Globalization is the tendency for mutual funds and companies to go beyond national and national markets to other markets around the world, thus increasing the interconnectedness of the world. Globalization has had the effect of notably increasing international trade and cultural exchange.

Breaking down ‘globalization’

Proponents of globalization say it helps developing nations catch up with industrialized nations much faster through increased employment and technological advancements; Critics of globalization say it weakens national sovereignty and allows wealthy nations to send domestic jobs abroad where labor is much cheaper.

Globalization is used to explain the recent integration of national economies, industries, cultures, and government policies around the world. This integration has come about through increased technological capabilities and the efficiency of global trade, communications, and transportation. Globalization primarily refers to the economic integration of global markets, but it is also used to describe the socio-cultural integration that has been brought about by the rise of the Internet.

Drivers of globalization

Public policy and technology are the two main drivers of globalization today. Recent implementations of government policies, both national and international, have opened economic borders for countries around the world. Over the past 20 years, the world’s governments have integrated a free market economic system into fiscal policies, monetary policies, and trade agreements. This evolution of economic systems has stimulated the potential for national production and has opened countries to greater financial opportunities abroad. The world’s governments are now focused on reducing barriers to trade and actively promoting international trade in investment, goods and services.

Technology has also been one of the main reasons for the growth of globalization. Advances in information technology (IT) and the flow of information across borders have allowed people to take control of their financial lives. Technology has helped people to be more informed about economic trends and allows them to transfer financial assets and take advantage of investment opportunities. Technology has increased the ability to communicate internationally, closing the gap between different cultures.

The controversy behind globalization

At first glance, globalization is a staggering advance. Those who believe in globalization as a force for good cite rising living standards in developing countries as benefits of globalization. Those who don’t believe in globalization, however, cite the fact that it has disproportionately benefited corporations in the Western world by damaging developing economies, cultures, and people. These critics actively work to strengthen national economies at the expense of free trade.