Group 6@Paris IMBD: Pros and Cons of Globalization

Summary of the term Globalization:

The phenomenon of globalization thus characterized by the gradual disappearance of national borders, whether productive or financial. Indeed, international trade barriers have been reduced, it is not just about tariffs, but also the costs of transport and communication facilities especially with the advent of the Internet.
Globalization is it an unavoidable? What are its benefits and limitations?

Pros:

–        Producing specific goods and services at a low marginal and opportunity cost

–        Countries benefits from competitive advantages

–        Cheaper and easier access to information, knowledge, technologies and health

–        Opening of new markets

–        Integration of developing countries by sharing information and technologies

–        More competition in all markets: cheaper prices and better quality

–        Mobility: people are mobile and go abroad to improve their skills

Cons:

–        Uniformization of cultures

–        Unfair competitiveness

–        Distorted growth process between and within countries

–        Too interconnected economies (a failure in one country can lead to bad things in others)

–        Small businesses are being eaten by big businesses

–        Outsourcing, job losses in developed countries (manufacturing sector)

–        Health (contagions can occurs more easily)

–        Illegal immigration

–        Global warming: destruction of the environment

 

Conclusion:

As globalization has progressed, living standards have improved significantly in almost all countries. However, the developed countries and a few developing countries obtained the best results.
How globalization can reduce inequalities?

Globalization: pros and cons. Group 10 @ Raleigh

PROS

Globalization designs the world as a small village, let the information and money spread out freely, and provides more diversity in cultures, and also for goods and services. For example, an American car can be made up from a German engine, Japanese tires, and Sweden seats assembled in Morocco and sold in France by an Argentinean Manager. But globalization has many others advantages, some of them are listed below:

  • Easy access to knowledge and information through many different canals and platforms
  • Smaller distances thanks to enhanced communication and transports
  • Companies have access to a broad range of markets around the globe
  • Creation of an International supply and demand
  • International competition
    • It often leads to an economic welfare between companies and customers
    • Companies have the ability to choose the best suppliers around the world for better results
    • Easy access to resources, example the iPhone is composed by different raw suppliers around the world

CONS

  • Cultural challenges
    • Homogenizing effects of the globalization, phenomenon of Americanization
    • Cultures endangered
  • Impact of Global trade on Poverty
    Case Study and researches from Yale Center for the Study of Globalization: What are the poverty impacts of global trade reforms under a successful Doha Round for seven of the poorest countries in the world? – “Our main finding is that the Doha development round in the business as usual scenario is likely to have fairly small impacts on household welfare in Zambia.”
  • Global warming
    • Development vs. Climate Change in emerging countries, Linking Climate Change and Development Policies
    • Limitations and mixed results of Global Summits (Kyoto protocol 2005-2012: Japan, Australia, Canada, Spain and Austria did not reach their objectives)
  • Global Health
    Risk of a fast spread of communicable diseases (Severe acute respiratory syndrome (SARS) epidemic in 2003, Ebola virus in 2014)
  • Business: Tendency to privatization and monopolization
  • Boom of a globalized black market and International criminal networks (Drugs, mafia, terrorism, counterfeiting…)

DECISION/CONCLUSIONS

Globalization both harms and benefits the world. Therefore, control and regulation are needed to counter the negative effects of globalization. International cooperation between states, global institutions, NGOs companies is required.

Group5 @ Raleigh – Pros and Cons of Globalization

What is Globalization in brief?
Globalization is a process of interaction and integration between people and general entities. International technology, trade and laws mostly impact it.

Pros of Globalization

Proponents of global free trade stresses the fact that globalization promotes global economic growth, and foster employment. According to them, infusion of foreign capital and technology permits poor countries to develop economically. Moreover, ideal values are spread out through globalization and enable to diffuse democracy and human rights.

