Question

Discuss the benefits and cost of globalization. I was thinking it increases economic productivity by lowering the price for the consumers due to the product being sourced everywhere. Benefit

It causes job insecurity because manufacturing jobs tend to get shipped to a different country to lower labor at a much cheaper price. Cost.

I need 2 more costs and 2 more benefits (can you help). I think the 2 above are 2 of them not sure. please explain your response.

Answer 1

The following are two benefits and two costs associated with globalization:

Benefits:

• Greater competition - Due to globalization, markets are opened up to new players and decreases the monopolistic nature of market with few local players. This provider's greater choice to consume and greater competition. Greater competition means companies have to improve service and product quality to retain the customers.
• Investment increases - With the openness of markets, countries are inclined to invest at a greater rate. This increases the GDP and boosts the economy.

Costs:

• Environmental costs - The increase in globalization has seen greater usage of non-renewable resources at a rapid rate. This has caused irreversible changes in the environment.
• Economic imbalances - The economic gap between the countries have grown and has caused economic imbalances. Some countries such as Singapore, Norway etc have trade surpluses and countries such as Brazil, South Africa etc. have huge trade deficits as a percentage of GDP. Further, with globalization, countries are more dependent on each other. For example - If one country is hit by a recession, it is likely that dependent countries will also face recession.