Globalization

The question who is benefiting from globalization and who is not is a quite complex one. It is not possible to give a clear answer, because it is not white and black everybody in the whole world has with this new era changes and also threats. To have a look of the whole extend ones can say that Europe and USA are benefiting the most from the globalization and countries like in Africa aiming benefits too, but not in this extend as the western world. Due to the fact that is much easier to get richer when you are already rich, compared to poor ones, because it is different when the US is able to increase their GDP to 1% and an African country is increasing its GDP to 1 or even more percentages.

In the following there are some illustrations how the effect of globalization is in different areas.

Consequences for the freight market

On the freight market, the market for products, globalization offers a significantly higher option for import and export goods and services very cheaply and easily in specific areas. A greater supply leads to lower prices. This is the case in markets where simple goods are traded, such as textiles.
Many local firms can not survive under the high pressure of prices and have to take consequences: either they go there, where they can produce cheaper, or they must abandon the production.

Globalization can also lead to a much bigger demand, due to the fact that world market is offering a high natural business market.
The consequences for businesses are twofold. There are companies which benefit that the market has become bigger and there are companies that are under price pressure and to suffer consequences.

Consequences for the capital market

As mentioned above, the offer on the labour market increased dramatically. The capital supply, however, is hardly grown.
Labour and capital are the fundamental factors of production. In the capital, this means the capital for the same job, but a significantly increased labour supply, the price of capital increases.
The price of capital is the interest or investment returns.

Each investor has in the whole world the possibility of them his money. He will have the opportunity to choose where the profit is greatest. The consequences for the capital market are thus a higher return on investment capital.
This is also a reason for the sharp rise in profits often many international companies.
On the other hand, the financial markets relatively little regulated, so that speculation is preparing the way.
The Asian crisis, for example, was by speculators triggered the capital markets and plunged an entire region into crisis

Consequences for the company

There are companies that benefit from globalisation and companies under the globalization suffer.
A company needs a lot of international think and act as even a few decades. For investments abroad must also be considered.
The capital market demands high returns and many companies are forced production to relocate abroad.
Decisions as going abroad do not always based only on cost savings. With internationalization can also sales targets or a limit of the exchange rate risk prosecution

Consequences for the environment

Globalization has a negative impact on the environment.

The globalization caused by the growth of world economy on the other hand, involves substantial risks for the environment. In particular, in emerging countries is the need for environmental protection have not yet detected and the industrial plants pollute the environment. The danger for the environment is therefore the growth of world economy brought about by globalization is possible.

Consequences for the industrialized countries

In industrialized countries; in particular the change in the labour market is often a serious problem. Many poorly educated workforces are unemployed .This leads to social problems and higher costs of social systems. The labour markets have changed fundamentally, many professions have little future.

Only activities that are not able to move have a good performance as a car mechanic. Cars to Poland can not be brought in for repair.

The companies, however, benefit from a large capital stock, which leads to high returns by the major global markets.
In particular, these scissors is difficult to convey to the public. The companies make record profits while many people are unemployed.
Especially for the policy accrue do big areas with a lot of potential problems, as the viewing horizon and the effect of options are limited mostly nationally, but the company has long think globally and little to show patriotism when it comes to the profits of corporations.

Consequences for developing countries

The developing countries have, through globalisation many new possibilities. The products may be included in the whole world be sold and there is a huge cost advantage in the workforce.
In the developing world is no large capital stock, so that the developing countries in many cases of investors from the Western industrialized countries depend.

This dependency ratio is often exploited.
Problems for developing countries in particular protectionist measures by the richer countries dar.
Especially in the agricultural sector, there are numerous limitations and restrictions of free trade. These are covered by subsidies and import restrictions. For developing countries with their often very limited agricultural economies, this is a major disadvantage of the many opportunities of globalization construction.

To summarize and end these blog I will describe again and very briefly the advantages and disadvantages of globalization.

Benefits of globalization

Globalization offers the possibility of international trade.
Due to the division of labour, the entire economic performance and prosperity is able to increase.
Now countries and regions have better opportunities to sell their products and aid the economic development. This will increase the social prosperity.
Of course there are real advantages: In the western world, such as West Europe and North America, is the opportunity to eat fresh fruit, to drink qualified coffee and tea and also to trade with cheap goods throughout the whole year, because everything can be bought in China so easily. Without globalization, these products are not to buy or much more expensive.
You can almost the whole world and travel all over the world communicates with each other.

Disadvantages of globalization

Globalization in its present speed overburdens the adaptability of a lot of people. Many employees confront the unemployment or are already affected. Especially for older workers, it is difficult to adapt to the new situation and skills. A whole generation of workers falls into a deep crisis.
In developing countries, many people feel that they do not participate in prosperity.
In those countries the people can feel a difference compared to the life standard 20 years ago, but they feel the prosperity, power and abundance is unevenly distributed. There are extremely rich people and on the other hand, many very poor people who live in slums.