Labour aspect
• Easier for companies to find good international workers
• Global mobility for workers (enhance their skills, learn overseas)

Cultural aspect
• People are more open minded about cultural differences
• Brains working and studying around the globe helps innovation
• It helps education by sending students overseas
• Decrease of ignorance thanks to information sharing

Economical aspect
• Opens new markets for businesses
• Availability of wide range of products
• Increases the amount of foreign direct investments
• Competition between companies: the average quality of products is better
• Improves transports (cost and speed)

Political aspect
• Globalization helps protect human rights: interconnection between economic freedom and political freedom
• It fosters the growth of democratic governments

    Cons of Globalization

But globalization has obvious cons that have been raised numerous times. Evoking Globalization cons led one to raise questions about employment, labour, economy, finance, politics etc.

Economical aspect
• Wealth discrepancy between Western countries and developing countries has increased
• Disorganization of the financial system, which is no longer, linked to real figures
• Fierce competition: difficulties for local businesses
• Merging of black markets and forgery
• Hyper-interdependence between countries: snowball effect

Labour aspect
• Negative outsourcing: use of cheaper workforce in merging countries which leads to inequality, because of fierce competition
• Lower labour standards

Cultural aspect
• Loss of cultural specificities
• Pressure on little cultural groups: westernization of the world

Political aspect:
• Threat for sovereignty of the nation-state by undermining national laws and regulations by claiming world trade and finance regulations

Group 24@Sophia Antipolis: Globalization, the Pros and the Cons.

Globalization is nowadays part of the worldwide economy. It is clear that we must adapt to it and this generates pros and cons.

 

Pros:

 

–       Globalization exists, it is difficult to escape it and it is a development opportunity for all countries. The problem is that we have a global economy and national policies, which leads to a non-mastered globalization. We need a regulated globalization with international bodies that would have more power.

 

–       Globalization facilitates the exchange of information, information flows

easily and instantly through Internet and new methods of communication.

 

 

–       It offers more choice to the consumer via the competitive global business. Companies can easier enter new markets.

 

–       Globalization promotes full employment in all countries according to the HOS model

 

–       It promotes education

 

–       Globalization promotes development which causes the installation of democracy

 

Cons:

 

–       Globalization increases inequalities, especially in emerging countries. In addition, global crises tend to spread faster all over the world, and have huge impacts on people’s lives.

 

–       it is a powerful tool to roll back social rights, including in the most developed countries. The argument of competitiveness, submission to insatiable economic constraints translate everywhere by social regression that deals with working conditions, employee status, social protection and pensions

 

–       In fact, the HOS theory is not confirmed as we see that the gap between developing countries and develop countries is widening.

 

–       Globalization seems to be a factor of financial instability. The multiplication of crises since the 1970s tends to show (the 1987 crash, bursting of the Internet bubble in 2000…). The liberalization of capital flows has a tendency to promote their mobility, market volatility, the development of bubbles and their bursting.

 

–     Inequality has increased in recent decades. Inequality in wealthy countries or in emerging markets has also increased.

 

 

 

Group 11 – FMI PARIS : The Pros And Cons Of Globalization

Globalization is a recent approach from the 90’s. It’s a new economical way, where all the goods, firms and labors can move unfettered across the world, which has increased competition. Nowadays businesses are developing in a globalization way and it’s impossible to avoid this economical system.

  The advantages of the globalization

  • A worldwide market for the companies and for the customers:

o   Globalization allows an opening on new markets. What pulls sustainability and the development of companies

o   The quality of products and services is improved because of the increase of competition.

o   It develops the business creation in the emerging countries. Globalization could also increase job opportunities

  • The investment in foreign countries and particularly in developing countries. There are lots of options for investments for different companies.
  • The spread of technical know-how and also economic or political knowledge from developed countries to developing but the reverse too.
  • The exchange of “brains” permits an improvement of the techniques, quality and knowledge for the country.
  • From a developing countries point of view, employment increased because of globalized businesses. Of the West side, this statement is more mixed.
  • It also increases the employment and the wealth.

