Consequences of globalisation

Some would argue that globalisation has spread wealth and led to the improvement of standards of living in newly-industrialised countries (NIC) such as India and China. Others claim that it is creating an unfair world where the rich countries exploit the world's poorest people and it has increased the development gap.

Positive consequences

  • Multinationals provide new jobs and skills.
  • Multinationals bring foreign currency to local economies when they buy local products and services.
  • The mixing of people and cultures from all over the world enables the sharing of ideas and lifestyles, creating vibrant cultural diversity.
  • People can take holidays in far off locations.
  • Consumers enjoy a greater choice of goods and services at cheaper prices.
  • Migration of people can fill labour and skill shortages.
  • It helps make people more aware of global issues, such as desertification and global warming, and able to work together to tackle these issues.
  • It enables governments to work together to tackle global issues or respond to events, such as a natural disaster.

Negative consequences

  • It operates mostly in the interests of the richest countries, who continue to dominate world trade.
  • Multinational companies may drive local companies out of business and are sometimes more powerful than the governments of the countries in which they invest.
  • It is a threat to the world's cultural diversity - threatening local traditions and languages and making the whole world more uniform to fit the western model.
  • Some nations feel that they are losing control over key decisions and sacrificing their sovereignty.
  • Migration of people across the world can cause social tensions and conflict of ideologies.
  • Industry may begin to thrive in NICs at the expense of jobs in manufacturing in high-income countries (HICs). The decline of traditional industries in HICs is known as deindustrialisation. Globalisation is one major factor in the process.