Globalization: Definition, Benefits, Effects, Examples – What
is Globalization?
Publié le 21 January 2019
Mis à jour le 25 March 2024
Globalization – what is it? What is the definition of globalization? Benefits
and negative effects? What are the top examples of globalization? What
famous quotes have been said about globalization?
What is Globalization? All Definitions of
Globalization
A Simple Globalization Definition
Globalization means the speedup of movements and exchanges (of human
beings, goods, and services, capital, technologies or cultural practices) all over
the planet. One of the effects of globalization is that it promotes and increases
interactions between different regions and populations around the globe.
Related: Traveling Today And Tomorrow: Cities And Countries With More Travelers
An Official Definition of Globalization by the World Health
Organization (WHO)
According to WHO, globalization can be defined as ” the increased
interconnectedness and interdependence of peoples and countries. It is
generally understood to include two inter-related elements: the opening of
international borders to increasingly fast flows of goods, services, finance,
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people and ideas; and the changes in institutions and policies at national and
international levels that facilitate or promote such flows.”
What Is Globalization in the Economy?
According to the Committee for Development Policy (a subsidiary body of the
United Nations), from an economic point of view, globalization can be defined
as:
“(…) the increasing interdependence of world economies as a result of the
growing scale of cross-border trade of commodities and services, the flow of
international capital and the wide and rapid spread of technologies. It reflects
the continuing expansion and mutual integration of market frontiers (…) and
the rapid growing significance of information in all types of productive activities
and marketization are the two major driving forces for economic globalization.”
Related: Planet VS Economy: How Coronavirus Is Unraveling A Dysfunctional System
What Is Globalization in Geography?
In geography, globalization is defined as the set of processes (economic, social,
cultural, technological, institutional) that contribute to the relationship between
societies and individuals around the world. It is a progressive process by which
exchanges and flows between different parts of the world are intensified.
Globalization and the G20: What is the G20?
The G20 is a global bloc composed by the governments and central bank
governors from 19 countries and the European Union (EU). Established in 1999,
the G20 gathers the most important industrialized and developing economies to
discuss international economic and financial stability. Together, the nations of
the G20 account for around 80% of global economic output, nearly 75 percent
of all global trade, and about two-thirds of the world’s population.
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G20 leaders get together in an annual summit to discuss and coordinate
pressing global issues of mutual interest. Though economics and trade are
usually the centerpieces of each summit’s agenda, issues like climate change,
migration policies, terrorism, the future of work, or global wealth are recurring
focuses too. Since the G20 leaders represent the “political backbone of the
global financial architecture that secures open markets, orderly capital flows, and
a safety net for countries in difficulty”, it is often thanks to bilateral meetings
during summits that major international agreements are achieved and that
globalization is able to move forward.
The joint action of G20 leaders has unquestionably been useful to save the
global financial system in the 2008/2009 crisis, thanks to trade barriers removal
and the implementation of huge financial reforms. Nonetheless, the G20 was
been struggling to be successful at coordinating monetary and fiscal policies
and unable to root out tax evasion and corruption, among other downsides of
globalization. As a result of this and other failures from the G20 in coordinating
globalization, popular, nationalist movements across the world have been
defending countries should pursue their interests alone or form fruitful
coalitions.
How Do We Make Globalization More Just?
The ability of countries to rise above narrow self-interest has brought
unprecedented economic wealth and plenty of applicable scientific progress.
However, for different reasons, not everyone has been benefiting the same
from globalization and technological change: wealth is unfairly distributed and
economic growth came at huge environmental costs. How can countries rise
above narrow self-interest and act together or designing fairer societies and a
healthier planet? How do we make globalization more just?
According to Christine Lagarde, former President of the International Monetary
Fund, “debates about trade and access to foreign goods are as old as society itself ”
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and history tells us that closing borders or protectionism policies are not the
way to go, as many countries doing it have failed.
Lagarde defends we should pursue globalization policies that extend the
benefits of openness and integration while alleviating their side effects. How to
make globalization more just is a very complex question that involves
redesigning economic systems. But how? That’s the question.
