Globalization: Threat or Opportunity?

In 2014 the world has become more of a global society due to globalization. In this essay I will define globalization and describe the factors which lead to this phenomenon. I will examine some institutions that are related to trade and development on a global scale. I will aslo point out the positives and negatives of globalization for industrialized countries and underdeveloped countries around the globe.

Globalization is the expansion and intensification of linkages and flows, of people, goods, capital, ideas, and cultures across the borders (Rakesh). It is the concept of people working together and helping each other out. Globalization affects every country in the world in one way or another, whether it is positive or negative. Economies around the world have integrated through trade and financial flows. Globalization has been aided the movement of labor, knowledge, and technology across the world (Rakesh).

International trade has been around for a long time. Countries in the 13th century traded spices for example. Since World War II there have been advancements in technology which has reduced the costs of trade (IMF). When advanced technology came about it brought an easier way to trade and communicate through out the world. Technology has experienced rapid growth in the international trade and investment. In the 20th century globalization is now not only a notion it is a phenomenon but the question is, is it a threat or an opportunity?

Companies world wide such as McDonald's have gone global. McDonald's started in the United States and is now in countries across the globe. McDonald's is just one of the many businesses taking their business global. Companies expand internationally for many reasons. Some expand to reach a global market while some do it for cheaper labor.

There are many main factors that lead to the growth of globalization, one of them being trade. For centuries countries have engaged in trade. One country may produce a material that another either can not produce or just can not produce as well as the other, so they trade materials. The export of manufactured goods rose from the year 1971 to 1999 29% and continues to grow (Nicholas). It is easier for countries to trade than it was 20 years ago one reason being because the barrier on international trade have been lowered through the General Agreement on Tariffs and Trade (GATT).

Another factor witch lead to globalization is financial flows.