10 Advantages and 6 Disadvantages of Globalization (Explained)

Advantages and Disadvantages of Globalization

Globalization is the global phenomenon that has increased the movements of goods, services, capital, technology, and ideas beyond the national boundaries and created interdependency. Being global phenomenon globalization provides various advantages as well as disadvantages globally to the nations, businesses, and people.

Some of the pros and cons of globalization are mentioned below:

Advantages of Globalization

Some advantages of globalization are:

Customer Supremacy

Customer supremacy means a situation where customers can easily get to use products of their choice at an affordable cost having quality also. Globalization has saturated the competition, products are flooded all over the market, and firms both domestic & foreign are forced to provide desired products and achieve customer satisfaction at any cost.

World Trade Growth

Obviously, globalization promotes trade growth. Here, globalization means liberalizing nations which means reducing barriers to international trade. Freeing the flow of people, capital, technology, and other resources.

Which led to the involvement of business in international trade – business. The increment has resulted in the growth of trade worldwide. It also leads to a competitive environment and increased quality of products yet increases productivity.

Quality Products and Services

As earlier explained globalization has resulted in a competitive environment, companies are forced to produce quality products otherwise their products will never be purchased as it has flooded markets with varieties of products.

The only option businesses have left is to achieve maximum customer satisfaction and profits through quality products and customer trust.

Foreign Direct Investment (FDI)

Globalization has increased the trend of foreign direct investments. Developed countries are increasingly active in investing in other countries, especially in developing countries.

FDIs provide economic gain to countries where such projects are established. Employment opportunities, the right exploitation of natural resources, and raised living standards are achieved.

International Cooperation

International cooperation is the means to build and maintain healthy relationships with various countries for the long term. Globalization promotes it – international trade, economic relationships, political idealization, etc. are means to achieve it.

Such cooperation further promotes the emergence of multinational companies such as Apple, Microsoft, and Pepsi – reducing barriers to international business and interdependence between counties.

Free Market Economy

Globalization has a very active role in promoting a free-market economy. It is the economy where exists no government interventions. Privatization is influenced. Governments have no stopping role in across borders flow of capital, goods, capital, and other resources rather they regulate and facilitate.

Employment Opportunities

With globalization, companies expand their business in developing countries. It further helps to generate employment opportunities in those countries.

In developing countries, there is often a lack of capital which is hindering economic growth and employment. Due to globalization, capital is gradually being shifted to the developing countries resulting in more job opportunities.

Standardization of Living

With globalization, the living standards of the public are also standardized. Quality products, access to technology, investments, and employment opportunities – all have an active role in improving people’s life.

In addition, the integration of economies, as a crucial process of globalization, enables countries to combat poverty and raise people’s living standards.

Economy Growth

Globalization has enabled the free flow of different technologies and other resources – there are significant tools to build a strong infrastructure for the nation.

Development of infrastructure means the overall development of the country. Further, it ensures optimum utilization of resources, exporting of sufficient products instead of making them waste, which all add up to a nation’s economy.

Contribution to World Economy

It is true that globalization is a global sensation. In a nutshell globalization ultimately also contribute to the world’s economy.

Disadvantages of Globalization

Along with too many advantages globalization also has disadvantages. They are mentioned below:

Increased Competition

On the one hand, competition has a positive effect as it provides quality products and services at lower costs. Where on another hand, it makes it very difficult to compete.

Due to globalization, the competition is not only local – it is international as such weak or low capital businesses are adversely affected.

Unequal Distribution of Profits

Assaying globalization is for all and benefits all countries. But the fact is developed countries’ multinational companies are dominating weak or developing countries.

They get maximum benefits from such countries by making investments there as there is low labor cost. They hire the local people and also some quality talents but the pay is the same i.e. very low. Quality talents are not getting fair payments.

Such foreign investments look like enhancing helping local countries but actually, they are looting people’s talents and natural resources.

Threat To Domestic Business

Due to globalization, international corporations have reached many corners of the world. In the case of developing and underdeveloped countries domestic yet small businesses are badly affected.

Even they reach their death due to not having sufficient capital, infrastructure, skilled labor, and resources to confront international products.

Threat to National Sovereignty

It is mostly seen in developing and underdeveloped countries case. Multinational corporations invest in such countries through FDIs. Such corporations have even capital equal to or more than such nations. They are very powerful – as such they might attempt to influence the country for their economic benefit.

Threat to Socio-Cultural Values

It is obvious that globalization globalizes national socio-cultural values at the international level. Due to which one nation’s cultures gain popularity in another and another nation’s next.

As it goes a nation’s norms and values are globalized but it is negatively affected when a nation’s people strongly follow another country’s socio-cultural values forgetting their own.

Environmental Concerns

Globalization assumes the countries are not scattered in terms of geographical environments rather the world has only one environment.

Businesses, people, and governments entering the global market must consider environmental issues. The issues such as carbon emissions, global air pollution, ozone layer depletion, etc. should be addressed and supportive actions should be taken – if not they may be punished or excluded from international activities.


Globalization has not only advantages but also disadvantages. The advantages and disadvantages are the facts that explain why globalization is a global phenomenon.

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