Benefits of Globalization
The True Benefits of Globalization
When people hear the world “globalization”, the first things that come to mind are low wages, outsourcing, job loss, APEC, NAFTA, and CAFTA. Most people believe that if outsourcing goes bad, globalization will be bad, too. The truth is: globalization happens to be great for the country and the overall market economy because it promotes prosperity to participating countries. All that we need to do is educate people on multiculturalism and diversity within the work place, as well as the sensitivity of culture within participating countries.
Here are several benefits of globalization that you should know: opportunity costs, trade terms, balance trades, comparative advantages, changes in consumption and production, and how much cheaper it is to purchase than to produce.
The United States of America is a primary exporter of agricultural products and raw materials, import large volumes of various services. The market is very efficient when it comes to trading as it concentrates mostly on specialization. Due to concentration, the costs are minimized while profits, production and efficiency are all maximized. Specialization can be achieved whenever participating countries choose to shift their rare resources to creating services and goods where they have comparative advantages over other countries, in turn increasing their goods consumption.
When it comes to workers, this might not make a lot of sense, most of all if they lose jobs; however, organizations happen to be in business, so they can make money. Therefore, they understand what needs to be done and how long it would take to break-even and make these profits. Businesses never intentionally hurt their workers by firing them. They would rather keep their jobs within the United States of America since, by keeping them here, they can save themselves from the hassles of talking to multi-lingual people worldwide and moving there. However, organizations operate businesses as if they were puzzles. For every puzzle, many pieces are required to complete the puzzle. Therefore, going global would be of the utmost essence for the majority of organizations in order to properly compete and control both produce and costs in an efficient manner.
Nothing is created within global trading but winners since selling products creates increase in demand for those products because the foreigners’ net demand will be added onto the domestic demand. So, with a demand increase, prices will rise. Still, purchasing products will create increases within product supply since net foreign supply will be added onto the domestic supply. Therefore, with this supply increase, the prices will drop. Nobody will lose. It is definitely a win-win situation for every country that participates.
Because of technological changes, continuous development and research, the market economy remains to be dynamic. Because of this, people have to keep up with this overall movement and change, as well, by attending seminars and going through training on a regular basis. The traditional kind of static markets is long gone.
There are worries regarding exploitation of poorer people within developing countries, however. This even went further as their wages were compared to slave’s wages. The truth is: whenever developing countries get the chance to get jobs to earn more than before, improvement happens. A lot of people from these countries happen to be illiterate and have no idea how important education is. Because of this, they send their kids off to work at production plants. Before sending their kids to school, however, they have to be educated on how important education is and stop sending their kids these production plants.Benefits of Globalization