Globalisation

Globalization

Globalization removes country boundaries and the ease with which people can do business is enhanced. The whole becomes one and customers and business interact

Globalization is the internationalization of means of production, marketing and distribution of goods and services (Loots, 2006: 3). Companies open new branches in other countries to ensure product and services are offered in the new countries and these entities are governed by the mother body regulations on a micro scale but they have to comply with the regulations in the new countries. This enables ease of communication, reduction in costs for distribution and relaxes many trade regulations. Every economy requires investment to grow their economies, and globalization ensures there is Foreign Direct Investment by the companies that are entering their borders to do business.

Globalization enables the increased access to international markets for their producers , though competition stiffens but domestic producers benefit from the specialization

Benefits of Globalization

Increased competition ensures domestic producers produce more efficiently due to their international specialization

Consumers enjoy wide variety of products, both locally produced and imported at lower prices, this ensures that there is sufficient supply of product at all times.

Developing country’s benefit from spill over of technology from imported production equipment, helping them to catch up with technological advances in developed countries.

The major benefit of globalization is when factors of production are brought into the country, as this will increase employment opportunities. When finished products are brought into the country there will potentially be job losses as domestic products are pushed out of the market.

Capital movements into the country provide will ensure the interest rates of the domestic nation are low as the government will not necessarily raise money via interest rates.

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