Globalization Good or Bad – Part 1
Globalization has been defined with numerous and widely differing meanings dating back to 1870 as “economic integration through trade, migration, capital flows and communication” (Mann, 2005). Considering current impact, globalization indicates the social process, highly influenced by technological development, increasingly rapid means of transport and the “information revolution”, which has created a truly worldwide web of spatial connections and functional interdependence (Defining Globalization). With such immense impact on the world economy, globalization has many defenders and dissenter about the overall good or bad it provides. (Photo: Nanette Thomas, APC Dallas, Chapter President)
The true effects of Globalization are the development of new information and technology, increasing global competition, economic prosperity for developing countries, labor and outsourcing along with exploitation and inequities shared with developing countries, via labor, environmental, and politically factors. Thomas Friedman states in his book The Lexus and the Olive Tree that” Globalization can be incredibly empowering and coercive and can democratize opportunity and democratize panic. It makes whales bigger and minnows stronger. It leaves you behind faster and faster, and catches up to you faster and faster”. This statement has been proven prevalent as the effects of globalization have increase many nation through access to information, ease of communication and trade over the past two decade and in turn has left behind many developing countries behind even faster.
The changes of globalizations intertwine a complex position making it difficult to summarize positive or negative effects. With globalization comes wealth and new markets, at the same time causing disorder, exploitations, and unrest. It is both a source of repression and a catalyst for global movements of social justice and emancipation (Global Policy Forum, 2009). The totality of effects that globalization have vast and objective, thus this paper discusses the “Good or Pro-Globalization” views more specifically, information technology and outscoring and the “Bad or Anti-Globalization”, specifically the inequality and exploitation of developing countries in this process.
Good or Pro-Globalization
Globalization has set in motion a process of far-reaching change that is affecting everyone (World Commission on the Social Dimension of Globalization, 2004). This process has connected more people together than every before with new technologies and open trade policies. International trade has said to be an important factor for the advancement of developing countries and their integration into the global economy. Catalysts for globalization including economist, politicians, and corporations promote policies encouraging free trade, free investment, deregulation, and privatization, with the promise of economic growth (Thomson, 2001). This agenda has lead to the development of trade agreements such as the North American Free Trade Agreement (NAFTA) in 1993; the creation of the World Trade Organization in 1994; the expansion of the European nations’ plus the creation of regional free trading blocs in Latin America and the Far East (Thomson, 2001). Globalization has provided developing countries the opportunity to increase income, their standard of living, through outsourcing new jobs to these countries, exposing them to new technologies, which expands their ability to trade.
Information and Technology
The 21st Century has encompassed the “Information Age” with the advent of fiber optic communication, satellites the flow of information and communication is now without borders. Access to information and the ability to communicate instantly with anyone around the word has become readily available through application and platforms used over the Internet. Advances in information and communication technologies have reduced the business cost, as an example, “Cisco Systems is one of the world’s largest companies and only owns three factories to make the equipment used to help maintain the Internet. Cisco subcontracts the rest of its work to other companies around the world. Information platforms, such as the World Wide Web, enable Cisco’s subcontractors to bid for business on Cisco’s Web site where auctions take place and where suppliers and customers stay in contact” (Globalization, 1997-2009).
Outsourcing
Outsourcing is the process of companies moving or contracting some or all of their service operation or manufacturing to another company overseas (Gibson, Ivancevich, Donnelly, & Konopaske, 2009). This process takes advantage of lower labor cost, natural resources or other services available in developing countries. Today’s leading U.S. companies are relocating operations-software development, call center, payroll, and loan and insurance claims processing, etc.-to an offshore locations” (Gibson, Ivancevich, Donnelly, & Konopaske, 2009) to take advantage of the lower labor cost available. The labor wages for these operations are vastly lower. For example, a computer chip designer with a master’s degree in electrical engineering and five years’ experience often earns $12,000 a year in India compared to $85,000 a year in the United States (Globalization, 1997-2009). Communication has also played a vital role in outsourcing these jobs as current methods allow companies to intersect with employees in other countries through video conferences, internet calls, instant messaging, and email.
The agreements such as (NAFTA) have instilled confidence in Multi-National Corporations in outscoring as it provides protection of foreign investors against economic and political threats, while reducing barriers of setting up financing and communications in the host country (Globalization, 1997-2009). Outsourcing also provides a tax benefit for U.S. Corporations by allowing them to indefinitely defer any federal tax on profits earned over seas and only pay taxes on income when profits return to the U.S. (Globalization, 1997-2009). Outsourcing provides great benefits for cost reduction corporations and an increase standard of living and greater opportunity for the laborers from the developing countries who work these jobs.
To be continued …
By Nanette Thomas, APC Dallas Chapter President
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