Globalization is deeply connected with economic systems and markets, which,
on their turn, impact and are impacted by social issues, cultural factors that are
hard to overcome, regional specificities, timings of action and collaborative
networks. All of this requires, on one hand, global consensus and cooperation,
and on the other, country-specific solutions, apart from a good definition of the
adjective “just”.
When Did Globalization Begin? The History of
Globalization
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For some people, this global phenomenon is inherent to human nature. Because
of this, some say globalization begun about 60,000 years ago, at the beginning
of human history. Throughout time, human societies’ exchanging trade has been
growing. Since the old times, different civilizations have developed commercial
trade routes and experienced cultural exchanges. And as well, the migratory
phenomenon has also been contributing to these populational exchanges.
Especially nowadays, since traveling became quicker, more comfortable, and
more affordable.
This phenomenon has continued throughout history, notably through military
conquests and exploration expeditions. But it wasn’t until technological
advances in transportation and communication that globalization speeded up. It
was particularly after the second half of the 20th century that world trades
accelerated in such a dimension and speed that the term “globalization” started
to be commonly used.
Related:
Are we living oppositely to sustainable development?
Examples of Globalization (Concept Map)
Because of trade developments and financial exchanges, we often think of
globalization as an economic and financial phenomenon. Nonetheless, it
includes a much wider field than just flowing of goods, services or capital. Often
referred to as the globalization concept map, some examples of globalization
are:
Economic globalization: is the development of trade systems within transnational
actors such as corporations or NGOs;
Financial globalization: can be linked with the rise of a global financial system with
international financial exchanges and monetary exchanges. Stock markets, for
instance, are a great example of the financially connected global world since when one
stock market has a decline, it affects other markets negatively as well as the economy
as a whole.
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Cultural globalization: refers to the interpenetration of cultures which, as a
consequence, means nations adopt principles, beliefs, and costumes of other nations,
losing their unique culture to a unique, globalized supra-culture;
Political globalization: the development and growing influence of international
organizations such as the UN or WHO means governmental action takes place at an
international level. There are other bodies operating a global level such as NGOs like
Doctors without borders or Oxfam;
Sociological globalization: information moves almost in real-time, together with the
interconnection and interdependence of events and their consequences. People move
all the time too, mixing and integrating different societies;
Technological globalization: the phenomenon by which millions of people are
interconnected thanks to the power of the digital world via platforms such as
Facebook, Instagram, Skype or Youtube.
Geographic globalization: is the new organization and hierarchy of different regions
of the world that is constantly changing. Moreover, with transportation and flying
made so easy and affordable, apart from a few countries with demanding visas, it is
possible to travel the world without barely any restrictions;
Ecological globalization: accounts for the idea of considering planet Earth as a single
global entity – a common good all societies should protect since the weather affects
everyone and we are all protected by the same atmosphere. To this regard, it is often
said that the poorest countries that have been polluting the least will suffer the most
from climate change.
The Benefits of Globalization
Globalization has benefits that cover many different areas. It reciprocally
developed economies all over the world and increased cultural exchanges. It
also allowed financial exchanges between companies, changing the paradigm of
work. Many people are nowadays citizens of the world. The origin of goods
became secondary and geographic distance is no longer a barrier for many
services to happen. Let’s dig deeper.
The Engine of Globalization – An Economic Example
The most visible impacts of globalization are definitely the ones affecting the
economic world. Globalization has led to a sharp increase in trade and economic
exchanges, but also to a multiplication of financial exchanges.
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In the 1970s world economies opened up and the development of free trade
policies accelerated the globalization phenomenon. Between 1950 and 2010,
world exports increased 33-fold. This significantly contributed to increasing the
interactions between different regions of the world.
This acceleration of economic exchanges has led to strong global economic
growth. It fostered as well a rapid global industrial development that allowed
the rapid development of many of the technologies and commodities we have
available nowadays.
Knowledge became easily shared and international cooperation among the
brightest minds speeded things up. According to some analysts, globalization
has also contributed to improving global economic conditions, creating much
economic wealth (thas was, nevertheless, unequally distributed – more
information ahead).
Globalization Benefits – A Financial Example
At the same time, finance also became globalized. From the 1980s, driven by
neo-liberal policies, the world of finance gradually opened. Many states,
particularly the US under Ronald Reagan and the UK under Margaret Thatcher
introduced the famous “3D Policy”: Disintermediation, Decommissioning,
Deregulation.