       The disadvantages of globalization:

  • Environmental degradation is one the most important negative effect of globalization (global warming problem)
  • Hyperfinance: Nowadays, we live in a globalized and unregulated financial system that is fully emancipated from the underlying real economic system
  • Because of competition and a gap between Western countries and developing countries, globalization has led to increase child work and slavery.
  • Although globalization helped millions of people to escape from poverty, the gap between rich and poor is getting higher because of a lack of wealth distribution: Globalization made the rich richer and the poor poorer.
  • Outsourcing problems: There is a pressure on the employed people of developed countries who are always under the threat of their jobs being outsourced
  • Americanization of the culture: Globalization may lead to loss cultural identity
  • Organized crime and terrorism are organizations that have greatly benefited from globalization, evidenced current events of the 21st century

    Thus, globalization is still running and responding to issues more and more important and whose challenges, that is to say redistribution of wealth, protection of the environment or the well being of populations are priorities.

Groupe 15 @ Sophia : Globalization – Pros and Cons

In our group, we have debated, in terms of pros and cons, how we apprehend the globalization process.

First of all, let’s evocate pros of such a phenomenon:

* Spread and sharing knowledge and diversified goods and services

* Markets openness which creates plenty of opportunities for companies and individuals (like new jobs opportunities and new market share)

* Better communication between citizens, states and international institutions

* Improvement of transport (cost and speed) and ways of communication

* New technologies and scientific progress which permits a improvement of medicine and so an increase of life expectancy all around the world

And then, cons of globalization which of course constitute a lot of challenges for the future:

 * The immense enrichment is misallocated and the wealth gap between poor and rich countries has increased

* Globalization is from the beginning an occidental process which resulted in the disappearance of some culture and ancestral knowledge

* Increase of black market and international criminality

* The diminution of Nation States role in the democratic and social fields

* Global warming and environmental destruction

* As the interdependence increases, the systemic risk of a global collapse from financials actors (from “Too Big to Fail” banks) is more present

* Delocalisation and competition between workers without same social rights

As a conclusion, we can assert that globalization permit to enhance our way of living and personal comfort (life expectancy, immense middle class emergence, better transports and communication for sharing knowledge). However, as we mentioned earlier, big challenges are ahead and it the purpose of course existing international institutions and politics but first of all citizens and companies.

Group 4 @ RALEIGH: pros and cons of globalization

According to us, here are the pros and cons of globalization:

Pros:

Economic side: 
– Globalization facilitates foreign investment because capitals are nowadays really easy to move.
– Globalization reduces poverty in the world as figures show that poverty is decreasing.
– Global competitiveness and fast plus no expansive imports allowed to keep prices away from huge inflation.
– Possibility to work abroad with usually a higher salary.

Political side: with globalization each country can make decisions by keeping the benefit and example of others countries in mind. Also, important issues  (such as global warning) become a concern of the whole world.

Cultural aspect: thanks to globalization more informations are shared easily accross the world. People are better aware of what’s happening in every countries. Moreover, knowledge can be spread very easily worldwide.

Cons:

Economic aspect:
– Globalization makes the rich richer and left the poor poorer. For example, even if developing countries benefit from job outsourcing, and thus from the increase of job opportunities, the power still remains in the hands of the developed countries.

– The worldwide finance is a part of globalization. It increases capital flows with a very high volatility of assets.

– Competition in some sectors becomes extremely hard and profit driven companies do not hesitate to move their plants and activities abroad to benefit from a lower salaries policy of the country.

Cultural side: some countries have lose a part of their own indentity, culture and beliefs. For example, with the americanization, due to globalization, american culture is present in pratically every country

Group 5 FMI- Raleigh: Pros and Cons of Globalization

Globalization covers a wide range of topics, ranging from cultural values and information to economics and international trade, we chose to focus here on the pros and cons of globalization on economics and culture aspects.

  • Free Trade

Free trade reduced the barriers that once stood between nations and thus conducted to a significant increase in trade volumes. An example of a free trade agreement is the North American Free Trade Agreement (NAFTA), which allows Mexico, Canada, and the United States to trade products and services without important import and export restrictions.

Free trade has several benefits for economies and consumers. Consumers enjoy a greater choice of goods and services, since foreign companies can easily offer their products for sale. They also benefit from lower overall prices for goods, as a greater variety of goods for sale increases competition and drives prices down.

Manufacturers in countries with free trade agreements also benefit from free trade in the form of a larger export market.

Free trade also allows nations and economies to specialize in what they do the best, producing higher quality goods at better prices.

