country spends more on imports than it

makes on exports. This creates a shortfall in capital that the country must make up for either by borrowing

money from foreign lenders or permitting foreign investments in its assets.

While lending and investment help promote economic growth, these strategies can be risky—especially

for a developing country. Throughout the 1990s, Thailand, Indonesia, and Malaysia ran large trade

deficits and relied on foreign capital to make up for it. Yet when the Asian financial crisis hit in 1997,

foreign investors backed out, leaving these countries in a precarious financial position.

4. Domestic Job Loss

When industrialized countries outsource labor, it causes a shortage of jobs domestically. Laborers whose

skills are no longer in demand experience higher unemployment, and struggle to adapt to the changing

labor market.
 Conclusion

Globalization has both advantages and disadvantages that affect the entire world. It's like life: for every
good event, there is an equally bad event. We all know that globalization is the term used to describe the
events that occur in each country in terms of trade and technology, which change the entire world. It
allows us to stay connected to each country while also changing the economy and social landscape as a
result of globalization.

Just as we stated that globalization is an event in our lives, there are both positive and bad things that
happen in our lives. Globalization, like everything else, has advantages and disadvantages. Let us begin
with the benefits of globalization's spread: improved access to new markets, which has helped firms to
develop and grow. This has encouraged competition, lowering prices and improving the quality of goods
and services. Globalization has also enhanced the movement of products and services, which has
facilitated the exchange of ideas, cultures, and technologies. This has resulted in more innovation, better
production, and higher living standards.

However, as globalization spreads around the world, it also has a negative influence or disadvantages
created by globalization. This is what causes unemployment because of technological advancements that
make it simpler for individuals to work in fields such as farming and fishing, among other things. People
have been displaced by technology; as a result of the technology brought about by globalization, people
have lost their jobs because they have been replaced by technology. Another drawback of globalization in
terms of culture and belief is that we know that the Global South is comprised of countries that were
conquered by Western countries, such as the Philippines, which was colonized by Spain for 333 years.
Our culture and ideas have evolved during the last 333 years, which bad because we have lost our
identity, and it represents the loss of humanity. Take notice that even if there is no conqueror in today's
world, it still occurs as a result of the negative impacts of technology, the media, and many other factors.
It is still common for us to love the culture and beliefs of other countries, which we have adopted because
we are envious of them.

Globalization has brought both benefits and drawbacks to our world. It is up to the leader and every
individual in every country and location to control globalization and prevent its negative consequences.
People are fortunate in knowing how to deal with and prevent the negative impacts of globalization, as
well as how to capitalize on the positive effects of globalization, such that the positive effects outnumber
or exceed the negative effects of globalization.