Benazir Marjan intends to use her business knowledge in the practical field through this article.
Globalization; It’s Disadvantages
Globalization is about the interconnectedness of people and businesses across the world that eventually leads to global, cultural, political and economic integration. It is the ability to move and communicate easily with others all over the world in order to conduct business internationally. There is no doubt that, globalization blessed this twenty first century. At the same time it has drawbacks too. Some of these are explaining bellow:
1. Globalization may encourage more offshoring instead of less. With fewer restrictions in place at the national level, some businesses may use offshoring to their advantage. Even if, they kept jobs local, the threat of sending jobs to a different, cheaper region overseas could be used to justify lower wages at home. The end result of an effort to remove borders would be an increase in wages in the developing world, but a decrease in developing countries.
2. Globalization increases competition. When viewed as a whole, global free trade is beneficial to the entire system. But, individual companies, organizations and workers can be disadvantaged by global competition. This is similar to how these parties might be disadvantaged by domestic competition. Having this in mind, some firms, industries, and citizens may elect governments to pursue protectionist policies designed to buffer domestic firms, or workers from foreign competition. Protectionism often takes the forms of tariffs, quotas, or non-tariff barriers, such as quality of sanitation requirements that make it more difficult for a competing nation or business to justify doing business in the country. These efforts can often be detrimental to overall economic performance of both parties.
3. Due to globalization, trade imbalance occurs. The balance of trade refers to the balance of values between a country’s export and import’s goods and services. As the result of globalization, any country can trade to any part of globe. That’s is why in some cases, developing countries become so much dependent on developed countries in terms of import goods but their export capabilities are lower than import. This is how trade imbalance occurs.
4. Globalization causes job displacement. It doesn’t result in an increased number of jobs. Rather, it redistributes jobs by moving production from high-cost countries to low-cost ones. This means that high-cost countries often lose jobs due to globalization, as production goes overseas.
5. Implementation of globalization principles becoming harder in many industrially developed democratic countries to ask its people to bear the pains and uncertainties of structural adjustments with the hope of getting benefits in future.
6. Globalization paves the way for redistribution of economic power at the world level leading to domination by economically powerful nations over the poor nations.
7. Globalization may introduce disease transfer. People may spread the germ of any disease when he travels to other country for professional issues.
8. Sometimes due to globalization, cheating happens. Well developed countries may do cheating while doing business is under developed countries.
9. Globalization doesn’t fix a lack of skills. The future of employment involves programming, robotics, artificial intelligence. Workers who adapt to automation with their skill set are most likely to find employment in coming generations. Jobs which require repetitive functions will be first to go away which are the employment opportunities often found in the developing world. With no meaningful skills to a globalized economy, there could be a higher unemployment rate if border restrictions reduces because only those in the developed world would be trained for the new economy.
10. Sometimes, globalization destroys a person’s own identity. As he has to move to other country, he may accept new culture by forgetting his original traditions and lifestyle.
11. Globalization can impact environment negatively. In some cases, powerful nations break the environmental law in developing countries while doing business, which may cause serious natural threat for a particular country.
These are the some of disadvantages of globalization through the world. It is very important for business owners to know about above specifications before they start their business in global aspect. If he knows about the upcoming challenges and struggles he may face, it would be definitely easier to solve his problems and move on. Without having adequate knowledge (both positive and negative), no company or enterprise should extend their business outside his own country. This is how business world runs with both opportunities and challenges. It is totally up to us how we are taking the advantages, reducing the uncertainties and finally making profits.
This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.
© 2022 Benazir Marjan