Globalization is necessary in the world. Different theories on the concept of globalization provide distinct reasons on the need for globalization. The world’s advancements and technology help drive the need for globalization. Communities and organizations alike are affected by globalization, and smaller countries benefit from the generosity of larger participants in the world’s market.
Globalization, in the business sense, is to make a product or service available in the global market. Any investment that is across national borders is also part of globalization. Many companies in the United States (US) have taken their product, service, or investment opportunities to other countries. This affects the global economy. Just as the economy of the US affects many Americans, the global economy affects the citizens of the world. As any company that does affects the global economy, positive or negative affects may be realized.
Many different theories support the concept of globalization. Tariffs are levied on a country-to-country basis. Tariffs are duties, also known as taxes, which each country puts on the imports and exports of that country. The government of the country in question wages a tariff. The World Trade Organization (WTO) oversees all countries. Absolute advantage supports the concept of globalization, because this concept ensures that one country can produce a product better and more efficient than another country. By importing or exporting this product or good, the countries that use this product can easily trade other products or goods. This helps countries produce the things to make them more efficient. Comparative advantage happens when the opportunity cost of producing goods differs from country to country, all sides will benefit from trade. This develops more opportunities for smaller countries to be able to complete on the same stage as larger countries. This allows an increase in production, which helps with the smaller countries economies. More jobs, a higher Gross Domestic Product (GDP), more money to pump into the countries economy and better investments arise for the country. A few others such as free trade, which means that the countries do not levy tariffs or quotas on any goods coming in or out of the country. Balance of trade is another key theory for globalization. The values of imports are weighed against the values of exports. With out these theories and practices, there would be no globalization.
The major drivers of globalization have changed over the passed decade. Right now, the biggest driver is technological innovation (Blundel & Thatcher, 2014). The way the internet and the World Wide Web has come into homes and business, makes this the top driver. This has made consumption of products from all parts of the world become available to even the most rural parts of the country. Technology has also played a large role on navigation or global positioning systems (GPS). GPS has not only made ships cross the...