You might think globalization is a relatively new phenomenon (compared against the vast history of mankind). From the spice trades of the east to the vast Roman road networks, the truth is that civilizations have been striving to reach out, trade, and often conquer one another for thousands of years. It isn’t a new concept, it has just gotten remarkably easier in the past century.
What Is Globalization
Globalization is the interdependence of the world’s economies, population, cultures, and more. Information, goods, services, and technology flow across the globe like never before and its effects can be felt in nearly every aspect of our lives.
For good or for worse, globalization is here to stay. For businesses, that means having a strong localization strategy in place to make sure you’re doing the best business possible in the regions you may expand to, or do business in.
We’re not here to choose sides. Instead we want to provide some pros and cons from both sides, so you can get a sense of how complicated an issue this really is.
The Pros Of Globalization
Possibly the most obvious benefit that businesses receive from globalization is the unprecedented access to global markets. Regardless of what industry you find yourself in, expanding into new territories is easier now than it has ever been. That’s not to say it is in fact easy, but you can’t really argue that being able to pick up a phone and set up some virtual meetings doesn’t make things a whole lot easier.
Globalization has also popped the t knowledge bubbles that frequently sat alone in isolation. Breakthroughs in tech can now be shared, and are often encouraged, through global incentives and efforts. This has been especially powerful for industries like healthcare, emergency services, and renewable energy.
While there are currently economic negatives (we’ll get to those shortly), well thought out globalization can actually help enhance and grow economies. How? By accessing a wider distribution of resources and allowing for countries to be more efficient and specialized in activities.
Finally, and this is less of a business pro than a personal one, being exposed to differing cultures helps people grow as individuals. It helps to promote a wider tolerance and acceptance of people from different backgrounds.
The Cons Of Globalization
Expanding the playing field means there will be more players on the field. Business can’t just worry about local competition anymore, they have to also take into account the wide-reaching net of global companies. When expanding to new territories, this also means expanding the amount of companies who will see you as direct or indirect competition.
Globalization can sometimes lead to trade deficits (importing more than you export) and domestic job loss, two things that are less than ideal for the economy. This effect is often felt most heavily in the manufacturing sector.
Why the job losses? Well, whether you think it’s greed or you think it’s just business, companies often try to boost their bottom line in any way they can. This is often done at the expense of the everyday worker. Globalization has allowed large companies to move much of their business to places where workers make much less money and are less protected.
Want to dive deeper into this subject? Don’t miss the latest episode of the Thinc Underground Podcast!
This week’s episode welcomes teacher, coach, and author of Take Back Manufacturing: An Imperative for Western Economies, Nigel Southway. The episode may or may not challenge a few of your preconceived notions, either way, it’s a fascinating listen on globalization and the future of western economies. “A lot of people think like economists. They argue whether the glass is half full or half empty. I will tell you the glass is too big.”
