Globalization is the process in which people, ideas and goods spread throughout the world, spurring more interaction and integration between the world's cultures, governments and economies.
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The term is most frequently used in reference to creating an integrated global economy marked by free trade, the free flow of capital and corporate use of foreign labor markets to maximize returns. However, some use the term globalization more broadly, applying it to the movement of people, knowledge and technology across international borders; some also apply it to the free flow of cultural, environmental and political discourse.
History of globalization
Globalization as a term came to prominence in the 1980s. Although many consider this process a relatively new phenomenon, globalization has been happening for millennia. The Roman Empire, for example, spread its economic and governing systems through significant portions of the ancient world for centuries. Similarly, the trade routes of the Silk Road carried merchants, goods and travelers from China through Central Asia and the Middle East to Europe and represented another wave of globalization. European countries had significant investments overseas in the decades prior to World War I, prompting some economists to label the prewar period as an earlier golden age of globalization.
Globalization has ebbed and flowed throughout history, with periods of expansion, as well as retrenchment. The 21st century has witnessed both. Global stock markets plummeted after the Sept. 11, 2001, terrorist attacks in the United States, but rebounded in subsequent years.
Overall, however, the early 21st century has seen a dramatic increase in the pace of global integration, driven primarily by rapid advances in technology and telecommunications. In general, money, technology and materials flow more swiftly across national boundaries today than they ever have in the past. The flow of knowledge, ideas and cultures are flowing with increasing speed as well, enabled by the near instantaneousness of global internet communications.
Criticisms of globalization
Globalization has its proponents and its critics, today as well as in the past. And analyzing the impact of globalization is a complex proposition, as specific results of globalization are often seen as positives by proponents and negatives by critics.
For instance, some proponents say globalization creates new markets and wealth, and promotes greater cultural and social integration by eliminating barriers; on the other hand, some critics blame the elimination of barriers for undermining national policies and cultures and destabilizing advanced labor markets in favor of lower-cost wages elsewhere. Similarly, some proponents point to the rising economies of poor countries benefiting from companies moving operations there to minimize costs; some critics say such moves could lower living standards in developed countries by eliminating jobs.
Benefits and future of globalization
Experts generally acknowledge globalization brings both benefits and risks, which must be managed. More tightly integrated global economic markets, for instance, carry greater potentials for global recessions if countries are not able to work together to implement effective economic policies that reduce that risk.
Experts additionally acknowledge the future of globalization is unknown. They note the rapid pace of globalization in the early 21st century could be slowed or even reversed by potentially rising levels of protectionism happening in a number of countries.