Globalization is the integration of economies and societies around the world. This process is mainly characterized by the formation of an international network that intertwines countries, companies and people.
Globalization is not a recent phenomenon. The first wave of globalization ran from 1870 to 1914, followed by a setback due to the world wars of the 20th century. The most recent wave of globalization begins around 1980 and extends to the present day.
Next, we present to you the characteristics of globalization.
1. It comprises five dimensions
Globalization is a process that overlaps five dimensions, namely:
- Economic dimension: Companies and corporations from one country establish themselves in other countries, either by selling their products, opening subsidiaries, or forming alliances with other companies. The most obvious example is that of fast food chains like McDonald’s.
- Political Dimension: through the formation of intergovernmental organizations such as the United Nations Organization or the European Community.
- Social Dimension: the mobility of people between countries creates social relations, as well as intercommunication thanks to infrastructures and communication technologies, such as the Internet.
- Cultural Dimension: Traditions, customs, information and ideas are displayed and shared in different places where they originated. This can be seen in the spread of the original yoga of India, or the taste for sushi, typical of Japan
- Environmental Dimension: Issues such as climate change, acid rain and the ozone hole are not restricted to one country or region, and must be tackled as a whole.
2. Transporting goods is cheaper
The most important feature of globalization is the fall in transportation costs. In the first wave of globalization this was made possible by the transition from navigation to steamships and railways. In the second wave of globalization, between 1945 and 1980, maritime shipping declined.
With containerized shipments and better air fares, the speed of freight transportation was also accelerated.
More recently, new technologies and the digitization of information allow its transmission in virtual space at a negligible cost.
Transport costs are influenced by geography and the quality of infrastructure. For this reason, coastal areas and countries with good communication routes have better chances to industrialize and enter the global network.
3. Flow of people towards development centers
The different waves of globalization stimulate the movement of people to regions that generate more economic prosperity. The reason is simple: wages are higher in rich countries than in developing countries.
For example, between 1870 and 1914 millions of people migrated from the less developed regions of Europe to North America and other regions of the new world. In Asia, migration took place from highly populated regions such as China and India, towards Sri Lanka, Burma, Thailand, the Philippines and Vietnam. This migration was characterized by an unprepared workforce.
The current wave of globalization is characterized by the migration of educated workers, which is known as the “brain drain”.
This flow of people simultaneously stimulates the flow of capital: emigrants send large amounts of money to their relatives in the form of remittances. For example, India receives six times more money from outside than from international aid.
4. Increase in the flow of capital
This is nothing more than the movement of money in and out of a country. With globalization, the obstacles for investments from abroad were reduced. This stimulates the inflow of private finance into developing countries.
5. Increase in globalized countries
Among the distinctive features of recent globalization is the active participation of many more developing countries. Among these we can mention Argentina, China, Hungary, India, Malaysia, Mexico, Philippines and Thailand.
This greater participation is due to more open investment and trade policies and political stability.
6. Material goods and services are traded
With the advancement in telecommunications and the Internet, countries export not only raw materials such as iron, wood and oil, but they can also export services of different types. We have examples of this Call Center. For example, a person in the United States may call a public assistance service and be answered by a person in India.
7. Greater possibilities with a larger market
Companies have at your disposal a greater amount of consumers for their products. For example, products “Made in ChinaYou can get them pretty much anywhere in the world, not just in China. Japanese car companies can sell their cars to other continents.
8. Greater competition between companies
With a market the size of the planet, competition is also increasing. This stimulates creativity, innovation and product quality. In addition, greater competition also leads to a reduction in prices and the destruction of local monopolies.
9. Lower barriers to trade
To enter the web of economic globalization, countries must eliminate or reduce import restrictions.
10. Reduction of poverty
When developing countries integrate their economies into the global market, opportunities open up for poor people for better jobs. Some examples of the reduction of poverty thanks to globalization are the cases of China, India, Uganda and Vietnam.
In China, rural poverty was reduced by 85% from 1978 to 1999. In Vietnam, poverty was halved in a ten-year period.
11. Accelerated development of technologies
The countries that invest the most in other countries – the United States, the United Kingdom, Japan, Germany, Switzerland and the Netherlands – are also the ones that produce the most technology. Multinational corporations are a source of research and development and technology transfer.
12. Faster communication didees
Each wave of globalization is characterized by greater speed in the transmission of information and ideas. From letters on horseback until the 19th century, it moved to postal services and telephone communications in the 20th century.
Today, the satellite network and digital interconnection make the Internet the most extensive communication network on the planet.
13. More international cooperation in favor of the environment
International integration is necessary when we talk about environmental problems. Global warming, pollution and the ozone layer are matters of interest to all peoples.
Environmental globalization envelops international environmental protection agreements. Among these we can mention the Kyoto protocol and policies to eliminate chlorofluorocarbons, which cause the loss of ozone in the stratosphere.
14. Political globalization
Trade interests between countries also shape power relations. Countries that depend on others for the supply of raw materials are under its influence and can be affected by internal conflicts in those countries.
15. Cultural globalization
Globalization is also characterized by the exchange of cultures. People carry customs in food, behavior and celebrations, which may or may not be welcome in the country they arrive. In the same way, these people learn the new customs of the place that receives them.
This cultural globalization is also manifested through television, cinema, literature and social networks. American television series were responsible for showing the world traditions such as Thanksgiving and the Easter egg hunt, events that can be seen in other countries.
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References
Darity, WA (Editor in chief) (2008) International Encyclopedia of the Social Sciences 2nd ed. Macmillan reference USA.
World Bank Research Report (2002) Globalization, Growth and Poverty – Building an Inclusive World Economy. Colombian Alfaomega. Mexico