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Globalization: Economic Benefits and Drawbacks

Introduction

With the slow and steady integration of national and local markets of the world, the entire globe is actually opening up to form one big market. There is a reduction of barriers to international trade with various countries engaging not only in economic but also in cultural and technological exchanges. The world markets are being conjugated by one big aspect referred to as globalization. Since the advent of globalization a number of years back, it has been attributed to a number of positive global changes but at the same time, it has been held responsible for various world economic woes.

Globalization and strategic demands for worldwide efficiency

Globalization has enhanced interchanges of commodities enhancing financial and economic interactions between different countries of the world (Martin, 2004). The market as well as the demand for various economic commodities has grown extensively. This condition has made it a prerequisite for every nation to engage in global trade in order to see to it that they meet standards expected for every commodity by the various countries that form the market base. Nations are facing stiff competition and the market situation is so strict that competition can become an aspect that can either make or break the country. In this way, globalization has ensured that the various producers of goods and services put quality as a priority of their agenda.

In ensuring quality of goods and services, globalization has enhanced the worldwide efficiency by seeing to it that people’s demands are adequately catered for. Globalization has also led to the introduction of a variety of goods and services in the market. The global market presents a wide range of commodities from which consumers can make informed choices. The consumers can make choices based on the various aspects of quality, cost, availability, technological requirements and durability, amongst many other areas of customer selection criteria. Globalization has helped eliminate market inefficiencies brought about by the aspects of lack of competition, small market and demand sizes, and low supply, amongst other related inefficiency.

Local market responsiveness

The local markets are the basic units of the world economy. They are the single units that make up the global market. Market responsiveness concerns the ability of the local trade units to respond to their markets’ needs and wants. Globalization brings with it diverse market and economic knowledge to the various local markets involved. The local businesses are acquainted with very important knowledge concerning the prevailing market situation. Therefore, they are capable of making sound economical judgments based on what they observe as the ongoing market trends. In this manner, the local enterprises gain competency status that allows them to react promptly and objectively to the market demands. Market and trade features such as the consumers, suppliers (distributors), government policies and regulations are some of the forces that affect local market development. Globalization has brought great advancement to these aspects in such a way that they are now being viewed at international levels. The government policies, for example, have been replaced by international market trade regulations.

Globalization and the spread of world class technology

Through globalization, there has been a wide scale dissemination of technological knowledge. This technological information has helped inform the various stakeholders of global trade on how to use technology to their advantage. The countries that are not well equipped with technology are able to gain a lot from their technologically advanced trade partners. A good example is the ongoing conquest of African markets by the newly industrialized economies of Asia. This includes China. The African economies are obtaining various technologies in terms of goods and services. Through technological spread, nations and economies have been greatly informed on better ways of production.

Globalization and market competitiveness

All the above-discussed factors aim at looking into how globalization has improved the world trade. The outstanding fact here is that globalization has greatly helped in developing the world economies. Countries now aim at producing quality in order to survive in the market. The competitiveness of the market has led to some nations being sidelined. This is especially if, due to some incapacitating reasons, they cannot keep up with the standards of the market. Competition is healthy when it leads to production of quality. On the other hand, competition is also considered unnecessary if it is unhealthy. Unhealthy competition brings about imbalance in the market leaving several nations as economic casualties.

Conclusions

Today’s vibrant world economy can highly be attributed to globalization. Globalization has helped raise nations and even continents such as Africa and Asia. These are the two continents that have greatly benefitted from the opening up of the world markets. It is in record that the developing countries in these two continents increased their share of world trade from as low as 19 percent to 29 percent. This was between 1971 and 1999. Therefore, globalization can be said to be God-sent since it has positively impacted nations of the world and enhanced development.

Reference

Martin, W. (2004). Why Globalization Works. New Haven: Yale University Press.