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What is Globalization?

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well–being in societies around the world.

Globalization is not new. For thousands of years, people – and later, corporations – have been buying from and selling to each other from great distances, such as along the famed Silk Road that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. Policy and technological developments of the past few decades have spurred increases in cross–border trade, investment, and migration so large that many observers believe the world has entered a new phase in its economic development.

In the years since the Second World War, and especially during the past two decades, many governments have adopted free–market economic systems, vastly increasing their own productive potential and creating myriad new opportunities for international trade and investment. Governments also have negotiated dramatic reductions in barriers to trade and have established international agreements to promote trade in goods, services, and investment. Taking advantage of new opportunities in foreign markets, corporations have built foreign factories and established production and marketing arrangements with foreign partners. A defining feature of globalization, therefore, is an international industrial and financial business structure.

Technology has been the other principal driver of globalization. Advances in information technology, in particular, have dramatically transformed economic life. Information technologies have given us valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analysis of economic trends around the world, easy transfers of assets, and collaboration with far–flung partners.

Globalization is deeply controversial, however. Proponents of globalization argue that it allows poor countries and their citizens to develop economically and raise their standards of living. Opponents of globalization claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world at the expense of local enterprises, local cultures, and common people.

To find the right balance between benefits and costs associated with globalization, citizens of all nations need to understand how globalization works. Globalization101.org tries to provide an accurate analysis of the issues and controversies regarding globalization.

Taken from iStudent101.com – Globalization defined

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