Wealthier nations, on the other hand, might outsource low-skill work to developing nations with a lower cost of living to reduce the cost of goods sold and pass those savings on to the customer.

Developing nations with a shortage of knowledge workers might, for example, “import” labor to kickstart industry. Access to labor: Globalization gives all nations access to a wider labor pool.There are several reasons why this might be the case, including: It’s widely believed that increased globalization leads to greater economic growth for all parties. “That is, national economies are ever more tightly connected with one another than ever before.”Ĭheck out the video below to learn more about globalization, and subscribe to our YouTube channel for more explainer content! View VideoĪdvantages of Globalization 1. “We live in an age of globalization,” Reinhardt says in Global Business. Globalization is defined as the increase in the flow of goods, services, capital, people, and ideas across international boundaries, according to the online course Global Business, taught by Harvard Business School Professor Forest Reinhardt. Here’s an overview of the pros and cons of globalization in business.įree E-Book: How to Be a Purpose-Driven, Global Business ProfessionalĪccess your free e-book today. Globalization has had numerous effects-both positive and negative-on business and society at large. The development of the internet and easier means of communication and collaboration propelled us from those early days of globalization to where we are today: A few taps or clicks away from a co-worker, business partner, customer, or friend. This was for a simple reason: It allowed us to travel greater distances faster than ever before. These distances increased further with the development of seafaring capabilities.Īlthough humans have been using ships for centuries to transport goods, cargo, people, and ideas around the world, it wasn’t until the development of the airplane that the blueprint of a “globalized economy” was laid. As humans domesticated the horse and other beasts of burden, the distances they could travel to trade increased. In its earliest days, trade happened between neighboring tribes and city-states. Throughout history, commerce and business have been limited by certain geographic constraints.

Ranking of global cities pros and cons