Globalization is not a new concept. Before starting of industrial revolution, traders from one country were performing businesses with the traders of other countries. For example, Indian traders were trading cloths, spices, ivory etc. to the Western counties and in return they were importing other things from the Western countries. China was the single source of silk in the middle ages and historical silk route was the lifeline of global business.
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In the modern world concept of globalization emerged as a solution of economic slowdown and lack of capital. It is the process of integration of counties at regional and the world level which involves greater cross border trade, free movement of capital from one country or countries to other country or countries, proliferation of Multinational Companies (MNCs), unrestricted movement of goods and service between the countries, a higher level of labor migration between the countries, etc.
Globalization aims to make the world a small village in doing business. It is interconnecting economies of counties and inviting capital flow from the rich counties towards the developing and underdeveloped countries. Development of transport system and internet has made it easier to invest in foreign countries. One can get foreign brands in one’s own country without going abroad because MNCs and global brands are operating in multiple countries. So, overall globalization is making this world a big village which is interconnected in terms of business and trade.
However, it has some downsides too. As world economies have interconnected, a problem in one country or region can affect the entire world economy. For example, USA’s subprime crisis of 2008 led to an economic slowdown worldwide. Share market of one country can go bearish if the share market of a powerful country is not performing well. It has made MNCs very powerful and almost autocratic. Profit earning has become the sole purpose of human life. MNCs are practicing monopolistic behavior. They are harming the industries of the host country and also affecting the economic, social and political factors there. Standardization of brands has also destroying diversities, and it is also increasing tension between various cultures. Search of profitable markets and increasing industrialization is also destroying our environment. So, it has both the positive and negative sides.