The idea was to simplify finance regulations, eliminate mediators and break
down the barriers between the world’s financial centers. And the goal was to
make it easier to exchange capital between the world’s financial players. This
financial globalization has contributed to the rise of a global financial market in
which contracts and capital exchanges have multiplied.
Globalization – A Cultural Example
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Together with economic and financial globalization, there has obviously also
been cultural globalization. Indeed, the multiplication of economic and financial
exchanges has been followed by an increase in human exchanges such as
migration, expatriation or traveling. These human exchanges have contributed
to the development of cultural exchanges. This means that different customs
and habits shared among local communities have been shared among
communities that (used to) have different procedures and even different
beliefs.
Good examples of cultural globalization are, for instance, the trading of
commodities such as coffee or avocados. Coffee is said to be originally from
Ethiopia and consumed in the Arabid region. Nonetheless, due to commercial
trades after the 11th century, it is nowadays known as a globally consumed
commodity. Avocados, for instance, grown mostly under the tropical
temperatures of Mexico, the Dominican Republic or Peru. They started by being
produced in small quantities to supply the local populations but today
guacamole or avocado toasts are common in meals all over the world.
At the same time, books, movies, and music are now instantaneously available
all around the world thanks to the development of the digital world and the
power of the internet. These are perhaps the greatest contributors to the speed
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at which cultural exchanges and globalization are happening. There are also
other examples of globalization regarding traditions like Black Friday in the US,
the Brazilian Carnival or the Indian Holi Festival. They all were originally created
following their countries’ local traditions and beliefs but as the world got to
know them, they are now common traditions in other countries too.
Why Is Globalization Bad? The Negative Effects of
Globalization
Globalization is a complex phenomenon. As such, it has a considerable influence
on several areas of contemporary societies. Let’s take a look at some of the
main negative effects globalization has had so far.
The Negative Effects of Globalization on Cultural Loss
Apart from all the benefits globalization has had on allowing cultural exchanges
it also homogenized the world’s cultures. That’s why specific cultural
characteristics from some countries are disappearing. From languages to
traditions or even specific industries. That’s why according to UNESCO, the mix
between the benefits of globalization and the protection of local culture’s
uniqueness requires a careful approach.
The Economic Negative Effects of Globalization
Despite its benefits, the economic growth driven by globalization has not been
done without awakening criticism. The consequences of globalization are far
from homogeneous: income inequalities, disproportional wealth and trades that
benefit parties differently. In the end, one of the criticisms is that some actors
(countries, companies, individuals) benefit more from the phenomena of
globalization, while others are sometimes perceived as the “losers” of
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globalization. As a matter of fact, a recent report from Oxfam says that 82% of
the world’s generated wealth goes to 1% of the population.
Related: Globally, Business And Government Lack Trust, A New Survey Shows
The Negative Effects of Globalization on the Environment
Many critics have also pointed out that globalization has negative effects on the
environment. Thus, the massive development of transport that has been the
basis of globalization is also responsible for serious environmental problems
such as greenhouse gas emissions, global warming or air pollution.
At the same time, global economic growth and industrial productivity are both
the driving force and the major consequences of globalization. They also have
big environmental consequences as they contribute to the depletion of natural
resources, deforestation and the destruction of ecosystems and loss of
biodiversity. The worldwide distribution of goods is also creating a big garbage
problem, especially on what concerns plastic pollution.
Related:
How Air Pollution And Diabetes Kill Millions Every Year
Changing Aircrafts’ Altitude To Reduce The Climatic Impact Of Contrails
Are Avocados Truly Sustainable?
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Globalization, Sustainable Development, and CSR
Globalization affects all sectors of activity to a greater or lesser extent. By doing
so, its gap with issues that have to do with sustainable
development and corporate social responsibility is short.
By promoting large-scale industrial production and the globalized circulation of
goods, globalization is sometimes opposed to concepts such as resource
savings, energy savings or the limitation of greenhouse gases. As a result, critics
of globalization often argue that it contributes to accelerating climate change
and that it does not respect the principles of ecology. At the same time, big
companies that don’t give local jobs and choose instead to use the manpower of
countries with low wages (to have lower costs) or pay taxes in countries with
more favorable regulations is also opposed to the criteria of a CSR approach.
