In short, Globalization is the free movement of goods, services and people across the world in a seamless and integrated manner. In other words, when countries that were hitherto closed to trade and foreign investment open up their economies and go global, the result is an increasing interconnectedness and integration of the economies of the world.
The importance of this economic phenomenon can’t be stressed enough; arguably the most significant contributor to increasing a country’s GDP (standard of living) is foreign direct investment – that is, foreign companies who invest in your country.
A modern example of this is American company’s outsourcing labour to Mexico and China because labour costs are cheaper in these areas. This not only benefits the foreign companies (in this case, American companies like Apple) but also helps the countries being invested in by increasing their exports, creating jobs, closing the technology gap, and overall, improving quality of life.
When assessing the importance of Globalization, it’s good to look back to where it originated; Extent of the and routes blocked by the in 1453 spurred exploration and saw rise to international trade.
Diagram of the 15th-century silk road
Trade on the Silk Road played a significant role in the development of South-Asian countries.
Though silk was certainly the major trade item exported from China, many other goods were traded, and religions, syncretic philosophies, and various technologies. Diseases, most notably plague, also spread along the Silk Routes. In addition to economic trade, the Silk Road was a route for cultural trade among the civilizations along its network.
Today, we as a global society, benefit from Globalization not only in economic means, but in social, cultural, political, and environmental circumstances.
Without globalization, it would be very difficult for refugees to flee war-torn countries like modern day Syria and Yemen. Furthermore, we wouldn’t see as much cultural diversification as we do today without international trade. A large reason why people from all around the world are able to gather in large cities in developed nations is due to Globalization. Without international trade, we would lack the physical and capital requirements to grow large cities that are abundant with skyscrapers that employ thousands of people who deal with international relations etc. I could go on about this forever!
Basically, when we talk about Globalization, we aren’t just talking about the trade of goods and exchange of capital, we must realize the various social and cultural opportunities that have been realized with international trade.