15 characteristics of globalization

Globalization is the integration of economies and societies around the world. This process is mainly characterized by the formation of an international network that intertwines countries, companies and people.

Globalization is not a recent phenomenon. The first wave of globalization runs from 1870 to 1914, followed by a setback due to the world wars of the 20th century. The most recent wave of globalization begins around 1980 and extends to the present day.

Next, we present the characteristics of globalization.

1. It encompasses five dimensions

Globalization is a process that overlaps five dimensions, namely:

  • Economic dimension: companies and corporations from one country establish themselves in other countries, either by selling their products, opening subsidiaries or forming alliances with other companies. The most obvious example is that of fast food chains such as McDonald’s.

  • Political Dimension: through the formation of intergovernmental organizations such as the United Nations Organization or the European Community.

  • Social Dimension: the mobility of people between countries creates social relations, as well as intercommunication thanks to infrastructures and communication technologies, such as the Internet.

  • Cultural Dimension: Traditions, customs, information and ideas are displayed and shared in places other than where they originated. This can be seen in the diffusion of the original yoga of India, or the taste for sushi, typical of Japan.

  • Environmental Dimension: problems such as climate change, acid rain and the ozone hole are not restricted to a country or region, and must be tackled as a whole.

2. Transporting goods is cheaper

The most important feature of globalization is the fall in transportation costs. In the first wave of globalization this was made possible by the shift from shipping to steamships and railways. In the second wave of globalization, between 1945 and 1980, ocean freight rates decreased.

With container shipping and better airfares, the speed of freight transportation has also accelerated.

More recently, new technologies and information digitization allow it to be transmitted in virtual space at negligible cost.

Transportation costs are influenced by geography and the quality of infrastructure. Therefore, coastal areas and countries with good communication routes have better possibilities to industrialize and enter the global network.

3. Flow of people to development centers

The different waves of globalization stimulate the movement of people to the regions that generate greater economic prosperity. The reason is simple: the salary is higher in rich countries than in developing countries.

For example, between 1870 and 1914, millions of people migrated from the less developed regions of Europe to North America and other regions of the new world. In Asia, migration occurred from highly populated regions such as China and India, to Sri Lanka, Burma, Thailand, the Philippines and Vietman. This migration was characterized by unprepared labor.

The current wave of globalization is characterized by favoring the migration of educated workers, which is known as “brain drain”.

This flow of people in turn stimulates the flow of capital: migrants send large amounts of money to their families in the form of remittances. For example, India receives six times more money from abroad than from international aid.

4. Increased capital flow

This is nothing more than the movement of money in and out of a country. With globalization, the obstacles to investments from abroad have been reduced. This stimulates the entry of private financing in developing countries.

5. Rise of globalized countries

Among the distinctive features of recent globalization is the active participation of many more developing countries. Among these we can mention Argentina, China, Hungary, India, Malaysia, Mexico, the Philippines and Thailand.

This increased participation is due to more open trade and investment policies and political stability.

6. Material goods and services are negotiated

With the advancement in telecommunications and the Internet, countries export not only raw materials, such as iron, wood, and oil, but they can also export services of different types. Examples of this we have in the Call Center. For example, a person in the United States can call a customer service and be answered by a person in India.

7. Greater possibilities with a bigger market

Companies have at their disposal a greater number of consumers for their products. For example, “Made in China” products can be found practically anywhere in the world, not just in China. Japanese car companies can sell their cars on other continents.

8. Greater competition between companies

With a market the size of the planet, competition also increases. This stimulates creativity, innovation and product quality. Furthermore, increased competition also leads to a reduction in prices and the destruction of local monopolies.

9. Lower barriers to trade

To enter the web of economic globalization, countries have to eliminate or reduce restrictions on imports.

10. Poverty reduction

When developing countries integrate their economies into the global market, opportunities for better jobs open up for poor people. Some examples of poverty reduction thanks to globalization are the cases of China, India, Uganda and Vietnam.

In China, poverty in the rural sector was reduced by 85% from 1978 to 1999. In Vietnam, poverty was cut in half in a period of ten years.

11. Accelerated development of technologies

The countries that invest the most in other countries – the United States, the United Kingdom, Japan, Germany, Switzerland and the Netherlands – are also the ones that produce the most technology. Multinational corporations are a source of research and development and technology transfer.

12. Faster communication of ideas

Each wave of globalization is characterized by a faster transmission of information and ideas. From letters on horseback until the 19th century, it passed to mail services and telephone communications in the 20th century.

Today, the satellite network and digital interconnection make the Internet the most extensive communication network on the planet.

13. Greater international cooperation in favor of the environment

International integration is necessary when we talk about environmental problems. Global warming, pollution and the ozone layer are matters of interest to all peoples.

Environmental globalization involves international agreements to protect the environment. Among these we can mention the Kyoto protocol and the policies to eliminate chlorofluorocarbons, which cause the loss of ozone in the stratosphere.

14. Political globalization

Commercial interests between countries also shape their power relations. Countries that depend on others for the supply of raw materials are under their influence and can be affected by internal conflicts in these countries.

15. Cultural globalization

Globalization is also characterized by the exchange of cultures. People carry their customs with them in foods, behaviors and celebrations, which may or may not be welcome in the country where they arrive. In the same way, these people learn the new customs of the place that receives them.

This cultural globalization is also manifested through television, cinema, literature and social networks. American television series were in charge of showing the world traditions such as Thanksgiving and the Easter egg hunt, events that can be seen in other countries.

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