  • Free Movement of Labor

In a globalized world, workers can more easily move from one country to another.

In many cases, free movement of labor allows economies to fix ‘gaps’ that exist in their labor markets. Companies can also hire workers in foreign countries to work for them using online tools and telecommunications.

The benefits of free movement of labor also work in the other direction. If a country has too few jobs and too many workers, people can easily move to markets in which the job market is better. An excellent example of free movement between countries can be seen in the European Union.

  •  Global Culture

Global mass media connects all the people in the world so that cultural barriers reduce.

However, each of the benefits of globalization, from free trade to the free movement of labor, can also be a downside for specific countries and economies.

  • Paradox of Free Trade

One of the biggest downsides of globalization is the harm it can cause to economies at an early stage of development. Free trade forces all countries to compete using an even playing field, which critics claim puts smaller, less developed countries behind their more developed counterparts.

Some economists believe that free trade is only possible if industries in developing countries are allowed to grow under a certain level of economic protection. This is known as the Paradox of Free Trade, and it is a core argument among economists.

  • Labor Drain

Another downside of globalization is the phenomenon known as ‘labor drain.’ Since globalization allows workers to easily move from one country to another, countries with limited job opportunities often find it difficult to encourage skilled workers to stay in their countries.

After receiving training in their home countries, many people emigrate and spend their professional career in a more lucrative economy at the expense of their home country.

  • Corporate Tax Avoidance

Globalization can also have a significant negative impact on taxation. Since many companies are able to trade with one country while being based in another, large corporations often exploit tax havens such as Luxembourg, Switzerland, and Hong Kong to avoid paying taxes in the countries where they generate their profits.

This can often hurt consumers in the form of higher taxes on consumer products and property. Since countries often have little control over where big companies register to avoid tax, they are often forced to raise other taxes in order to make up for lost revenues due to corporate tax avoidance.

  • Weakening of specific cultures in the profit of a global culture

Lastly, globalization has had a cultural impact on many countries that have been subject to large-scale immigration. Many critics of globalization feel that the free movement of labor has resulted in the weakening of specific cultures in favor of greater economic and cultural hegemony.

Pros and Cons of Globalization – Groupe 2 @ Raleigh

Pros and Cons of Globalization

Pros

Human Resources & Cultural Benefits

  • Enlarge the pool of talented people for companies
  • Ease access to job opportunities worldwide
  • Global access to education through international programs of universities
  • Stimulate innovation
  • Raise awareness about cultural differences
  • Tend to stabilize and prevent political conflicts
  • Increase average standards of living
  • Access to new markets

 

Economical Benefits

  • Stimulate economic growth by allowing bigger markets for companies
  • Increase foreign direct investments beneficial to countries economic growth and health
  • Raise the integration of global trade cycle
  • Boost communication, trades and transport, reducing barriers between countries
  • Create tax competition

 

Cons

Economical Aspect

– Globalization fosters economic growth of MNC’s; give them more and more power (sometimes in the detriment of weakest previously based companies in the targeted country)

– Allow propagation of crisis through a globalised financial system (except the Muslim one)

– Increase global income gap inequality

– Has a bad impact on the national industry  (multinationals become the core and pillar instead of the national companies)

– Inequality of benefit from the globalization between the developed countries and developing countries. The developed countries take more benefits than the developing countries, and at the same time, the developing countries suffer the adverse economic effects of globalization. The national economy of developing countries is facing a greater pressure of continuous expansion of multinational companies and their capital.

Companies outsource their business and it creates unemployment in developed countries for unskilled jobs

Some companies are getting very big because of globalization, they have a bargaining power on governments and world’s economy:

  • Influencing local policies
  • Offshoring in low tax countries
  • Putting pressure to reduce social benefits

Human Resources Aspect

– Retain talents: Brain drain phenomenon (medical in Africa, scientists from Europe to USA..)/Increase the scarcity of high skilled workers in developing economies in favor of well established ones.

 

Cultural Aspect

– Loss of Identity/particularism/specificities for the benefit of a global mindset

 

Environmental Aspect

– Pollution/Global Warming

– Spread of bad consumptions habits