Introduction
Economic growth is the most critical aspect of the development of a country. Without extending the relationship with other countries in terms of product delivery and exchange of services, it will be impossible to develop at the fastest rate and even stand in the market. Globalization increases the growth faster by interdependent economic growth by delivering and accepting their goods and services. It will help to know about the new technology that comes into the market that reduces manual work and leads to automation.
What is Globalization?
Globalization is the process of faster delivery and exchange of new technology, goods, services, and capital. Countries were building an economic partnership to make it possible to expand their businesses all over the globe. It makes the market more competitive, more efficient, and limits military conflicts. According to a report, when measured in terms of GDP per capita, manufacturing countries were at the top of the chart, then developing industries. All these results in a multicultural society’s development.
Factors Influencing Globalization
Historical
The shipping route has been made for a long time to transform goods from one country to another. The Silk Route from east to west is a well-known example of a historic route.
1. Economy
End-user determines the increment that needs in goods and values based on the cost. The overall economy plays a requisite role in liberalization.
2. Resources and Market
The availability of natural sources like coal, mineral, oil gas, water, etc., contributes immensely to taking the lead in the market. Asian countries were leading more like consumers in the market than Korean, European, till Japanese manufacturing unions—results in shifting their manufacturing and trading with Asian countries.
3. Production Issue
Utilizing the gained capabilities and finding the domestic market’s slowness and overproduction results in making a manufacturing company an extrinsic look. The development of manufacturing plants like autos, two-wheelers is the best example.
4. Political
Politics always create a mess; their boss channelizes the transportation of goods and services according to the issues they are facing. Trading in the European Union and SAARC are examples.
5. Industrial Organisation
For expanding organizations, development in technology is a must in production, product mix, and firms. Components affecting this process are the hiring of services and the acquisition of sub-assemblies.
6. Technology
The advancement in technology in a respective field determines the rise in import-export products from or to the company. European countries export high-tech goods to underdeveloped countries. Today India is exporting computer-related services to the US, UK, etc.
Barriers In Economic Activities
Many factors affect the development of the country’s economy. They are
- Imposing high tax
- Restrictions on license
- Foreign exchange restriction
- Investment restriction
- Restriction on foreign product
- Corruption
- Population Growth
Benefits Of Globalization On The Economy
There are many ways to determine improvement in the quality of living, business, and the whole economy’s performance. They are as below
1. Creates New Business Opportunities
The remarkable growth of trade results because of business development and exchanging goods and services between the countries. Growth in exports refers to the increment in selling goods to foreign customers.
For example, think of a company that evolved without permission to sell its product in other countries; it only has market access within the home country. Then they need to develop another business if it has access to the global market.
The market size is necessary to know considering the aspect of investment. If the company has a small customer base, then a large investment is required to develop the respective product. The firm needs to attract more customers by availing the product on the international market, so more people are aware of it.
It is called a scale benefit of globalizing the market by many economists. It has been a real advantage to the corporate sector as it will develop so that the sales depend on more number of units and too many different customers.
To illustrate it, take the example of Erricson’s mobile technology market; if it would be related to only Sweden, it will be impossible to develop the primary component for GSM technology and make it available to other countries. Even the equipment for 3G and 4G communication took an extended period. The same applies to other sectors that require feasible development: electronics, automobile, pharmaceutical, chemicals, and many more.
Specialization always generates opportunity as it becomes easier to enter into a new market and compete based on new technology evolution.
2. Reduced Consumer Prices
Consumer pricing is as crucial as business opportunities as it results in lowering the price— results in attracting more consumers and improves their living standards. The products that come today are with increased functionality with the advantage of a nominal price rate. Previously luxury items were bought only by rich people, but now it becomes affordable for even the medium class people due to increased productivity with lower prices.
3. Boosts Productivity
Production improves by faster delivery of products to the respective customers. All this becomes possible only by regularly updating the new technology, employee efficiency, and constant effort to develop the firm through international trade. Globalization helps in productiveness by the faster distribution of technology.
For a company to adopt new technology at the fastest rate, they need more employees. If they do not have the proper software for salary processing, it will be difficult to avail the product to other states faster as they will be messing in maintaining their employee’s record.
Think about the telephone; it took almost 60 years to become available to the whole globe. If the same occurs in the case of smartphones, then the growth rate will be very slow.
Ultimately, ease in learning about new technology and developing products results in a better consumer experience and business development.
Conclusion
The world that we all know today is possible only because of exchanging goods and services to the whole planet. Following the above tips completely transforms working, living standards, and technology exchange, ultimately results in economic growth that boosts the entire production cycle.
