What Is Globalization?
This term has remained used since the 1980s since technological advances have made international trade and financial transactions more accessible and faster. And for that reason, the phenomenon has as many defenders – such as the International Monetary Fund (IMF) or the World Bank – as detractors.
There is an economic interdependence in which companies and markets cross national borders and reach a global dimension in this process.
It is a particularly economic process in which economies are integrated, resulting in increased volume and complexity of trade in goods and services in the global economy.
The market for goods services circulates freely in all countries of the world due to the grand opening of the trade and investment sector. Thanks to globalization, globalization, production factors such as capital, labor, and + now move quickly from one country to another.
Globalization has internationalized markets, which means that all producers compete with all producers in the world. Competition increases by competing with companies that use technology and innovation and offer better products at low cost.
What Capital Remains Mobilized?
When we talk about the free movement of capital, we are talking about three types of money:
Commercial capital: The capital remains used to commercialize goods and services in the world market to generate profits. An example is Shell, which sells gasoline in almost every country in the world.
Productive capital: It is the capital that remains invested in purchasing production factors to produce goods and services. An example of a company that invests in productive capital is Nike, with manufacturing plants in China and Vietnam.
Financial capital: Any money invested in another country in the form of foreign direct investment or loans. In this case, we can run the Nestlé company, a large transnational company that invests in many countries worldwide.
Characteristics Of Globalization
Globalization is a fairly complex process that has a series of characteristics that we mention below:
It facilitates access to a greater quantity of goods and services.
- Accelerate the learning and inquiry process.
- It remains based on new technologies and access to the Internet.
- An allows you to combine cultures from different countries or geographical areas.
- It promotes tourism and the mobility of people.
- Promotion of specialization.
Causes And Consequences Of Globalization
The globalization process begins in the 20th century. It is due to a change in the geopolitical strategy of the different world economic powers. From that moment on, barriers to international trade remained dismantled, and agreements as crucial as the creation of the European Union remained concluded. This type of measure made it possible to liberalize trade between countries and initiate this process.
On the other hand, advances in technology and communications have made it possible to simplify international operations. With this inattention, the development of the Internet has made it possible to buy a product manufactured worldwide without leaving home.
At the same time, another effect of globalization is innovation in the world of transport. This R + D + I process has made it possible to develop means of transportation. In a much more efficient way, reduce their costs and promote the exchange of goods between countries.
Regarding the consequences, globalization has improved the quality of life of the planet’s inhabitants by facilitating access to many goods and services. If this is true, it has also generated corporate situations with enormous market power that suffocates small businesses.
Likewise, the culture of each country remains changed by customs regulations imported from other countries. Today, we find features that are not autochthonous in the society of all nations and that produce a globalized and generalist culture.
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