Moreover, the ideologies of economic growth and the constant pursuit of
productivity that come along with globalization, also make it difficult to design a
sustainable economy based on resilience.
On the other hand, globalization is also needed for the transitioning to a more
sustainable world, since only a global synergy would really be able to allow a
real ecological transition. Issues such as global warming indeed require a
coordinated response from all global players: fight against CO2 emissions,
reduction of waste, a transition to renewable energies. The same goes for ocean
or air pollution, or ocean acidification, problems that can’t be solved without
global action. The dissemination of green ideas also depends on the ability of
committed actors to make them heard globally.
Related:
What Are The Benefits Of Having A Network Of CSR Ambassadors?
5 Tips For Organizations To Develop Their CSR Strategy In 2020
Top 10 Companies With The Best Corporate (CSR) Reputation In 2020
The Road From Globalization to Regionalization
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From a globalization perspective, regionalization means a world that is less
interconnected and has a stronger regional focus.
Regionalization can also be analyzed from a corporate perspective. For instance,
businesses such as McDonald’s or Starbucks don’t sell exactly the same products
everywhere. In some specific stores, they consider people’s regional habits.
That’s why the McChicken isn’t sold in India, whereas in Portugal there’s a steak
sandwich menu like the ones you can get in a typical Portuguese restaurant.
Politically speaking, when left-wing parties are in power they tend to focus on
their country’s people, goods and services. Exchanges with the outside world
aren’t seen as very valuable and importations are often left aside.
Related: Why Is It Important To Support Local And Small Businesses?
Globalization Quotes by World Influencers
Many world leaders, decision-makers and influential people have spoken about
globalization. Some stand out its positive benefits and others focus deeper on
its negative effects. Find below some of the most interesting quotes on this
issue.
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Politic Globalization Quotes
Globalization quote by the former U.S President Bill Clinton ??
No generation has had the opportunity, as we now have, to build a global
economy that leaves no-one behind. It is a wonderful opportunity, but also a
profound responsibility.
Globalization quote by Barack Obama, former U.S. president ??
Globalization is a fact, because of technology, because of an integrated global
supply chain, because of changes in transportation. And we’re not going to be
able to build a wall around that.
Globalization quote by Dominique Strauss-Kahn, former International Monetary
Fund Managing Director ??
“We can’t speak day after day about globalization without at the same time
having in mind that…we need multilateral solutions.”
Globalization quote by Stephen Harper, former Prime Minister of Canada ??
“We have to remember we’re in a global economy. The purpose of fiscal
stimulus is not simply to sustain activity in our national economies but to help
the global economy as well, and that’s why it’s so critical that measures in those
packages avoid anything that smacks of protectionism.”
Globalization quote by Julia Gillard, Prime Minister of Australia ??
“My guiding principle is that prosperity can be shared. We can create wealth
together. The global economy is not a zero-sum game.”
Other Globalization Quotes
Globalization quote by the spiritual leader Dalai Lama ??
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“I find that because of modern technological evolution and our global economy,
and as a result of the great increase in population, our world has greatly
changed: it has become much smaller. However, our perceptions have not
evolved at the same pace; we continue to cling to old national demarcations and
the old feelings of ‘us’ and ‘them’.”
The famous German sociologist Ulrich Beck also spoke of globalization ??
“Globalization is not only something that will concern and threaten us in the
future, but something that is taking place in the present and to which we must
first open our eyes.”
Globalization quote by Bill Gates, owner and former CEO of Microsoft ??
“The fact is that as living standards have risen around the world, world trade has
been the mechanism allowing poor countries to increasingly take care of really
basic needs, things like vaccination.”
Globalization quote by John Lennon, member of the music band The Beatles ??
Imagine there’s no countries. It isn’t hard to do. Nothing to kill or die for. And no
religion, too. Imagine all the people. Living life in peace. You, you may say I’m a
dreamer. But I’m not the only one. I hope someday you will join us. And the
world will be as one
Image credits to map on Shutterstock, environment pollution on Shutterstock, cultural
interaction on Shutterstock, economic globalization on Shutterstock, globalization on
Shutterstock and connected world on Shutterstock
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