Advantages and Disadvantages of Globalization

Globalization is an international situation that has arisen in the late twentieth century in which the world’s investment, employment, production, and marketing systems have spread beyond the territorial boundaries to the international arena. As a result, the world has become a pervasive social and different countries are simultaneously participating in the process of uniform investment, employment, production, and marketing.

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Advantages and Disadvantages of Globalization

Globalization gives us many advantages and disadvantages. so let us make an in-depth study on the advantages and disadvantages of globalization.

9 Advantages of Globalization

As a result of globalization, we all enjoy many advantages. these are-

  1. Transfer of Technology
  2. Better Services
  3. Standardization of Living
  4. Development of Infrastructure
  5. Foreign Exchange Reserves
  6. Economic Growth
  7. Affordable Products
  8. Contribution to World GDP Growth Rate
  9. Extensions of Market

1. Transfer of Technology

Transfer of technology throughout the globe is good for us. Any country can borrow the technology through the agreement and can implement it in their country for their overall development. We can communicate each other easily from any part of the globe by using advance technology at minimal cost, time and efforts.

2. Better Services

Globalization always provides us better services. Through the technological advancement our services like water supply, mobile networking, internet, electricity supply and any other services have been easier and better than before. By the way, easy access to the internet throughout the globe is also the result of the globalization. 

3. Standardization of Living

The integration of economies as the key process of globalization enables countries to fight against poverty and improve the standard of living of the people.

Many researchers have been stated that when a country open up their trade to the globe, their rate of economic growth is faster and living standards tend to increase.

4. Development of Infrastructure

Due to the technological advancement and its transfer throughout the globe helps to improve country’s infrastructure. Countries are more enabling to deliver their services to the people. Development of infrastructure means overall development of respective countries. Here it is necessary to say that economic growth and development of infrastructure are compatible with each other.

5. Foreign Exchange Reserves

Through globalization countries can build foreign exchange reserves owing to international financial flows. 

6. Economic Growth

Globalization entails to optimum utilization of resources wherein deficit resources are procured and surplus resources are exported to other countries. This ensure overall economic growth.

7. Affordable Products

With the access to the latest technology, the countries can provide products to its countrymen at affordable prices. Globalization promotes competition in domestic economies and their endeavor to compete against competition, companies reduce product price or follow penetration pricing strategy. 

8. Contribution to World GDP Growth Rate

Globalization ensures contribution of every country to the world GDP growth.

9. Extensions of Market

Above all, Globalization promotes extension of market. It provides an opportunity to the domestic companies in going global. For instance, domestically, companies can witness saturation in the demand for their products or services but through globalization the domestic companies can sustain and satisfy the growing demands of foreign customers.

Disadvantages of Globalization

The globalization that just keeps doing well to us is not true. It impacts us in multidimensional way. So it has some disadvantages also. These ares-

  1. Growing Inequality
  2. Increasing of the Unemployment rate
  3. Trade Imbalance
  4. Environmental Loots

1. Growing Inequality

Globalization can increase inequality throughout the world by increasing specialization and trade. Although specialization and trade boost the per-capita income it may cause relative poverty.

To illustrate this we will take an example. All dominated MNCs in the world are located in the United States. All these companies are buying cheaper labor from developing or underdeveloped countries for their product manufacturing or assembling. China, India and Africa are prime examples of this. It increases the employment of such countries but they are lagging behind relatively developed countries.

Again those companies coming to these countries for cheap labor, they also deprive of that country’s i.e American people from work. So it appears that relative poverty is being created in developed countries as well.

2. Increasing of the Unemployment rate

Globalization can increase unemployment rate. Where people are getting jobs, how is it possible? Here is the explanation.

Globalization demands for higher-skilled work with cheaper price. But countries where Institutions are relatively weak are not capable of producing highly skilled workers. As a result, the unemployment rate is increasing in those countries.

When many foreign companies invest heavily in developing countries, they hire employee from that country. In some cases their salaries are very lower than the other developed countries. Moreover, the demand for these employees in developed countries is very low. Moreover, with the emergence of Global Economic Crisis, their jobs are at risk of losing.

3. Trade Imbalance

The balance of trade refers to the balance of values between a country’s export and import’s goods and services. As the result of globalization, any country can trade to any part of the globe.

That is why, in some cases developing countries are so much dependent on the developed countries in terms of import goods but their export capabilities are lower than import. The trade imbalance has been occurring.

So, trade imbalance refers to the imbalance of values between a country’s import and export’s goods and services. It is also called trade deficits. Trade imbalance may be increase in developed countries by their competitors.

4. Environmental Loots

The pace of industrialization is increasing as the result of globalization. Industrialization boosts the economic growth but it harms environment as well. Globalization loots from the nature and it harm us very badly.

Let’s try to understand with the example. Coca-Cola is the world’s leading soft drink company. This company consume huge amount of water for making soft drinks. In a state of northern India, Uttar Pradesh, a Coca-Cola bottle plant was closed by the government order because of too much usage of water claimed by local farmers.

In North India, the level of ground water is very low, but huge usage of this water for the interest of a MNC is very harmful to domestic farming.

In Kerala, a state of southern India, Coca-Cola plant was also closed due to the polluting the water which was supplied to the local communities.

Also, MNCs use the natural resources of different countries extensively for their personal gain.

Various chemical industries are very harmful to our health by polluting the soil, water, air.


From the above discussion on the Advantages and Disadvantages of Globalization, it can be said that the list of benefits of globalization can be easily lengthened. However, there are some disadvantages. According to critics, the process did not benefit the poor. The impact of globalization on environmental protection is not too great and Did not stabilize the global economy.

The policies formulated by the IMF, the World Bank, and the World Trade Organization only serve the interests of the developed world. Especially the internal interests of those countries. Developing countries have no place in it. The ideas of all these countries regarding globalization revolve around a particular economic and social scenario.

SAKHRI Mohamed
SAKHRI Mohamed

I hold a bachelor's degree in political science and international relations as well as a Master's degree in international security studies, alongside a passion for web development. During my studies, I gained a strong understanding of key political concepts, theories in international relations, security and strategic studies, as well as the tools and research methods used in these fields.

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