What is Globalization?

When cultures meet, ideas converge and people accept other’s views, the world becomes small and the effect is seen in all aspects of life. This process can be termed as globalization. With the addition of new dimensions in the form of business and trade, the definition of globalization has taken higher meaning. It is quite obvious that the tremendous changes and innovations in telecommunications and transportation are the prime factors responsible for current state of globalization.


GlobeSince several years man has been in contact with people spread over the continents. New modes of transport like railroads and steamship and telecommunications like radio, Television have revolutionized the world in several aspects during early 19th century. They became instrumental in maximizing the utilization of time and space. This trend was followed in the 20th century and transportation became much faster and safer with innovations in technology in several fields including electronic and tele-communications. In the 21st century world has seen a drastic change with the advent of internet and mobile phone. World has become a global village and network connections became very convenient across the world.


As per Roland Robertson, a sociology professor at the University of Aberdeen gave an apt definition to globalization. It is “the compression of the world and the intensification of the consciousness of the world as a whole”. Thomas L.Friedman is of the opinion that the world has changed for better and worse because of factors like supply chaining, outsourcing, globalized trade and political forces. He says that world has become “flat”. It is evident that globalization is spreading to all aspects and its influence can be felt in business houses and it seems that it keeps growing.


History of globalization

Globalization can be traced back to historic times of Indus valley civilization. Since 1st century India played a powerful role in maintaining relations with the neighbouring countries. Several trade routes were established with different regions across the continents. India developed contacts with South Burma, Cambodia, Vietnam, Siam and several other coastal countries. Along with trade, people exchanged their views by learning new languages and exchanging cultural links. In this way one country influenced the other in varied fields.


At later stages Muslim and Jewish traders tried to bridge the gaps between the countries by creating new trade routes. This trend has resulted in globalization in fields like trade, agriculture and technology.


The 16th and 17th centuries saw the rise of Portuguese, Spanish, Dutch and British maritime empires. World trade took new dimensions with the establishment of Dutch East India Company and British East India Company. Countries exchanged commodities freely with introduction of steamships in the first half of the 19th century. Railways also added to the convenience and transportation became cheaper. Trade contacts were developed by several countries. Political changes in Asia and Africa also influenced the globalization.


But the incidence of World War I and World War II created negative influence on the globalization as several countries had to experience setbacks because of political and economic changes globally.


But with the advent of new technology in aviation industry, people of developed countries could afford to enjoy the luxury of air travel. The low cost carriers and Open Sky policy among the counties gave rise to tough competition in trade and other fields.


Telecommunication networks developed drastically in 1990s and the use of computers improved the work efficiency. The invention of email has revolutionized the communication network globally. Usage of internet across the world has lessened the gap between the continents. Communication became relatively easier and simple.


Some important aspects of globalization

There are several impediments for the globalization of business. The most important of them all is the protection of domestic markets. But the phenomenon of globalization is unstoppable with advancements in communications and transportation.


Globalization of business leads to economic globalization. But it requires opening up of economy and providing conducive atmosphere for flow investments. With the globalization of business, it becomes inevitable for the countries to open up their economies to survive and sustain in the long run because of exchange of goods and services, technology and investments.


Globalization of business has led to setting up of multinational companies (MNCs). These companies treat the entire world as business space for sourcing manpower and, production and sale of goods and services. This has led to the economic advancement of many third world countries that have opened up their economies. International trade has made these MNC’s flourish in their businesses.


The development of MNC’s also brought the demand for information networks cutting across boundaries of countries and continents to share information and data within its own centres and also between the MNC and its clients.


The growth of economies also increased the purchasing power of the countries and leisure activities such as tourism leading to the growth of tourist heavens.


Impact of globalization

One of the most important aspects of globalization is the unification of work force across the world and willingness to immigrate to any corner of the world.


An off shoot of business and economic globalization is its effect on culture. With the world becoming flatter because of increased business, trade and economic ties among the countries, the cultural exchanges among people has also become a common place aiding globalization Further, similar impact could be felt in the geo political spectrum with nations becoming unions or groups of countries to take the advantage of globalization.


The globalization also impacted world health with good health care becoming available across the world.


Sporting world became of very competitive because of globalization with the expertise training and facilities becoming easily available.


Pros and cons of globalization

Globalization has positive impact on corporatization of trade and businesses into multinational corporations.  It promotes liberal democracies and capitalistic countries. World is getting united and citizens are becoming world citizens because of cultural exchanges and social contacts.


On the negative side, the uniqueness is difficult to protect. There is a possibility of social disintegration, economic meltdown, breakdown of democracy, poor care for environment, possibility of spreading new diseases and with poor becoming poorer and rich becoming richer.