Thanks to technological advancements and international exchange, the world is now much more connected than ever. Deeply understanding how globalization works can help you make an educated decision whether going global is right for your business.
This seems like a rudimentary question, but it’s best to start with the basics.
Globalization is defined as the process of interaction or integration among people, companies, and governments of different nations. While globalization may seem like a brand-new concept, it’s a phenomenon that has been going on for centuries.
Throughout history, people and businesses have been buying and selling to each other from one end of the continent to the other. For example, the Silk Road in Central Asia connected China and Europe during the Middle Ages. When European colonization spread throughout the world in the 19th century, global cooperation truly began to pick up speed.
However, the first “wave” of globalization was put to a halt when World War I started. It wasn’t until post-World War II that the U.S. focused on reviving globalization as a tool to recover from the war and restore peace between nations. Organizations like the United Nations and World Trade Organization were founded on the idea of creating a better world.
Globalization as a concept aims to develop and benefit society. If we want to look at how globalization affects modern society, let’s look at the facts.
Globalization has helped bridge the gap between the poorest and richest people in the world. The number of people in extreme poverty have been cut in half since 1990. Globalization encourages each country to specialize in what it produces with the least amount of resources possible. This is known as comparative advantage. This promotes healthy economic growth, efficient production, and lower prices for goods or services. Global competition also forces countries to improve their products and provide more variety to consumers.
There are still several benefits that come with globalization. Socially we have become more open and tolerant towards each other. Exposure to different kinds of people from all walks of life has made society feel less alienated with one another.
Another benefit is that corporations and governments share financial interests and are beginning to work together towards resolving ecological problems. Such examples include environmental preservation and healthcare.
Lastly, global companies investing in entities in other countries brings good jobs which uplifts the whole community.
How will your business contribute to society after going global?
Reach out to NNRoad today and find out.