Globalization can be defined as the process of social, political, economic, cultural and technological integration among countries around the world. However, globalization is frequently confused with internationalization. Internationalization increases the importance of international trade, international relations, treaties and alliance between nations (Herman E Daly, 1999). Internationalization works by penetrating another country and adapting to the market independently and collaborating with the local government (Kanter, 1995). Adam Smith and David Richardo explained that in internationalization, the factor of production such as capital and labour are typically less mobile across country. Globalization in other way refers to reforming national economy into one global economy, mainly by free trade, free capital mobility and may create uncontrolled migration. With globalization integration, both capital and goods are free to move internationally. Globalization has brought both positive and negative effect to nations and company. In this report I would like to explain about the impact of globalization on a country. I will cover both impacts on developed and developing nation. The impact will focus on different stakeholders such as domestic companies, workers, farmers, indigenous cultures and different demographic group. This report also will discuss on the main forces associated with globalization.
FORCES OF GLOBALIZATION
Recent advancement of telecommunication and process of information in digital forms is one of the driving forces towards globalization. In most urban parts of the world, we cannot see people who walk down the streets or walk in to the mall without seeing them talking, texting or surfing the internet on their smart phones, laptop or tablet. This context cannot be seen in the 19th century. Information technology has become ubiquitous and changing aspect of every human life. It increases people’s ability to access information and economic potential. These developments have facilitated efficiency gains in all sectors of the economy. Today, the internet and the web have transformed commerce by creating entirely new ways for retailers and their consumers to make their transactions, for business people to manage the flow of production input and market product and job seeker and job recruiter to find one another. It estimated by the end of 2012, 2.4 billion users will use the internet worldwide (Internet World Stats, 2012). Globalization accelerates the change of technology. Sophisticated informational and technologies permit instantaneous communication among the every parts of the world of global enterprise. Advance manufacturing technologies have altered long standing traditions of production. With technology, new eco friendly and sustainable materials were created diversely especially in construction and consumer appliance. Improvements of land and sea transportation also accelerate the movement of people and goods worldwide. All this advancement created greater interdependence among both nation and firms (H. Muroyama and H. Guyford, 1988).
TRADE AND INTERGRATION
It was clear that modern globalization is not a new phenomenon. It has started since the first stage of globalization before the World War since the mid of 19th century (Baldwin and martin, 1999). In the 19th century, steamship reduced the cost of sea transportation and railroads made the inland transportation cheaper. At that time, more nations embraced in international trade until the outbreak of World War I when it sinks the international trade worldwide. The second stage of globalization begins after the World War II and continued until today.
The government of the world today are greatly working together than ever before. This was partly inspired by the free market policy and to maintain a good trading relationship between nations. Thus, an...