The rise of technology has allowed our environment to be characterized as a global one. This also gives rise to The Global Economy which gave business the ability to market products and services all over the globe. The shift to Global Economy and widespread use of the internet, people and businesses are realizing that they are often competing with people around the world for contracts and business deals. Due to this, Global Economy brings a lot of positive effects to the global society.
There are numerous effects in the shift to a global economy including the possibility to increase benefits from economies of scale. The breaking down of global barriers allows companies to benefit from the largest and cheapest workforces, raw materials, and technology. For example, many North American publishers actually write and produce much of their software in countries such as India. People know that India provides cheap workforces and raw materials which make them popular among the technology investors from the West because it often results in enormous profit
Other effect that societies benefit from global economy is the opportunity for smaller companies to quickly expand globally. It is because companies are having more choices when recruiting a workforce and the opportunity to target a larger customer base which translates to greater earning potential. Moreover, the power of Internet gives million of strategies for companies to spread their wings. It is due to a huge network which enables them to find unlimited numbers of potential customers. Therefore, there is no doubt that global economy affects business positively.
Meanwhile, global economy also harms the international cooperation and peace. Many have argued a global economy helps in promoting international cooperation and peace. If countries are dependent upon one another’s economic success then armed conflict would be less likely. For instance, India and Pakistan are often in dispute over land territory such as Kashmir. It is argued that it would be less likely that these two countries will enter into combat due to the severe negative effects on their economies. However, it is just an isolated case. Definitely in economy, all parties need to have tolerance to build a better relationship.
As for conclusion, the global economy has created an environment in which many large corporations are becoming transnational firms. Critics of this trend say it has caused a worldwide ‘race-to-the-bottom’ where companies are so focused on staying competitive. So, the global economy will continue expanding to the development of better society.
*This is one of my several assignments during Foundation year… huhu.. wallahua’lam